London open: Oil majors lead rise after US withdraws from Iran deal
London stocks rose in early trade on Wednesday as investors mulled over US President Trump's largely expected decision to pull out of the Iran nuclear deal and sifted through a raft of corporate news, with bakery chain Greggs bucking the trend on the back of a cautious outlook.
At 0840 BST, the FTSE 100 was up 0.4% to 7,599.20, while the pound was flat versus the euro at 1.1420 and 0.3% weaker against the dollar at 1.3512.
Trump said on Tuesday that the Iran nuclear agreement was a "horrible, one-sided deal that should never, ever have been made" and that rather than protecting the US and its allies, it placed "very weak limits on the regime's nuclear activity".
European powers, meanwhile, reiterated their commitment to the 2015 agreement, while Iranian President Hassan Rouhani said that for now, he considers the deal to be intact.
Oil prices gained on the back of the announcement, with West Texas Intermediate and Brent crude up 2.7% to $70.98 a barrel and $76.98, respectively.
CMC Markets analyst David Madden said: "The move will see the reintroduction of sanctions on Iran, and the various aspects of its economy, such as energy, insurance and finance could be targeted. Iran is one of the largest suppliers in OPEC, and traders are fearful the sanctions will weigh on global supply. The oil market has been in an upward trend for nearly eleven months, and given the Iranian development it is likely to continue."
There are no major UK data releases due, with the week's highlights - the Bank of England rate announcement and manufacturing and industrial production figures for March - out on Thursday.
In corporate news, Imperial Brands rallied as it said sales volumes continued to outperform the industry and doled out a 10% increase in its interim dividend of 56.87p, but posted a 7% drop in profits.
Vodafone gained ground as it agreed to acquire assets in Germany, the Czech Republic, Hungary and Romania from Virgin Media owner Liberty Global for an enterprise value of €18.4bn. Liberty could use the cash to make its much-rumoured bid for ITV, suggested analyst Neil Wilson at Markets.com, though a purchase of mobile network o2 "may be the number one option".
Challenger OneSavings Bank edged higher as it said the first-quarter loan book grew 5% and reiterated its guidance for the year, while pub chain JD Wetherspoon ticked up despite reporting a slowdown in sales growth in the 13 weeks to 19 April.
Recovering doorstep lender Provident Financial racked up healthy gains as it hailed a solid start to the year and said it was on track to deliver 2018 results in line with its plans, while engineer Renishaw surged after posting a 12% jump in revenue for the first three quarters of the year.
On the downside, luxury fashion brand Burberry was under the cosh after Groupe Bruxelles Lambert, the holding company of Belgian billionaire Albert Frere, sold a 6.6% stake in the group.
FTSE 250 bakery chain Greggs fell a whopping 18% as it struck a cautious note and said underlying profits for the year are likely to be at a similar level to the previous year, with trading in March and April hit by weaker market conditions.
Compass Group slumped even as it said profit rose 4.5% in the first half, driven by growth at the catering company’s North American business.
Security company G4S was in the red as it said first-quarter organic revenue fell 2%, but that it expects growth to accelerate in the second half of the year.
TUI was on the back foot despite posting a narrowing of its second-quarter loss and maintaining its full-year guidance while builders' merchant Grafton Group lost ground after saying it experienced a positive star to the year in January and February, but that March was weaker due to the bad weather.
Market Movers
FTSE 100 (UKX) 7,599.20 0.44%
FTSE 250 (MCX) 20,605.54 0.05%
techMARK (TASX) 3,469.39 0.00%
FTSE 100 - Risers
Imperial Brands (IMB) 2,710.00p 3.49%
Royal Dutch Shell 'B' (RDSB) 2,682.50p 1.88%
Royal Dutch Shell 'A' (RDSA) 2,598.00p 1.86%
BP (BP.) 560.48p 1.83%
BHP Billiton (BLT) 1,602.00p 1.60%
Kingfisher (KGF) 292.30p 1.56%
Micro Focus International (MCRO) 1,269.50p 1.32%
British American Tobacco (BATS) 3,856.00p 1.23%
Vodafone Group (VOD) 209.95p 1.16%
Ferguson (FERG) 5,676.00p 1.10%
FTSE 100 - Fallers
Burberry Group (BRBY) 1,747.50p -7.27%
Compass Group (CPG) 1,502.00p -5.15%
G4S (GFS) 253.30p -2.91%
International Consolidated Airlines Group SA (CDI) (IAG) 685.06p -2.16%
TUI AG Reg Shs (DI) (TUI) 1,716.50p -2.08%
National Grid (NG.) 830.10p -1.41%
easyJet (EZJ) 1,646.50p -1.11%
Carnival (CCL) 4,781.00p -0.95%
AstraZeneca (AZN) 5,194.00p -0.86%
Morrison (Wm) Supermarkets (MRW) 245.00p -0.85%
FTSE 250 - Risers
Provident Financial (PFG) 682.16p 6.26%
Renishaw (RSW) 5,030.00p 5.85%
Tullow Oil (TLW) 235.80p 4.66%
TI Fluid Systems (TIFS) 258.00p 3.20%
Hunting (HTG) 830.00p 2.79%
Cairn Energy (CNE) 236.80p 2.42%
Lancashire Holdings Limited (LRE) 615.00p 2.33%
Spire Healthcare Group (SPI) 228.80p 2.05%
QinetiQ Group (QQ.) 232.60p 1.75%
Wood Group (John) (WG.) 581.20p 1.68%
FTSE 250 - Fallers
Greggs (GRG) 1,035.00p -18.31%
Grafton Group Units (GFTU) 766.50p -4.13%
Inmarsat (ISAT) 381.60p -2.35%
Hikma Pharmaceuticals (HIK) 1,313.50p -1.87%
Indivior (INDV) 464.10p -1.61%
ZPG Plc (ZPG) 378.00p -1.56%
Merlin Entertainments (MERL) 370.10p -1.41%
Cobham (COB) 117.30p -1.22%
Jardine Lloyd Thompson Group (JLT) 1,284.00p -1.08%
SIG (SHI) 143.30p -0.97%