London open: Stocks extend rally ahead of US inflation data

(Sharecast News) - UK stocks were inching higher on Monday morning, though risk appetite was capped by markets already trading at record highs ahead of some crucial inflation data from the US later in the week. The FTSE 100 was up just 0.11% at 8,443, after setting a fresh closing high of 8433.76 on Friday following six straight days of gains. The index has now risen 6% over the past month.

Dovish central bank expectations drove the FTSE 100 and European indices - including the Dax, Cac and Stoxx 600 - to record highs last week. However, cautious comments from Federal Reserve members about the near-term path for inflation have shown diverging approaches from central banks on either side of the Atlantic, with US policymakers keen to keep interest rates higher for longer.

US inflation figures released on Wednesday may give markets an indication about how the Fed will act in the coming months. Consensus forecasts point to a slowdown in price growth in April, with the core annual rate expected to ease to 3.6% from 3.8%.

"If that's the case, investors could breathe a sigh of relief and enjoy the dovish news from other central banks. We would then see the euro and sterling extend gains against the dollar, the yields ease and stock markets surf on a fresh wave of optimism," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"But if the numbers surprise to the upside for the fourth straight month, it will be hard to keep the Fed hawks contained."

Diploma jumps, Phoenix and Victrex fall

Specialist distribution business Diploma saw shares jump nearly 6% after lifting its annual guidance following a 17% rise in first-half adjusted earnings, boosted by acquisitions. It now expects constant currency revenue growth of around 16%, up 5 percentage points from previous guidance, made up of 6% organic revenue growth and 10% from acquisitions.

Savings and retirement group Phoenix was out of favour, dropping 2% after the announcement that its chief financial officer of four years is to step down later this year. The company did not give a reason for his departure.

High-performance polymers group Victrex fell 2% after underlying profits dropped by 34% in the first half following an 11% drop in volumes and 14% decline in group revenues.

An automated iron ore train operated by mining giant Rio Tinto has derailed after colliding with a set of stationary wagons in north-western Australia on Monday, causing shares in the company to slip 1%.

Market Movers

FTSE 100 (UKX) 8,442.93 0.11% FTSE 250 (MCX) 20,661.08 0.08% techMARK (TASX) 4,750.19 0.00%

FTSE 100 - Risers

Diploma (DPLM) 4,170.00p 6.87% B&M European Value Retail S.A. (DI) (BME) 553.20p 0.91% International Consolidated Airlines Group SA (CDI) (IAG) 182.85p 0.91% Whitbread (WTB) 3,095.00p 0.85% SEGRO (SGRO) 887.00p 0.77% M&G (MNG) 207.00p 0.73% Halma (HLMA) 2,344.00p 0.69% BT Group (BT.A) 106.10p 0.66% Unilever (ULVR) 4,316.00p 0.65% Smith & Nephew (SN.) 1,011.00p 0.65%

FTSE 100 - Fallers

BAE Systems (BA.) 1,364.00p -2.15% Phoenix Group Holdings (PHNX) 510.50p -1.92% CRH (CDI) (CRH) 6,658.00p -1.80% Rio Tinto (RIO) 5,540.00p -1.16% Ocado Group (OCDO) 345.70p -0.75% Persimmon (PSN) 1,414.00p -0.74% Barratt Developments (BDEV) 491.50p -0.45% Melrose Industries (MRO) 598.80p -0.40% Rolls-Royce Holdings (RR.) 422.20p -0.33% Convatec Group (CTEC) 261.20p -0.31%

FTSE 250 - Risers

International Distributions Services (IDS) 289.60p 3.35% Savills (SVS) 1,208.00p 2.55% Scottish American Inv Company (SAIN) 525.00p 2.34% Auction Technology Group (ATG) 493.00p 2.07% Wood Group (John) (WG.) 199.80p 2.04% Domino's Pizza Group (DOM) 341.40p 1.73% Oxford Instruments (OXIG) 2,465.00p 1.65% Apax Global Alpha Limited (APAX) 154.00p 1.58% Sirius Real Estate Ltd. (SRE) 99.65p 1.53% Supermarket Income Reit (SUPR) 74.60p 1.36%

FTSE 250 - Fallers

Tritax Eurobox (GBP) (EBOX) 58.00p -3.01% W.A.G Payment Solutions (WPS) 70.00p -2.51% TI Fluid Systems (TIFS) 136.60p -2.43% Victrex plc (VCT) 1,254.00p -2.34% Mitchells & Butlers (MAB) 250.50p -1.96% Kainos Group (KNOS) 1,010.00p -1.94% Elementis (ELM) 145.00p -1.89% Babcock International Group (BAB) 512.50p -1.73% TBC Bank Group (TBCG) 2,950.00p -1.67% Diversified Energy Company (DEC) 1,096.00p -1.62%