London open: Markets rise after PBoC rate cut, but airline stocks fall

(Sharecast News) - UK stocks edged higher on Monday morning as markets reacted to a surprise interest-rate cut in China, while investors digested the latest political drama across the Pond. The FTSE 100 was up 0.5% at 8,197.09 after 30 minutes of trade.

The economic data calendar for Monday looked relatively light, with markets likely to focus on the surprise easing of monetary policy by the People's Bank of China. The central bank cut its one-year loan prime rate by 10 basis points to 3.35% and reduced its five-year loan prime rate by 10bp to 3.85%.

"This is the first rate cut for a year, and a rare move by the government to support the economy, after repeatedly refusing to add stimulus to the economy to boost growth," said Kathleen Brooks, research director at XTB.

Meanwhile, this weekend's exit of Joe Biden from the US presidential race has the potential to introduce market volatility, given that a Donald Trump victory had been widely predicted by market participants. Vice president Kamala Harris is now the frontrunner to replace Biden as the Democrat nominee, though it remains to be seen whether her standings in the polls will improve over the coming months.

"The early polls show that Harris is a favourite to become the new Democrat nominee, but that Donald Trump is still expected to win the November's presidential election. The Trump trade could lose some steam but will probably not get reversed if Harris doesn't make a material difference in the polls quickly," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Airline stocks drop

The travel and leisure sector was still reeling from this weekend's CrowdStrike IT outages which caused thousands of flight cancellations, with the US cyber company warning that a full recovery of its systems could take weeks. easyJet and IAG were nursing heavy losses early on.

Meanwhile, shares in Ryanair plummeted 11% in Dublin after the group posted a sharp fall in quarterly profits and warned fares would likely be "materially" lower than last summer.

Heading the other way was pest-control firm Rentokil on the back of M&A speculation, with former BT boss Philip Jansen rumoured to be circling the company.

Entain announced the appointment of Gavin Isaacs as its new chief executive officer, effective from 2 September, helping the stock 4% higher. The FTSE 100 gambling giant said Isaacs would bring more than 25 years of experience in the sports betting, gaming, and lottery industries, having held leadership roles in prominent companies like Scientific Games Corporation and DraftKings.

US grocery giant Kroger ordered two of Ocado's newest technology solutions for its existing and future customer fulfilment centres, causing shares in the UK-listed food fulfilment group to jump 6%.

Shopping centre owner Hammerson surged 7% after offloading its interest in Value Retail to consumer-focused investment firm L Catterton for an enterprise value of £1.5bn and announcing a £140m share buyback along with a one-for-10 share consolidation.

Market Movers

FTSE 100 (UKX) 8,197.09 0.51% FTSE 250 (MCX) 21,128.79 0.29% techMARK (TASX) 4,785.56 0.42%

FTSE 100 - Risers

Rentokil Initial (RTO) 502.40p 12.12% Entain (ENT) 669.60p 3.94% Convatec Group (CTEC) 253.60p 1.77% National Grid (NG.) 950.20p 1.67% Intertek Group (ITRK) 4,708.00p 1.51% Flutter Entertainment (DI) (FLTR) 15,590.00p 1.46% Experian (EXPN) 3,547.00p 1.43% CRH (CDI) (CRH) 6,200.00p 1.31% United Utilities Group (UU.) 1,026.50p 1.23% Centrica (CNA) 140.35p 1.23%

FTSE 100 - Fallers

easyJet (EZJ) 426.30p -7.12% International Consolidated Airlines Group SA (CDI) (IAG) 164.80p -3.06% Smith (DS) (SMDS) 444.80p -0.58% Whitbread (WTB) 2,881.00p -0.55% InterContinental Hotels Group (IHG) 8,180.00p -0.44% Fresnillo (FRES) 613.50p -0.41% Shell (SHEL) 2,782.50p -0.39% Smurfit Westrock (DI) (SWR) 3,581.00p -0.36% Auto Trader Group (AUTO) 799.40p -0.35% Next (NXT) 8,912.00p -0.31%

FTSE 250 - Risers

Hammerson (HMSO) 31.12p 7.16% Ocado Group (OCDO) 402.00p 6.32% Travis Perkins (TPK) 950.00p 3.37% Ashmore Group (ASHM) 175.00p 2.88% RHI Magnesita N.V. (DI) (RHIM) 3,710.00p 2.77% GCP Infrastructure Investments Ltd (GCP) 82.50p 2.48% Pennon Group (PNN) 669.50p 2.14% Twentyfour Income Fund Limited Ord Red (TFIF) 106.00p 2.12% Discoverie Group (DSCV) 750.00p 2.04% PureTech Health (PRTC) 169.40p 1.80%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 2,086.00p -7.54% Mony Group (MONY) 217.40p -4.48% Petershill Partners (PHLL) 204.00p -1.92% Elementis (ELM) 144.00p -1.91% AO World (AO.) 113.00p -1.74% Barr (A.G.) (BAG) 609.00p -1.62% Hochschild Mining (HOC) 180.00p -1.53% IntegraFin Holding (IHP) 367.00p -1.34% Hilton Food Group (HFG) 895.00p -1.32% NB Private Equity Partners Ltd. (NBPE) 1,670.00p -1.18%