London open: Stocks rise amid hopes of end to US govt shutdown

London stocks shot higher in early trade on Monday amid hopes the longest US government shutdown in history could be coming to an end.

At 0830 GMT, the FTSE 100 was up 0.7% at 9,750.04.

Kathleen Brooks, research director at XTB, said: "Risk sentiment has been given a boost today, after news broke overnight that 8 Democrats had voted with Republicans to advance a procedural vote to bring the record-breaking 40 day government shutdown to an end.

"There are still more hoops to jump through before the 1.4 million federal workers get their jobs back, but this first step towards ending the lockdown has received a warm reception from financial markets.

"Stocks are higher across Asia, and futures markets are also higher, the Eurostoxx 50 index is set to open 1.4% higher later this morning, and futures also suggest that the S&P 500 could rise by 0.8% later today, which would go some way to erode last week’s losses.

"The gold price has surged higher by $70 per ounce and the price of oil is higher by approx. 1% this morning. The dollar index slumped, although it has picked up from its lows, as investors ditch safe havens like the dollar and government bonds."

Brooks noted that the deal that has been passed by the Senate but still needs to pass the House of Representatives and get signed off by the President.

"Added to this, the bill will only extend funding for the Federal Government until the end of January, so we could be back in this spot in a few months," she cautioned. "The issue is that most Democrats voted against this bill, and they may use a subsequent shutdown to push for funding for medical care. Thus, it is a win for the moderates today, but there could be another fight at the start of next year."

In equity markets, drinks giant Diageo surged as it named Haleon chair Dave Lewis as its next chief executive.

Lewis, the former chief executive of Tesco, will take up the role on 1 January 2026, replacing Debra Crew, who quit in the summer.

Richard Hunter, head of markets at Interactive Investor, said: "The announcement is clearly being seen as a potential inflection point for the group given the new hire’s proven ability in brand building, and where the shares have been under some considerable pressure of late, having fallen by 28% so far this year.

"The news may prompt investors to reconsider the strength of Diageo’s premier brand portfolio."

Precious metals miner Fresnillo and gold miners Hochschild and Endeavour all shone as gold prices advanced, while RHI Magnesita rocketed after a trading update.

IT services provider Kainos edged up as it raised its interim dividend and announced a new share buyback programme despite a double-digit decline in first-half profits due to increased investment and higher labour costs.

On the downside, global fund administration platform JTC slumped after saying it had agreed a £2.3bn takeover by private equity firm Permira, beating interest from rival Warburg Pincus.

JTC shareholders would receive £13.40p a share, below Friday’s closing price of £13.58. Shares in the company have surged from 897p on August 13 when Permira made its first offer.

Iron ore company Ferrexpo was weaker as it said the supply of power to its operations has been affected and production and exports will be interrupted following attacks on Ukrainian energy infrastructure early on Saturday.

Market Movers

FTSE 100 (UKX) 9,750.04 0.70%
FTSE 250 (MCX) 21,920.29 0.67%
techMARK (TASX) 5,485.28 0.39%

FTSE 100 - Risers

Diageo (DGE) 1,847.50p 7.01%
Fresnillo (FRES) 2,296.00p 4.74%
International Consolidated Airlines Group SA (CDI) (IAG) 381.50p 4.18%
Metlen Energy & Metals (MTLN) 42.67p 3.58%
Antofagasta (ANTO) 2,804.00p 2.97%
Burberry Group (BRBY) 1,178.00p 2.70%
Anglo American (AAL) 2,838.00p 2.64%
Scottish Mortgage Inv Trust (SMT) 1,105.50p 2.60%
Pershing Square Holdings Ltd NPV (PSH) 4,738.00p 2.55%
Entain (ENT) 749.60p 2.52%

FTSE 100 - Fallers

National Grid (NG.) 1,148.50p -1.88%
BT Group (BT.A) 176.70p -1.48%
Sainsbury (J) (SBRY) 344.20p -1.43%
Severn Trent (SVT) 2,783.00p -1.28%
SSE (SSE) 1,846.50p -1.18%
United Utilities Group (UU.) 1,200.50p -1.15%
Rightmove (RMV) 567.20p -1.12%
Tesco (TSCO) 469.40p -1.03%
Haleon (HLN) 357.50p -1.02%
Vodafone Group (VOD) 87.48p -1.00%

FTSE 250 - Risers

RHI Magnesita N.V. (DI) (RHIM) 2,360.00p 18.36%
Ceres Power Holdings (CWR) 379.80p 7.05%
Hochschild Mining (HOC) 349.60p 4.30%
Endeavour Mining (EDV) 3,128.00p 3.99%
Allianz Technology Trust (ATT) 527.00p 3.74%
Kier Group (KIE) 216.00p 3.60%
Polar Capital Technology Trust (PCT) 467.50p 3.43%
Tate & Lyle (TATE) 396.40p 2.96%
Carnival (CCL) 1,863.00p 2.96%
Ninety One (N91) 227.20p 2.81%

FTSE 250 - Fallers

JTC (JTC) 1,292.00p -4.86%
Pagegroup (PAGE) 230.60p -1.45%
Pinewood Technologies Group (PINE) 355.00p -1.39%
Derwent London (DLN) 1,747.00p -1.24%
Pennon Group (PNN) 509.00p -0.97%
Patria Private Equity Trust (PPET) 590.00p -0.84%
Lion Finance Group (BGEO) 7,525.00p -0.79%
Rank Group (RNK) 113.00p -0.70%
W.A.G Payment Solutions (EWG) 93.00p -0.64%
Pets at Home Group (PETS) 208.00p -0.57%