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London open: Stocks nudge up amid corporate deluge, ahead of rate announcements
London stocks nudged higher in early trade on Thursday as investors waded through a deluge of corporate news and looked ahead to the latest policy announcements from the Bank of England and the US Federal Reserve.
At 0850 GMT, the FTSE 100 was up just 0.1% at 8,175.41.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “With the implications of Trump’s huge win still being assessed for the global economy, the internationally focused FTSE 100 has opened up slightly.
“It gave up initial gains yesterday, so trading is still set to be cautious as investors ponder the implications of a possible clean sweep for the Republicans in the US elections. Mining stocks are on the front foot this morning, after nursing heavy losses, yesterday, helped by much better than expect export figures from China for October.
“All eyes will now turn to interest rate decisions from the Bank of England at noon today and the Federal Reserve Bank later in the day. Markets are broadly expecting a quarter-point cut from Threadneedle Street which would bring rates to 4.75%.
“Jerome Powell’s also expected to announce a quarter point cut which equates to a whole point cut since rates peaked. But perhaps of more importance will be comments about the future direction of travel with markets now expecting only two further cuts in 2025, due to the impact of a fresh Trump presidency with tariff hikes and tax cuts which are expected to be inflationary.”
Before that, investors were mulling the latest data from lender Halifax, which showed that house prices ticked up to a record high in October as mortgages became more affordable.
House prices rose 0.2% on the month following a 0.3% increase in September. On the year, prices were up 3.9% in October following a 4.6% increase the month before.
The average price of a home rose from £293,305 in September to £293,999. This was above the previous peak of £293,507 set in June 2022, towards the end of the pandemic-era “race for space”.
Amanda Bryden, head of mortgages at Halifax, said: “That house prices have reached these heights again in the current economic climate may come as a surprise to many, but perhaps more noteworthy is that they didn’t fall very far in the first place. Despite the headwind of higher interest rates, house prices have mostly levelled off over the past two and a half years, recording a 0.2% increase overall. That’s a significant slowdown compared to the 21% rise we saw in the equivalent period from January 2020 to the summer of 2022.
“Despite the affordability challenge, market activity has been improving. The number of new mortgages agreed recently reached its highest level in two years. This aligns with average mortgage rates dropping steadily since spring – now over 160 basis points lower than in summer 2023 – coupled with continued positive income growth.
“Looking ahead, borrowing constraints remain a challenge for many buyers. Following the budget, markets expect the Bank of England to cut rates more slowly than previously anticipated, which could keep mortgage costs higher for longer. New policies like higher stamp duty for second home buyers and a return to previous thresholds for first-time buyers might also affect demand.
“While we expect house prices to keep growing, it will likely be at a modest pace for the rest of this year and into next.”
In equity markets, engineer IMI rallied as it hailed a “resilient” third-quarter performance and reaffirmed its full-year adjusted earnings per share guidance.
Building materials group CRH gained as it said profit and revenue rose in the third quarter despite adverse weather.
RS Group was higher as it said its first-half performance was in line despite more challenging than expected markets.
Trainline also advanced as it lifted its full-year guidance.
Taylor Wimpey nudged up as it backed its full-year outlook, saying it saw steady signs of improvement in customer demand in the second half to date, as mortgage rates reduced and affordability improved.
On the downside, Auto Trader fell as it reported a solid increase in revenues and profits for the first half, but said the new car market remains challenging and gave a mixed outlook for used cars despite strong demand.
BT Group was under the cosh as it cut its full-year revenue guidance and said pre-tax profit fell 10% in the first half.
Rolls-Royce declined even as it reiterated its full-year guidance after a solid third-quarter performance, with demand remaining strong across civil aerospace, defence and power systems markets.
Hiscox was in the red even as the insurer reported a rise in written premiums for the first nine months of the year as it hailed solid retail growth.
Supermarket chain Sainsbury’s lost ground despite reporting increasing momentum in its second quarter and reiterating guidance for strong underlying profit growth this financial year, helped by improving grocery volumes and a stronger performance from Argos in the second half.
ITV was also on the back foot as the broadcaster reported a drop in revenue for the first nine months of the year as its Studios arm was hit by the US actors’ and writers’ strike.
Wood Group tanked as it said third-quarter adjusted EBITDA was lower than a year earlier and that its Projects business delivered a disappointing quarter, hit by delayed awards in the chemicals business and continued weakness in minerals and life sciences.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
South32 Limited | +4.18% | +7.90 | 196.90 |
| 2 |  |
Woodside Energy Group Ltd | +3.70% | +44.00 | 1,234.00 |
| 3 |  |
Glencore Plc | +2.94% | +11.80 | 413.05 |
| 4 |  |
Antofagasta Plc | +2.78% | +48.00 | 1,774.50 |
| 5 |  |
Rio Tinto Plc | +2.56% | +129.00 | 5,172.00 |
| 6 |  |
Bhp Group Limited | +2.47% | +53.00 | 2,199.00 |
| 7 |  |
Weir Group Plc | +2.44% | +52.00 | 2,184.00 |
| 8 |  |
Wise Plc | +2.44% | +19.50 | 819.50 |
| 9 |  |
Anglo American Plc | +2.42% | +58.00 | 2,450.00 |
| 10 |  |
Prudential Plc | +2.23% | +14.80 | 678.60 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bt Group Plc | -5.17% | -7.35 | 134.75 |
| 2 |  |
Auto Trader Group Plc | -5.12% | -43.20 | 800.20 |
| 3 |  |
Rolls-royce Holdings Plc | -4.32% | -24.80 | 549.20 |
| 4 |  |
Bp 8%pf | -4.28% | -6.50 | 145.50 |
| 5 |  |
Coca-cola Europacific Partners Plc | -3.85% | -240.00 | 6,000.00 |
| 6 |  |
International Consolidated Airlines Group S.a. | -3.70% | -8.20 | 213.60 |
| 7 |  |
Sainsbury (j) Plc | -2.46% | -6.60 | 261.20 |
| 8 |  |
Ck Infrastructure Holdings Limited | -1.91% | -10.50 | 540.00 |
| 9 |  |
Smith (ds) Plc | -0.87% | -5.00 | 571.50 |
| 10 |  |
Carnival Plc | -0.80% | -13.50 | 1,668.00 |
US close: Stocks sharply higher following Trump’s re-election victory
Wall Street stocks closed sharply higher on Wednesday after news outlets called the 2024 presidential election for Donald Trump.
At the close, the Dow Jones Industrial Average was up 3.57 % at 43,729.93, while the S&P 500 advanced 2.53% to 5,929.04 and the Nasdaq Composite saw out the session 2.95% firmer at 18,983.47.
The Dow closed a whopping 1,508.05 points higher on Wednesday, the blue chip’s biggest post-election rally in more than a century.
America headed to the polls on Tuesday in what was widely considered to be a deadlocked race between former president Trump and vice president Kamala Harris.
Early on Wednesday, Trump was projected to have defeated his Democratic rival after winning 292 Electoral College votes, including the key swing states of Pennsylvania, North Carolina and Georgia. The Republican Party was also projected to win back the Senate, while the race for the House of Representatives was still ongoing but the Republican Party was in the lead at the time of writing, leaving the potential for a “red sweep”.
Stocks linked to Trump traded higher, with shares in both Tesla, of which chief executive Elon Musk has been a vocal Trump supporter, and Trump Media & Technology trading firmly in the green, as did bank stocks.
Bitcoin also surged to an all-time high of $75,000 on the back of hopes for relaxed regulation on cryptocurrencies, while the benchmark 10-year Treasury yield surged to 4.437% due to speculation that Trump’s proposed tax cuts and other spending plans would spark economic growth but also widen the fiscal deficit and further accelerate inflation.
On the macro front, mortgage applications sunk 10.8% week-on-week in the seven days ended 1 November, according to the Mortgage Bankers Association, a sixth consecutive decline following a 0.1% drop in the prior week. Applications plunged 35% across October as a whole due to a 67 basis point monthly rise in benchmark interest rates.
In the corporate space, embattled drugstore retailer CVS Heatlh posted mixed Q3 results as increased medical expenses weighed on the company’s bottom line.
Thursday newspaper round-up: Scams, second-hand car sales, AstraZeneca
Companies could face fines of up to $50m for failing to prevent scams and may be forced to compensate victims under new laws the Albanese government says would give Australians the strongest anti-scammer protection in the world. The government will introduce legislation to federal parliament on Thursday to establish its long-awaited “scams prevention framework”. – Guardian
About 1,000 London buildings including the Houses of Parliament and the National Gallery could soon be warmed by low-carbon heat sourced from the River Thames, London Underground and sewer networks. Plans to develop the UK’s biggest heat network to supply decarbonised heat to buildings across Westminster were set out on Wednesday by the government as part of its pledge to back seven heat network zones with more than £5m of public funding. – Guardian
Second-hand car sales are climbing as cash-strapped consumers shun the new vehicle market. The number of used car transactions rose by 4.3pc from July to September compared to a year ago to reach 1.96m, according to the Society of Motor Manufacturers and Traders (SMMT). Of these, a record 53,423 were electric vehicles (EVs) – an increase of 57pc, or about 19,000. – Telegraph
Rachel Reeves has played down concerns around Donald Trump’s expected wave of tariffs, as she vowed to strengthen Britain’s trade links with the US. In comments made shortly after Mr Trump declared victory in the election, the Chancellor said she would fight to maintain “free and open trade” with America. In a signal that the Government is seeking ways to work with Mr Trump’s tariff-driven economic agenda, Ms Reeves said she recognises how important it is to care about “where things are made, who makes them and who owns them”. – Telegraph
The head of AstraZeneca’s international business has been arrested in China and separately about 100 former employees have been sentenced for alleged insurance fraud in the FTSE 100 company’s second-biggest market. Britain’s biggest pharmaceuticals company released the information on Wednesday as it tried to calm investor fears after Chinese media reports of widening investigations by authorities triggered a renewed sell-off of its shares on the London Stock Exchange. – The Times
The government will force a Chinese tech company to sell its majority stake in a British chipmaker a year after The Times revealed that microchips it had sold to Russia were found in a tank destroyed in Ukraine. The Cabinet Office issued a “final order” yesterday under the National Security and Investment Act mandating that the Chinese state-owned holding company that acquired an 80.2 per cent stake in FTDI must sell it within a “specified period”. – The Times
