London close: Stocks gain as investors await Powell speech

London’s stock markets were buoyant at the close of trading on Thursday, influenced by Chinese inflation data, a substantial influx of corporate news, and a speech from the Fed chair later in the global day.

The FTSE 100 rose 0.73%, reaching 7,455.67 points, while the FTSE 250 saw an even more substantial increase of 1.07%, closing at 18,037.85.

In currency markets, sterling was last down 0.07% on the dollar, trading at $1.2276, while it dipped 0.05% against the euro to change hands at €1.1465.

“Federal Reserve chair [Jerome] Powell is taking the stage for the second consecutive day, following his remarks yesterday where he remained silent on the immediate monetary policy outlook,” said analysts at TickMill Group earlier.

“The market is eagerly anticipating his response to the significant drop in bond yields since last week’s Fed monetary policy update.

“Additionally, three other Fed officials are also scheduled to speak, adding to the potential insights into the central bank’s perspective on the current economic landscape.

“Investors will be closely watching for any hints or guidance regarding the Fed’s stance in light of recent developments.”

House prices under pressure as mortgage arrears build

In economic news, UK house prices continued to face downward pressure in October, according to a highly-watched survey.

The latest RICS UK residential market survey revealed an indicator of -63 for house prices, showing a modest improvement from September’s -67 and slightly better than the consensus expectation of -65.

That suggested a potential stabilising in the rate of decline.

The agreed sales balance also showed improvement, moving to -25 from September’s -35, while new instructions entering the market stood at -7.

Sales expectations for the coming months remained relatively unchanged at -20.

Respondents expressed greater optimism for the longer term, with the 12-month sales expectations indicator at 0.

“Plenty of caution remains evident with respect to both buyer and seller activity across the UK housing market, albeit the latest survey points to a slightly less negative picture than reported over the previous few months,” said Tarrant Parsons, senior economist at the Royal Institution of Chartered Surveyors.

“Mortgage affordability will remain stretched over the near-term, leaving little prospect of a strong rebound in residential sales volumes, even if expectations have moved away from cyclical lows.”

Elsewhere, figures from UK Finance showed an increase in the number of mortgages in arrears during the third quarter.

The total number of mortgages in arrears, defined as arrears reaching 2.5% of the outstanding balance, reached 99,470 between July and September, up from 90,880 in the second quarter.

That marked the highest level of mortgages in arrears since late 2016.

Homeowner mortgages accounted for 87,930, a 7% increase from the previous quarter.

Buy-to-let (BTL) mortgages in arrears saw a 29% surge, reaching 11,540.

UK Finance said the increases resulted from cost-of-living pressures and higher interest rates.

“In particular, interest rate pressures are felt more acutely in the BTL sector, where landlords may not be able to raise rents to cover the increases in their payments,” the trade association said.

The Bank of England’s chief economist Huw Pill meanwhile voiced support for maintaining current record-level interest rates earlier, emphasising the central bank’s commitment to addressing inflation.

Given the current “restrictive territory” of monetary policy, Pill said there was no need to raise rates to combat inflation.

He argued that keeping rates at their present restrictive level would continue to exert downward pressure on inflation, indicating a willingness to maintain the stance for an extended period.

Pill’s remarks echoed the sentiments expressed by BoE governor Andrew Bailey on Wednesday, who emphasised the premature nature of discussing rate cuts.

On the international front, China experienced a return to deflationary territory in October, mainly due to a significant decline in pork prices, according to the National Bureau of Statistics.

The consumer price index registered a 0.2% decline compared to the same month the previous year, surpassing expectations of a 0.1% decrease.

Notably, pork prices plummeted by 30.1%.

Additionally, the producer price index showed a decline of 2.6% year-on-year in October, following a 2.5% drop in September.

Core inflation, which excludes volatile components like food and fuel, fell to 0.6% from the previous 0.8%.

Mixed day for equities after tsunami of corporate news

On London’s equity markets, Auto Trader Group jumped 8.53% after it announced a 10% rise in first-half operating profit and a substantial 12% boost in revenue.

Auto Trader highlighted that the volume of buyers using its platform had reached “record” levels, underscoring its strong performance.

AstraZeneca gained 2.73% after it raised its full-year guidance for core earnings per share and total revenue, excluding Covid-related medicines.

Housebuilder Taylor Wimpey saw a 2.73% increase after acknowledging an uncertain market backdrop but expressing confidence in achieving full-year operating profit at the upper end of its guidance range, citing a strategic focus on optimising pricing and exercising stringent cost discipline.

National Grid and Lancashire Holdings both posted substantial gains following their respective results and trading statement releases, with National Grid’s stock price rising 1.1%, while Lancashire Holdings experienced an impressive 9.81% increase.

Consumer goods giant Unilever ticked 1.86% firmer after receiving an ‘overweight’ rating from Barclays, up from ‘equalweight.’

Additionally, the price target was raised to 4,600p from 4,300p, with the upgrade reflecting Barclays’ more optimistic outlook following Unilever CEO Hein Schumacher’s strategy update and targets.

On the downside, Flutter Entertainment tumbled 10.26% after saying it expected full-year group adjusted EBITDA, excluding the US, would likely land at the lower end of the projected range of £1.44bn to £1.6bn.

Discount retailer B&M European Value Retail experienced a 5.17% decrease in its share price despite raising profit and store opening guidance following a robust first half.

B&M achieved double-digit growth in both revenues and earnings.

HSBC Holdings and J Sainsbury encountered declines of 1.06% and 0.41%, respectively.

Wizz Air Holdings descended 9.55% after the low-cost airline cited a “difficult” environment to announce that full-year profits would likely be at the lower end of guidance.

Domino’s Pizza Group and Indivior also faced downward pressure on their stock prices after releasing updates, with Domino’s recording a 6.67% decline, while Indivior saw a more significant decrease of 10.59%.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,455.67 0.73%
FTSE 250 (MCX) 18,037.85 1.07%
techMARK (TASX) 4,099.65 0.31%

FTSE 100 - Risers

Auto Trader Group (AUTO) 689.20p 8.47%
Spirax-Sarco Engineering (SPX) 8,760.00p 3.99%
Rightmove (RMV) 487.70p 3.90%
RS Group (RS1) 717.60p 3.73%
Kingfisher (KGF) 227.30p 3.32%
Experian (EXPN) 2,708.00p 2.67%
Taylor Wimpey (TW.) 118.60p 2.64%
Mondi (MNDI) 1,386.50p 2.63%
AstraZeneca (AZN) 10,436.00p 2.62%
Diploma (DPLM) 3,026.00p 2.57%

FTSE 100 - Fallers

Flutter Entertainment (CDI) (FLTR) 12,300.00p -10.22%
B&M European Value Retail S.A. (DI) (BME) 521.20p -3.09%
Entain (ENT) 944.60p -1.40%
3i Group (III) 2,022.00p -0.93%
Anglo American (AAL) 2,076.00p -0.93%
Imperial Brands (IMB) 1,786.50p -0.81%
GSK (GSK) 1,415.40p -0.76%
HSBC Holdings (HSBA) 603.10p -0.69%
BP (BP.) 475.35p -0.38%
Airtel Africa (AAF) 114.70p -0.26%

FTSE 250 - Risers

CAB Payments Holdings (CABP) 66.90p 8.60%
Lancashire Holdings Limited (LRE) 656.50p 8.24%
Morgan Advanced Materials (MGAM) 247.50p 6.22%
Essentra (ESNT) 154.20p 5.76%
Spirent Communications (SPT) 104.00p 5.26%
WH Smith (SMWH) 1,249.00p 5.05%
Assura (AGR) 44.88p 4.57%
Bridgepoint Group (Reg S) (BPT) 198.50p 4.31%
IWG (IWG) 143.70p 4.29%
Harbour Energy (HBR) 231.40p 4.09%

FTSE 250 - Fallers

Indivior (INDV) 1,376.00p -10.59%
Wizz Air Holdings (WIZZ) 1,680.00p -9.82%
Domino's Pizza Group (DOM) 345.80p -6.94%
GCP Infrastructure Investments Ltd (GCP) 63.90p -3.47%
Hilton Food Group (HFG) 686.00p -2.83%
C&C Group (CDI) (CCR) 140.40p -2.36%
Balanced Commercial Property Trust Limited (BCPT) 64.50p -2.27%
Baltic Classifieds Group (BCG) 208.00p -1.89%
Darktrace (DARK) 352.60p -1.48%
Carnival (CCL) 913.00p -1.40%