London midday: FTSE maintains gains after mortgage approvals, ahead of US PCE

London stocks were still firmer by midday on Thursday as investors digested a slew of UK earnings releases and the latest mortgage approvals figures, and looked to a key US inflation reading.

The FTSE 100 was up 0.3% at 7,644.94.

Russ Mould, investment director at AJ Bell, said: "A big release out later which investors will be watching closely is the core PCE reading of US inflation.

"This is the Federal Reserve’s preferred measure of prices. A higher-than-anticipated reading could put the final nail in the coffin of the idea of a pivot to rate cuts before the summer."

The PCE figures are due at 1330 GMT.

On home shores, data out earlier showed that mortgage approvals pushed up in January, hitting the highest level since the government's disastrous mini budget in 2022.

According to the Bank of England’s latest Money and Credit report, net mortgage approvals rose to 55,200 last month from December’s upwardly-revised 51,500.

That was above consensus expectations of 52,000, and the highest since October 2022.

Meanwhile, the effective interest rate - the actual interest paid - on newly-drawn mortgages fell by nine basis points to 5.19%.

The UK housing market was already grappling with record inflation, rising interest rates and the cost-of-living crisis when the government’s disastrous mini-budget of September 2022 sent mortgage rates soaring. However, in the last year rates have started to moderate, helping demand recover.

The BoE’s monthly report also showed that individuals repaid net £1.1bn of mortgage debt during the month, compared to £0.9bn in December.

Households’ total liquid assets, meanwhile, increased by £0.6bn last month. Total liquid assets include deposits with banks and building societies as well as cash in National Savings and Investments accounts.

Net borrowing of consumer credit by individuals rose to £1.9bn from £1.3bn, above both consensus expectations - for £1.5bn - and the average of the last six months of £1.6bn.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Households have started this year better than they ended in 2023, with reviving consumer credit flows supporting January’s rebound in retail sales.

"That said, consumers continue to manage their finances cautiously.

"The outlook for consumers, however, continues to brighten. The jump in the number of mortgage approvals for house purchase will lead to an increase in borrowing flows in two-to-three months, when those people move house.

"More broadly, we think households will be willing to spend more this year."

In equity markets, building materials group CRH rallied as it reported a jump in full-year earnings and revenue, supported by good underlying demand across its end-use markets.

Haleon jumped as the consumer health firm posted flat annual earnings but said it expected to grow revenue this year on higher demand.

Ocado also rose after saying it swung back to an underlying profit in 2023 as its joint venture with Marks & Spencer returned to profit.

Howden Joinery rose even as it said profits fell more than expected last year as a weaker DIY and housing market hit the bottom line.

Power generation firm Drax shot up as it posted a surge in full-year profits and lifted its dividend as Britons struggle to pay their energy bills.

Serco gained as the government contractor said it expected slightly lower revenues this year and a 5% rise in profit as 2023 earnings rose 25%.

Man Group was also in the black as it reported record assets under management even as annual profits fell on lower performance fees.

On the downside, Weir Group lost ground even as it delivered an 18% increase in adjusted profits in 2023 after beefing up margins more than expected as it pointed to further growth across the board this year.

British Airways and Iberia owner IAG flew lower despite saying it more than doubled annual profit as demand continued to rebound from the effects of the Covid pandemic.

Barclays, Diageo, Hargreaves Lansdown, Hays, Diversified Energy and Plus500 were all weaker as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,644.94 0.26%
FTSE 250 (MCX) 19,096.21 0.43%
techMARK (TASX) 4,382.50 0.68%

FTSE 100 - Risers

CRH (CDI) (CRH) 6,644.00p 7.16%
Haleon (HLN) 331.00p 5.43%
Rentokil Initial (RTO) 436.90p 2.63%
Standard Chartered (STAN) 663.60p 2.22%
Admiral Group (ADM) 2,656.00p 2.19%
Melrose Industries (MRO) 635.80p 2.09%
Croda International (CRDA) 4,692.00p 2.00%
NATWEST GROUP (NWG) 241.20p 1.99%
Sage Group (SGE) 1,240.00p 1.93%
Vodafone Group (VOD) 69.60p 1.92%

FTSE 100 - Fallers

Whitbread (WTB) 3,240.00p -6.39%
InterContinental Hotels Group (IHG) 8,284.00p -3.16%
Barclays (BARC) 164.04p -2.88%
Weir Group (WEIR) 1,834.00p -2.26%
Diageo (DGE) 2,937.00p -2.23%
Reckitt Benckiser Group (RKT) 4,999.00p -1.24%
London Stock Exchange Group (LSEG) 8,806.00p -1.19%
Smith & Nephew (SN.) 1,041.00p -0.72%
Associated British Foods (ABF) 2,268.00p -0.70%
Rolls-Royce Holdings (RR.) 368.00p -0.67%

FTSE 250 - Risers

Drax Group (DRX) 463.30p 10.60%
Howden Joinery Group (HWDN) 832.00p 7.69%
Serco Group (SRP) 191.30p 6.75%
Energean (ENOG) 1,037.00p 5.87%
Elementis (ELM) 141.60p 3.51%
Man Group (EMG) 248.20p 2.90%
W.A.G Payment Solutions (WPS) 73.00p 2.82%
FDM Group (Holdings) (FDM) 400.00p 2.17%
Ferrexpo (FXPO) 73.75p 2.15%
Abrdn (ABDN) 157.45p 2.14%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 174.30p -5.01%
Plus500 Ltd (DI) (PLUS) 1,721.00p -4.81%
Dr. Martens (DOCS) 92.30p -3.85%
Diversified Energy Company (DEC) 946.50p -3.81%
Spire Healthcare Group (SPI) 227.50p -3.81%
Hargreaves Lansdown (HL.) 733.00p -3.02%
Carnival (CCL) 1,100.50p -2.91%
Spectris (SXS) 3,510.00p -2.72%
North Atlantic Smaller Companies Inv Trust (NAS) 3,650.00p -2.67%
Tullow Oil (TLW) 28.46p -2.20%