London midday: FTSE nudges down amid data raft

London stocks had nudged into the red by midday on Friday as investors mulled a slew of UK data releases, with deal news in focus again.

The FTSE 100 was flat at 8,280.92.

Data released earlier by the Bank of England showed that mortgage approvals hit a two-year high in October as the housing market continued to regain ground.

According to the BofE’s latest Money and Credit report, net mortgage approvals for house purchase - a key indicator of future borrowing - rose to 68,303 in October, the highest level since August 2022.

The fourth consecutive monthly rise, it was also well above expectations. A Reuters poll of economists had forecast a fall to 64,500.

Net borrowing of mortgage debt by individuals, meanwhile, increased by £0.9bn to £3.4bn, also ahead of expectations.

The UK housing market was already battling surging inflation, high interest rates and the cost of living crisis when Liz Truss’s disastrous Budget in autumn 2022 caused mortgage rates to spike.

However, over the last two years economic conditions have improved and mortgage rates have fallen. The Monetary Policy Committee has also cut rates twice this year, to 4.75%.

The effective interest rate - the actual interest paid - on newly drawn mortgages decreased by 15 basis points in October, to 4.61%, the lowest since May 2023.

Matt Swannell, chief economic advisor to the EY Item Club, said: "First, quoted mortgage rates fell markedly between May and October. Second, forward-looking buyers will have been keen to set purchases in train before the temporary increase in stamp duty thresholds expires at the end of March.

"Market pricing has been volatile over the past couple of months. However, swap rates are higher than they were in late summer, and this will likely feed into slightly higher mortgages over the coming weeks."

The report coincided with provisional data from HM Revenue and Customs showing an estimated 100,410 residential property transactions in October, a 21% surge on the same month a year earlier and 10% improvement on September.

Nicky Stevenson, managing director at estate agent Fine & Country, said the rise signalled "strong momentum in the housing market" despite caution around last month's Budget.

"As we approach 2025, the property market is poised to remain steady with a cautious but optimistic outlook," she noted.

The BofE’s monthly Money and Credit report also showed net consumer credit borrowing by individuals eased slightly, to £1.1bn from £1.2bn a month previously.

While net borrowing on credit cards increased, it was offset by a fall in other forms of consumer credit, such as car dealership finance and personal loans.

Household deposits with banks and building societies, meanwhile, rose by £20.2bn, the largest increase since December 2020.

Industry data out earlier showed that retail footfall tumbled in November, hit by stormy weather, weak consumer confidence and tough comparatives.

In equity markets, broker notes were having an impact, with Anglo American the top gainer after an upgrade to ‘buy’ from ‘hold’ at Jefferies, which upped its price target to 2,850p from 2,500p.

IMI also rose after an upgrade to ‘buy’ at Bank of America Merrill Lynch.

Spire Healthcare surged to the top of the FTSE 250 as a report in the Economic Times suggested that India’s Narayana Health was in talks with the company’s shareholders about buying a controlling stake.

Citing people familiar with the matter, the Economic Times said Narayana plans to buy at least 51% of Spire via an open offer, but if Narayana manages to acquire around 75%, it may consider taking the company private.

Dan Coatsworth, investment analyst at AJ Bell, said: "Australia’s Ramsay Health tabled a £1 billion bid in 2021 but the target’s shareholders voted it down. Spire’s valuation has weakened considerably since mid-2023 and that looks to have put it on the radar of Indian private hospital group Narayana Health.

"Market chatter suggests Narayana is in talks to buy a controlling stake in Spire, sending shares in the UK stock up 8%. Spire has been a frustrating share to put it mildly, barely changing price since late 2021, which means investors might welcome the opportunity to sell out to Narayana if it’s paying a premium."

TI Fluid Systems was in the black after it agreed to be bought by Canadian automotive parts maker ABC Technologies for £1.03bn.

ABC, backed by private equity fund Apollo, said it would pay 200p a share in cash after having previous offers rejected. TI Fluid shares closed 5.7% higher at 189.2p on Thursday.

On the downside, defence firm BAE Systems slumped on the back of a downgrade to ‘underperform’ at Bank of America Merrill Lynch.

Bank of Georgia and TBC Bank both slumped after the government said it was suspending talks to join the European Union.

Market Movers

FTSE 100 (UKX) 8,277.06 -0.05%
FTSE 250 (MCX) 20,783.35 0.10%
techMARK (TASX) 4,692.06 -0.33%

FTSE 100 - Risers

Anglo American (AAL) 2,463.50p 3.03%
IMI (IMI) 1,810.00p 2.72%
Fresnillo (FRES) 648.50p 1.65%
Smith & Nephew (SN.) 996.20p 1.12%
Rolls-Royce Holdings (RR.) 551.60p 1.10%
WPP (WPP) 868.00p 0.88%
London Stock Exchange Group (LSEG) 11,270.00p 0.81%
Flutter Entertainment (DI) (FLTR) 21,680.00p 0.79%
Sainsbury (J) (SBRY) 263.20p 0.77%
B&M European Value Retail S.A. (DI) (BME) 344.90p 0.70%

FTSE 100 - Fallers

BAE Systems (BA.) 1,235.00p -4.26%
Intertek Group (ITRK) 4,700.00p -1.18%
Spirax Group (SPX) 7,080.00p -1.12%
Rentokil Initial (RTO) 392.90p -1.03%
Coca-Cola HBC AG (CDI) (CCH) 2,794.00p -0.99%
Ashtead Group (AHT) 6,258.00p -0.86%
United Utilities Group (UU.) 1,120.00p -0.84%
Prudential (PRU) 645.60p -0.80%
Experian (EXPN) 3,729.00p -0.77%
Severn Trent (SVT) 2,705.00p -0.77%

FTSE 250 - Risers

Spire Healthcare Group (SPI) 235.00p 7.06%
Direct Line Insurance Group (DLG) 231.60p 3.21%
Johnson Matthey (JMAT) 1,367.00p 2.78%
Premier Foods (PFD) 197.20p 2.71%
Future (FUTR) 901.50p 2.50%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,520.00p 2.23%
Dr. Martens (DOCS) 67.00p 2.06%
Hochschild Mining (HOC) 217.50p 1.87%
TI Fluid Systems (TIFS) 192.40p 1.69%
Telecom Plus (TEP) 1,812.00p 1.68%

FTSE 250 - Fallers

Bank of Georgia Group (BGEO) 4,700.00p -5.91%
TBC Bank Group (TBCG) 3,045.00p -5.43%
QinetiQ Group (QQ.) 410.20p -4.65%
Auction Technology Group (ATG) 516.00p -2.27%
Pennon Group (PNN) 603.50p -1.63%
XPS Pensions Group (XPS) 360.00p -1.37%
Travis Perkins (TPK) 767.00p -1.29%
W.A.G Payment Solutions (WPS) 83.00p -1.19%
Baillie Gifford US Growth Trust (USA) 269.00p -1.10%
Herald Investment Trust (HRI) 2,335.00p -1.06%