London midday: FTSE stays up as miners, housebuilders rally

London stocks were off earlier highs but still in the black midday on Monday, helped along by a strong showing from miners and housebuilders, as investors looked ahead to a busy week.

The FTSE 100 was up 0.2% at 7,492.80.

Data released earlier by China’s National Bureau of Statistics showed that headline consumer price inflation ticked up 0.1% in August from a year earlier following a 0.3% decline in July. Core inflation - which excludes food and fuel prices - was unchanged at 0.8%.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 was firmly on the front foot on Monday, with the miners doing the heavy lifting as consumer prices in China edged into positive territory.

"The reading, which emerged over the weekend, implies an improvement in the commodities demand picture and in turn provides a boost to the resources sector.

"US inflation numbers and the latest decision from the European Central Bank dominate the agenda over the remainder of the week, before the Bank of England and Federal Reserve take centre stage next week. This could be a defining period for stocks as we get some clarity on whether the rate hiking cycle is truly at or near its end or if there is more work to do in the battle against inflation.

"Until the market knows where the terminal interest rate lies and what the new normal is in terms of borrowing costs, we should probably steel ourselves for further volatility."

Investors were also eyeing UK unemployment figures due on Tuesday.

In equity markets, heavily-weighted miners were the standout gainers, with Anglo American, Antofagasta, Rio Tinto and Glencore all up. Metals prices were boosted by the Chinese inflation data and figures showing that China’s new bank loans rose more than expected in August.

Housebuilder Vistry surged after saying it plans to merge its housebuilding operations with its partnerships business by the end of the year as it set new medium-term earnings targets. The housebuilder said it was now aiming for return on capital employed of 40%, revenue growth of 5-8% a year and operating profit of £800m with an operating margin of at least 12%.

Vistry posted an 8.4% fall in adjusted half-year pre-tax profits to £174m amid a tough housing market where prices have been falling in response to higher mortgage costs.

Peers Taylor Wimpey, Barratt and Persimmon also gained.

In broker note action, Babcock was lifted by an initiation at ‘buy’ at Bank of America Merrill Lynch, but Melrose Industries was hit by a downgrade to ‘sector perform’ from ‘outperform’ by RBC Capital Markets.

Across the pond but definitely were mentioning, Tesla shares surged in pre-market trade after Morgan Stanley upgraded the electric car maker to ‘overweight’ from ‘equalweight’ and hiked the price target to $400 from $250. It argued that Tesla’s Dojo supercomputer could add up to $500bn to the enterprise value.

This will be expressed through a faster adoption rate in mobility (robotaxi) and network services (SaaS), said MS, which made Tesla its new "top pick".

Outside the FTSE 350, Restaurant Group rallied as it said it was finally exiting its loss-making leisure business by offloading 75 trading sites - which include Frankie & Benny’s and Chiquito - to the Big Table Group.

Market Movers

FTSE 100 (UKX) 7,492.80 0.20%
FTSE 250 (MCX) 18,529.19 0.36%
techMARK (TASX) 4,324.84 0.02%

FTSE 100 - Risers

Fresnillo (FRES) 581.80p 4.94%
Taylor Wimpey (TW.) 116.35p 2.87%
Barratt Developments (BDEV) 448.80p 2.87%
Persimmon (PSN) 1,047.00p 2.85%
Antofagasta (ANTO) 1,504.00p 2.56%
Rio Tinto (RIO) 4,950.00p 2.39%
Anglo American (AAL) 2,070.00p 2.32%
Glencore (GLEN) 435.60p 2.25%
M&G (MNG) 197.25p 1.89%
Legal & General Group (LGEN) 220.30p 1.71%

FTSE 100 - Fallers

Melrose Industries (MRO) 492.70p -3.54%
AstraZeneca (AZN) 10,636.00p -1.94%
Ocado Group (OCDO) 813.40p -1.62%
Ashtead Group (AHT) 5,122.00p -1.31%
Spirax-Sarco Engineering (SPX) 9,866.00p -1.18%
IMI (IMI) 1,476.00p -1.14%
Halma (HLMA) 2,153.00p -1.10%
Endeavour Mining (EDV) 1,537.00p -1.09%
Rightmove (RMV) 557.40p -0.96%
Rentokil Initial (RTO) 583.60p -0.92%

FTSE 250 - Risers

Vistry Group (VTY) 926.00p 15.75%
Babcock International Group (BAB) 401.00p 4.48%
Bridgepoint Group (Reg S) (BPT) 197.90p 3.61%
TUI AG Reg Shs (DI) (TUI) 479.00p 3.06%
Redrow (RDW) 483.00p 2.99%
Vanquis Banking Group 20 (VANQ) 120.40p 2.91%
IWG (IWG) 173.40p 2.48%
Hilton Food Group (HFG) 727.00p 2.39%
Crest Nicholson Holdings (CRST) 178.80p 2.35%
Bellway (BWY) 2,166.00p 2.07%

FTSE 250 - Fallers

Syncona Limited NPV (SYNC) 124.00p -3.12%
Wizz Air Holdings (WIZZ) 1,982.00p -3.03%
C&C Group (CDI) (CCR) 133.00p -2.78%
Direct Line Insurance Group (DLG) 176.55p -2.73%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 576.80p -2.37%
Octopus Renewables Infrastructure Trust (ORIT) 84.00p -2.33%
Baltic Classifieds Group (BCG) 194.40p -2.02%
Computacenter (CCC) 2,446.00p -1.61%
Hill and Smith (HILS) 1,708.00p -1.50%
Vietnam Enterprise Investments (DI) (VEIL) 614.00p -1.44%