London midday: Stocks little changed ahead of Fed; Vodafone in the red

London stocks were little changed by midday on Wednesday as caution set in ahead of rate announcements from the US Federal Reserve and the Bank of England, and after results from Microsoft and Alphabet failed to impress.

The FTSE 100 was up 0.1% at 7,670.70.

Jim Reid, head of global economics and thematic research at Deutsche Bank, said: "The main event over the last 24 hours occurred after the US closing bell as results from Microsoft and Alphabet last night soured risk sentiment.

"Both of the tech giants narrowly beat revenue and earnings estimates, but saw an underwhelming reaction in after-hours trading. Alphabet slid more than 5% amid lower-than-anticipated advertising revenues for Google. Microsoft declined by as much as 3% initially, arguably signalling some overextension of the recent strong rally, but largely reversed this decline after its outlook call later in the evening."

Investors were looking ahead to the Fed’s latest policy announcement, due after the close of European markets, with the BoE set to announce its decision on Thursday.

Russ Mould, investment director at AJ Bell, said: "Investors may be sitting on their hands as they await the latest decision from the Federal Reserve - a first interest rate cut hasn’t been pegged any earlier than March so all the focus will be on the messaging which accompanies the announcement. The Fed may encourage the recent scaling back of rate cut expectations and the extent to which it does could determine the path markets forge over the coming weeks."

On home shores, data out earlier from Nationwide showed house prices rose more than expected in January as mortgage rates trended lower.

House prices were up 0.7% on the month, having been flat in December and versus expectations for a 0.1% jump. The average price of a home now stands at £257,656.

On the year, prices were down just 0.2% in January following a 1.8% decline the month before. This marked the strongest outturn since January 2023.

Nationwide chief economist Robert Gardner said: "There have been some encouraging signs for potential buyers recently with mortgage rates continuing to trend down. This follows a shift in view amongst investors around the future path of Bank Rate, with investors becoming more optimistic that the Bank of England will lower rates in the years ahead.

"These shifts are important as this led to a decline in the longer-term interest rates (swap rates) that underpin mortgage pricing around the turn of the year. However, the partial reversal in recent weeks in response to stronger than expected inflation and activity data cautions that the interest rate outlook remains highly uncertain.

"While a rapid rebound in activity or house prices in 2024 appears unlikely, the outlook is looking a little more positive. The most recent RICS survey suggests the decline in new buyer enquiries has halted, while there are tentative signs of a pickup in the number of properties coming onto the market."

In equity markets, Vodafone fell after French telecoms firm Iliad said it had rejected a revised offer to merge the two companies’ Italian businesses. The revised offer would have given Vodafone €6.6bn in cash and a €2bn shareholder loan. Meanwhile, Iliad would have received €400m in cash and a €2bn loan.

Professional IT services provider FDM Group lost ground as it said it expects annual revenues to be flat, confirming the warning it issued in November about the hit from geopolitical uncertainties and clients deferring project decisions.

On the upside, Croda International rallied after better-than-expected results from US consumer care peer Ashland.

Chilean copper miner Antofagasta also gained as Citi reiterated its ‘buy’ rating on the stock and lifted its price target. "ANTO’s growth narrative, driven by volume recovery in next 6-12 months, is solidified by the approval of Centinela expansion, adding another 170kt copper production over the medium term at an attractive cost profile," the bank said.

GSK reversed earlier losses to trade up as it lifted its sales outlook for the next seven years.

Market Movers

FTSE 100 (UKX) 7,670.70 0.06%
FTSE 250 (MCX) 19,314.68 -0.18%
techMARK (TASX) 4,372.03 -0.11%

FTSE 100 - Risers

Croda International (CRDA) 4,808.00p 4.84%
Antofagasta (ANTO) 1,741.50p 2.08%
Admiral Group (ADM) 2,534.00p 1.36%
Pearson (PSON) 975.60p 1.22%
Flutter Entertainment (DI) (FLTR) 16,240.00p 1.06%
Reckitt Benckiser Group (RKT) 5,748.00p 1.05%
Beazley (BEZ) 544.50p 1.02%
Smiths Group (SMIN) 1,658.00p 0.97%
Aviva (AV.) 436.40p 0.97%
Haleon (HLN) 323.45p 0.89%

FTSE 100 - Fallers

Vodafone Group (VOD) 66.76p -2.89%
Marks & Spencer Group (MKS) 248.80p -2.32%
Smurfit Kappa Group (CDI) (SKG) 2,942.00p -2.19%
WPP (WPP) 780.80p -1.86%
Fresnillo (FRES) 530.40p -1.63%
International Consolidated Airlines Group SA (CDI) (IAG) 148.55p -1.36%
Scottish Mortgage Inv Trust (SMT) 774.00p -1.28%
Ocado Group (OCDO) 548.00p -1.23%
Airtel Africa (AAF) 112.90p -1.22%
Next (NXT) 8,548.00p -1.11%

FTSE 250 - Risers

Hill and Smith (HILS) 1,890.00p 2.16%
Virgin Money UK (VMUK) 158.35p 2.10%
NCC Group (NCC) 120.40p 1.86%
IG Group Holdings (IGG) 712.00p 1.71%
Vistry Group (VTY) 1,009.00p 1.71%
Sirius Real Estate Ltd. (SRE) 90.55p 1.51%
SThree (STEM) 403.50p 1.51%
OSB Group (OSB) 451.20p 1.44%
TBC Bank Group (TBCG) 2,900.00p 1.40%
Hiscox Limited (DI) (HSX) 1,029.00p 1.38%

FTSE 250 - Fallers

Harbour Energy (HBR) 280.20p -4.95%
Hochschild Mining (HOC) 100.50p -4.29%
Wood Group (John) (WG.) 159.60p -4.09%
Pets at Home Group (PETS) 283.40p -3.41%
Watches of Switzerland Group (WOSG) 358.60p -3.19%
Aston Martin Lagonda Global Holdings (AML) 186.70p -3.01%
Morgan Advanced Materials (MGAM) 274.00p -3.01%
Allianz Technology Trust (ATT) 317.00p -2.46%
Savills (SVS) 1,004.00p -2.33%
Wizz Air Holdings (WIZZ) 1,965.00p -2.04%