London midday: Stocks maintain gains as investors eye ECB

London stocks were still firmly in the black by midday on Thursday, having taken their cue from strong gains on Wall Street, with encouraging UK house price data also helping to lift sentiment.

The FTSE 100 was up 0.8% at 8,259.36.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 bounced back sharply on Thursday following a strong session in Asia and Wall Street overnight, after US inflation fell to its lowest level in more than three years.

"This has left the way clear for interest rate cuts in the US. A 50 basis-point cut by the Fed seems to be off the table for now as recession fears have eased, meaning a quarter percentage point reduction seems the likely outcome.

"The markets will be watching producer price data from the US later on, given movements in so-called factory gate prices typically offer a window into the trajectory of prices consumers are likely to face.

"The European Central Bank (ECB) is widely expected to trim its rates by 25 basis points later today. The ECB is ahead of its counterparts in the UK and US having first moved to ease monetary policy in June.

"The FTSE 100 benefited from a rebound in energy prices, which lifted heavyweight constituents BP and Shell. Crude moved higher on supply risks associated with Hurricane Francine and its impact on operations in the US Gulf of Mexico."

On home shores, data released earlier showed that house prices sparked for the first time in nearly two years in August, boosted by declining mortgage rates and improving confidence in the market.

According to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors, the house prices net balance was 1, a significant improvement on July’s -18 and the first time prices have moved into positive territory since October 2022.

In addition, a balance of 14 respondents predicted prices would continue to rise over the next three months.

A balance is the proportion of respondents reporting a rise in prices minus those reporting a fall.

The number of people looking to buy homes also increased in August, the survey showed, with a balance of 15, compared to 4 in July. New property listings ticked up to 7 from 3.

RICS called it a "positive shift" in the UK housing market.

Simon Rubinsohn, RICS chief economist, said: "The latest survey captures an improvement in sentiment over the past month in the wake of the modest decline in mortgage rates."

However, he also sounded a note caution: "Anecdotal remarks from respondents still demonstrate the need for realistic pricing to get deals done, with uncertainty both around the scope for further interest rate cuts and the likely contents of the forthcoming Budget keeping the mood in check.

"Affordability remains an issue in the sales market, even with somewhat cheaper finance now available."

Investors were eyeing the latest European Central Bank policy announcement at 1315 BST, amid expectations of a 25 basis points rate cut.

In equity markets, heavily-weighted miners rallied as copper prices rose, with Anglo American, Glencore and Antofagasta the top performers.

Scottish Mortgage Investment - which has a heavy exposure to US tech - was also among the gainers on the FTSE 100.

Drinks giant Diageo was boosted by an upgrade to ‘buy’ at Bank of America Merrill Lynch.

NCC surged as the cyber security firm said trading in the fourth quarter was better than expected and lifted its outlook.

Trainline also rose sharply as it lifted its full-year profit outlook following a strong first half, which was ahead of its expectations.

On the downside, M&G, Intertek and Endeavour all fell as they traded without entitlement to the dividend.

Construction firm Kier Group reversed earlier gains to trade lower despite posting a rise in full-year profit and revenue.

Market Movers

FTSE 100 (UKX) 8,259.36 0.80%
FTSE 250 (MCX) 20,762.24 1.10%
techMARK (TASX) 4,889.93 0.95%

FTSE 100 - Risers

Anglo American (AAL) 2,076.00p 3.67%
Glencore (GLEN) 374.15p 3.13%
Antofagasta (ANTO) 1,736.50p 3.00%
Scottish Mortgage Inv Trust (SMT) 816.60p 2.79%
Smurfit Westrock (DI) (SWR) 3,362.00p 2.75%
Sage Group (SGE) 1,023.50p 2.62%
Rio Tinto (RIO) 4,750.50p 2.59%
Weir Group (WEIR) 2,032.00p 2.47%
Intermediate Capital Group (ICG) 2,204.00p 2.42%
JD Sports Fashion (JD.) 143.15p 2.40%

FTSE 100 - Fallers

M&G (MNG) 203.90p -2.49%
Rentokil Initial (RTO) 372.40p -2.03%
Haleon (HLN) 389.40p -1.17%
British American Tobacco (BATS) 2,957.00p -0.90%
AstraZeneca (AZN) 12,204.00p -0.84%
Marks & Spencer Group (MKS) 350.00p -0.48%
SSE (SSE) 1,978.00p -0.48%
Unilever (ULVR) 4,946.00p -0.44%
Hikma Pharmaceuticals (HIK) 1,926.00p -0.31%
Pearson (PSON) 1,041.00p -0.29%

FTSE 250 - Risers

NCC Group (NCC) 168.20p 10.95%
Trainline (TRN) 326.80p 8.86%
Polar Capital Technology Trust (PCT) 2,915.00p 4.48%
Allianz Technology Trust (ATT) 343.00p 3.63%
Aston Martin Lagonda Global Holdings (AML) 155.50p 3.53%
TI Fluid Systems (TIFS) 135.80p 3.51%
Ithaca Energy (ITH) 104.50p 3.47%
IP Group (IPO) 46.45p 3.34%
Close Brothers Group (CBG) 540.00p 3.25%
JPMorgan Global Growth & Income (JGGI) 554.00p 3.17%

FTSE 250 - Fallers

Kier Group (KIE) 142.20p -5.33%
Apax Global Alpha Limited (APAX) 141.60p -2.34%
GCP Infrastructure Investments Ltd (GCP) 77.00p -1.41%
Tate & Lyle (TATE) 667.00p -1.11%
Bakkavor Group (BAKK) 156.00p -0.95%
International Public Partnerships Ltd. (INPP) 129.20p -0.62%
Endeavour Mining (EDV) 1,607.00p -0.56%
Cranswick (CWK) 4,625.00p -0.54%
Foresight Solar Fund Limited (FSFL) 93.10p -0.53%
Spire Healthcare Group (SPI) 249.00p -0.40%