London midday: Stocks nudge up as investors mull Fed minutes

London stocks had nudged higher by midday on Thursday as investors digested the latest minutes from the US Federal Reserve.

The FTSE 100 was up 0.1% at 7,475.13, while sterling was 0.3% higher versus the dollar at 1.2095. Markets were set to remain fairly quiet as Wall Street will be closed for Thanksgiving.

Russ Mould, investment director at AJ Bell, said: "Stocks made gains on Wall Street as the latest minutes from the US Federal Reserve provided the reassuring message investors wanted to hear - the pace of rate increases is set to slow from here.

"While there’s no suggestion the Fed will stop hiking interest rates anytime soon, the messaging at least allows markets to start to look forward to that point."

On home shores, investors were mulling the latest manufacturing survey from the Confederation of British Industry. The total orders balance fell to -5 in November from -4 in October, but was above consensus expectations of -9.

CBI Deputy chief economist Anna Leach said: "The rise in manufacturing output this month appears to be at least partly driven by improvements to supply chains, with several companies reporting they were able to fulfil orders as materials and components became more readily available. Total order books remained much weaker than earlier in the year, however, and output is expected to fall again in the quarter ahead.

"Against a difficult economic backdrop, manufacturers welcomed aspects of last week’s Autumn Statement, notably business rates relief and commitments to R&D and infrastructure spending.

"But little was said about two of the most pressing issues that are currently holding the sector back: the future of the business energy support scheme and access to skills. This leaves big question marks hanging over the competitiveness of UK manufacturing."

In equity markets, property stocks got a boost after US real estate investment firm AEW said in its European annual outlook for 2023 that the UK was ranked most attractive out of 168 covered market segments for the second year in a row on a relative value basis over the next five years. It said UK stocks were less vulnerable to rate hikes than European peers.

Vodafone, Imperial Brands, National Grid, British Land and Diversified Energy all fell as they traded without entitlement to the dividend.

B&Q and Screwfix owner Kingfisher was also in the red as it narrowed its full-year profit guidance despite an improvement in third-quarter sales.

Iconic bootmaker Dr Martens tumbled as it warned of lower core profit margins after interim profit fell on weaker direct-to-consumer sales in the second quarter and the company said it would raise prices to offset inflation.

Russ Mould said: "The main reason the company has lost a bit of shine and polish is news that margins are under significant pressure.

"While external factors such as a stronger dollar are playing a part, the company is also suffering from weakening demand and there are at least hints that its pricing power isn’t what many might have hoped given the apparent strength of the brand.

"Growth in the lucrative direct-to-consumer sales channel is slipping and that matters because building out this part of the business is a key thread of the strategy.

"Hopes that a hefty increase in the dividend would keep the market sweet have proved forlorn, though one item which is hitting profitability, but which should earn Dr Martens a bit of credit, is the investment in the business.

"Taking a short-term hit to profit now to support growth in the future is what any business should be doing, and Dr Martens will hope this will help it put its best foot forward from here."

Market Movers

FTSE 100 (UKX) 7,475.13 0.13%
FTSE 250 (MCX) 19,575.52 0.38%
techMARK (TASX) 4,410.07 -0.11%

FTSE 100 - Risers

Intermediate Capital Group (ICP) 1,230.50p 2.37%
SEGRO (SGRO) 835.00p 2.33%
International Consolidated Airlines Group SA (CDI) (IAG) 134.76p 1.87%
Unite Group (UTG) 959.50p 1.86%
United Utilities Group (UU.) 1,070.50p 1.76%
Ocado Group (OCDO) 669.00p 1.73%
Admiral Group (ADM) 2,132.00p 1.67%
Melrose Industries (MRO) 134.65p 1.66%
NATWEST GROUP (NWG) 258.50p 1.65%
Associated British Foods (ABF) 1,585.00p 1.60%

FTSE 100 - Fallers

Imperial Brands (IMB) 2,107.00p -3.57%
Vodafone Group (VOD) 92.10p -2.70%
British Land Company (BLND) 407.70p -1.76%
National Grid (NG.) 1,015.00p -1.65%
Kingfisher (KGF) 250.00p -1.42%
AstraZeneca (AZN) 10,896.00p -0.91%
BAE Systems (BA.) 791.00p -0.88%
London Stock Exchange Group (LSEG) 8,164.00p -0.83%
Land Securities Group (LAND) 629.60p -0.82%
RS Group (RS1) 969.50p -0.62%

FTSE 250 - Risers

Home Reit (HOME) 65.10p 4.66%
Warehouse Reit (WHR) 115.60p 4.33%
Future (FUTR) 1,576.00p 3.68%
UK Commercial Property Reit Limited (UKCM) 62.40p 3.48%
Aston Martin Lagonda Global Holdings (AML) 135.80p 3.47%
easyJet (EZJ) 399.60p 3.36%
TUI AG Reg Shs (DI) (TUI) 145.70p 3.33%
Tritax Big Box Reit (BBOX) 153.00p 3.17%
Virgin Money UK (VMUK) 171.75p 3.06%
Synthomer (SYNT) 149.90p 3.02%

FTSE 250 - Fallers

Dr. Martens (DOCS) 218.20p -23.81%
Discoverie Group (DSCV) 830.00p -9.19%
Diversified Energy Company (DEC) 122.20p -3.55%
Indivior (INDV) 1,673.00p -2.45%
Kainos Group (KNOS) 1,699.00p -2.36%
ICG Enterprise Trust (ICGT) 1,130.00p -1.74%
3i Infrastructure (3IN) 323.00p -1.52%
Capricorn Energy (CNE) 245.80p -1.52%
Great Portland Estates (GPE) 523.00p -1.51%
Essentra (ESNT) 246.00p -1.40%