London midday: Stocks pare gains as estate agents slide ahead of Autumn Statement
Stocks in London were up but paring gains by midday as estate agents came under pressure ahead of the Treasury's Autumn Statement.
The FTSE 100 was up 0.2% to 6,834.86 and the pound was down 0.3% against the dollar at 1.2392.
Meanwhile, oil prices were trading just a touch higher after a choppy session on Tuesday, as investors continued to hope that next week’s OPEC meeting will yield an agreement to cut production.
West Texas Intermediate was up 0.2% to $48.14 a barrel and Brent crude was 03% firmer at $49.25.
IG’s Chris Beauchamp said: “(UK Finance Minister) Philip Hammond is not likely to announce any blockbuster measures this afternoon, with the chancellor keen to send a reassuring message to markets. As a result, we will just have to sit through an afternoon of tinkering around the edges of the UK economy.”
RBC Capital Markets said Hammond will be looking “to balance the competing forces of being business-friendly, displaying fiscal discipline and supporting lower income families”.
Possible incremental measures that have been discussed include a £1.3bn investment in the road network, a science and research & development spend increase of £2bn and a variety of measures to help ‘just about managing’ families such as softening cuts to welfare benefits and a fuel duty freeze.
There has also been talk of digital infrastructure spend of more than £1bn for fibre broadband/5G, increased pricing regulation on phone/utility costs, a cut to air passenger duty, and further help to UK housing and possible a change to the second home stamp duty regime.
In addition, market participants reckoned there could be hints of a further cut to UK corporation tax to 15% following Theresa May’s CBI presentation.
Estate agents were under the cosh ahead of the Autumn Statement after it was revealed that it would include a ban on letting agent fees.
Foxtons, Countrywide and LSL Property Services were all sharply lower as Hammond was expected to propose new rules that would prevent estate agents from charging fees to tenants, cutting off a chunk of revenues that has risen in recent years as administration charges have crept in for activities such as checking references and credit history, creating and ending contracts.
Elsewhere, United Utilities rose as it reported a small jump in underlying first-half profit and lifted its interim dividend.
Property investor Hammerson edged higher after agreeing to buy four outlet centres in Europe worth a combined €587m (£502m), in order to expand in the territory.
GlaxoSmithKline gained as it said its mepolizumab medicine met Phase 3 trial endpoints.
Thomas Cook surged. Although the travel company posted a drop in revenue and profit for the year to the end of September, underlying profit from operations came in ahead of expectations.
Softcat nudged up after saying it has seen a good start in the first quarter but that it expects operating profit for the year to be weighted towards the second half.
On the downside, CMC Markets was in the red as it reported a slump in revenue and profits for the first half.
Aside from the Autumn Statement at 1230 GMT, investors will eye the release of the minutes from the latest Federal Reserve meeting at 1900 GMT.