London midday: Stocks pare losses despite weak housebuilders

London stocks had pared losses by midday on Tuesday, with solid updates from the likes of Coca-Cola HBC and AB Foods helping to offset a gloomy statement from Persimmon, as investors turned their attention to the US mid-term elections.

The FTSE 100 was down just 0.1% at 7,294.36.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 started Tuesday on the back foot as the latest in a seemingly regular dose of political turmoil looms on the horizon in the form of US mid-term elections.

"The Republicans are widely expected to make sweeping gains and should they control both houses of Congress then Democratic president Joe Biden would essentially be in office but not in power given the divisive nature of politics across the pond.

"This could be a mixed blessing for markets as gridlock in Washington would at least prevent any legislation being introduced which could damage businesses."

On home shores, industry data out earlier showed that grocery inflation has soared to a fresh record of nearly 15%, adding hundreds of pounds to annual shopping bills.

According to Kantar, grocery price inflation in the four weeks to 30 October reached 14.7%, the highest rate since the retail consultancy started tracking prices in 2008.

In the 12 weeks to 30 October, inflation was 13.4%, with prices rising fastest in markets such as margarine, milk and dog food.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Consumers face a £682 jump in their annual grocery bill if they continue to buy the same items, and just over a quarter of all households - 27% - now say they’re struggling financially, double the proportion we recorded last November."

Separate research showed that retail sales growth slowed in October as the mounting cost-of-living crisis curbed spending.

According to the latest BRC-KPMG Retail Sales Monitor, total sales rose by 1.6% in October, compared to a rise of 2.2% in September. The figure was below both the three-month average of 1.7% and 12-month average of 2.7%.

In equity markets, housebuilders were the standout losers as Persimmon warned of fewer completions and a hit to margins from falling house prices amid the cost-of-living crisis. The company said cancellation rates had risen to 28% from 21% in the last six weeks after the government’s disastrous mini budget - which saw thousands of mortgage offers pulled from the market - and rising interest rates.

Persimmon slumped, along with Taylor Wimpey, Berkeley, Vistry and Bellway.

Hilton Foods slid as it warned that full-year profits would be below its expectations due to challenges in the UK seafood business and the wider macroeconomic environment.

Insurer Direct Line fell as it posted a decline in gross written premiums, pointing to a challenging market backdrop for the motor and home segments. Admiral also retreated.

On the upside, Associated British Foods gained after it reported a jump in full-year sales and profits despite surging input cost inflation, following a bumper performance at its budget fashion brand Primark.

Soft drinks bottler Coca-Cola HBC rallied after it raised full-year earnings guidance as it reported a boost to revenue from rising prices in the third quarter.

Elsewhere, Hammerson pushed higher after a well-received third-quarter trading update, while Babcock was boosted by an initiation at ‘buy’ by Berenberg.

Market Movers

FTSE 100 (UKX) 7,294.36 -0.08%
FTSE 250 (MCX) 18,559.75 0.00%
techMARK (TASX) 4,300.88 0.35%

FTSE 100 - Risers

Associated British Foods (ABF) 1,491.50p 4.41%
Coca-Cola HBC AG (CDI) (CCH) 1,998.50p 3.79%
B&M European Value Retail S.A. (DI) (BME) 365.60p 2.41%
Frasers Group (FRAS) 723.00p 2.41%
Lloyds Banking Group (LLOY) 42.81p 1.89%
Auto Trader Group (AUTO) 545.00p 1.76%
National Grid (NG.) 972.40p 1.74%
Barclays (BARC) 154.96p 1.55%
Vodafone Group (VOD) 106.26p 1.47%
Burberry Group (BRBY) 1,977.00p 1.44%

FTSE 100 - Fallers

Persimmon (PSN) 1,233.00p -6.80%
DCC (CDI) (DCC) 4,661.00p -5.72%
Admiral Group (ADM) 1,906.50p -3.93%
Taylor Wimpey (TW.) 94.88p -1.66%
Harbour Energy (HBR) 401.30p -1.45%
RS Group (RS1) 880.50p -1.40%
BP (BP.) 494.80p -1.39%
Shell (SHEL) 2,467.00p -1.36%
Glencore (GLEN) 524.90p -1.33%
Berkeley Group Holdings (The) (BKG) 3,534.00p -1.28%

FTSE 250 - Risers

Hammerson (HMSO) 23.24p 8.19%
Babcock International Group (BAB) 283.80p 3.58%
Dr. Martens (DOCS) 253.60p 3.51%
Helios Towers (HTWS) 117.60p 3.34%
Jupiter Fund Management (JUP) 114.00p 3.26%
Aston Martin Lagonda Global Holdings (AML) 138.20p 3.21%
easyJet (EZJ) 377.70p 3.14%
International Distributions Services (IDS) 222.90p 3.05%
Liontrust Asset Management (LIO) 976.00p 2.41%
Ferrexpo (FXPO) 117.30p 2.36%

FTSE 250 - Fallers

Hilton Food Group (HFG) 544.00p -14.20%
Vistry Group (VTY) 605.00p -2.58%
Lancashire Holdings Limited (LRE) 566.00p -2.41%
Direct Line Insurance Group (DLG) 194.70p -2.36%
Bellway (BWY) 1,915.00p -2.35%
Energean (ENOG) 1,535.00p -2.17%
Bank of Georgia Group (BGEO) 2,410.00p -2.03%
Network International Holdings (NETW) 329.80p -1.90%
Assura (AGR) 55.10p -1.87%
Tritax Eurobox (GBP) (EBOX) 59.60p -1.81%