London midday: Stocks stay flat ahead of US PPI; housebuilders rally

London equity markets were still steady by midday on Thursday as a raft of stocks went ex-dividend, with all eyes on the release of the latest US inflation reading.

The FTSE 100 was flat at 7,770.25.

Richard Hunter, head of markets at Interactive Investor, said: "Given the mixed global lead, UK markets opened in unspectacular fashion, with investors searching for catalysts. One of the current themes for debate is the gulf between the US and the UK, not only in terms of market performance, but also the expected difference in timings to the first interest rate cut.

"Despite much weaker growth than the US, the UK seems likely to keep rates in a holding pattern until August, in an attempt finally to put the inflation genie back in the bottle."

He added: "Further clues on inflation will come later in the day with the release of the producer price index, a measure of wholesale inflation which is expected to have risen by 0.3% in February at the headline level and by 0.2% excluding the more volatile energy and food prices.

"The data could muddy the water if the reading comes in hotter than expected, given that the recent CPI print showed some signs of inflation remaining sticky in the final push towards the Federal Reserve’s target of 2%. In addition, readings on retail sales and the labour market will provide additional clues ahead of the Fed meeting next week, with no change to the interest rate expected, with the consensus currently anticipating the first cut in June."

The US producer price index for February is due at 1230 GMT.

On home shores, a survey out earlier showed the housing market continued to stabilise in February despite prices remaining under pressure.

According to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors, the net balance for house prices was -10 last month. A net balance is the proportion of respondents reporting a rise in prices minus those reporting a fall.

However, that was the least negative since October 2022, and a notable improvement on last year’s low of -67. Respondents were more optimistic looking forward as well, with a net balance of 36 expecting house prices to return to growth over the next year.

New buyer enquiries remained positive for the second month, unchanged at 6, while new instructions rose to 21, the strongest since October 2020.

Agreed sales, meanwhile, eased to -3 from 4 a month previously. However, RICS noted: "Although a little softer, both readings are indicative of a stronger trend in sales volumes than was evident through much of the past 12 months."

Sales activity was also expected to gain further momentum over the coming year, with a balance of 42.

Simon Rubinsohn, chief economist at RICS, said: "The February survey provides some grounds for encouragement around the sales market, with not just buyer interest staying positive but also the uplift in new instructions to agents.

"Whether the increase in stock coming back to the market will be sustained is likely to be a critical factor in explaining how things play out over the balance of the year, especially with new build likely to remain constrained."

In equity markets, online ticketing platform Trainline surged as it reported a strong jump in sales as fewer strikes in the UK and competition for passengers in Italy and Spain boosted revenues. Total group sales for the year to February 29 rose 22% to £5.3bn, with international ticketing up 14% to £1bn and the UK surging 23% to £3.5bn.

Vistry rallied as the housebuilder reported posted a jump in annual profits, unveiled another £100m share buyback and forecast higher completions in 2024 driven by strong demand. Other housebuilders followed suit, with Barratt Developments, Taylor Wimpey and Crest Nicholson also up.

Helios Towers rose as its full-year results were broadly in line with expectations and the company struck an upbeat note on its outlook.

On the downside, NatWest, Anglo American, Segro, Haleon, Lancashire, Entain, Dunelm and Abrdn all fell as they traded without entitlement to the dividend.

OSB Group tumbled as full-year profits beat expectations but guidance on net interest margin disappointed.

Market Movers

FTSE 100 (UKX) 7,770.25 -0.02%
FTSE 250 (MCX) 19,615.15 0.26%
techMARK (TASX) 4,525.62 0.15%

FTSE 100 - Risers

Burberry Group (BRBY) 1,289.00p 2.34%
Diageo (DGE) 2,965.00p 1.86%
Informa (INF) 820.20p 1.81%
Barratt Developments (BDEV) 481.90p 1.73%
Frasers Group (FRAS) 815.00p 1.68%
Rightmove (RMV) 569.60p 1.68%
Taylor Wimpey (TW.) 142.55p 1.68%
Smurfit Kappa Group (CDI) (SKG) 3,490.00p 1.63%
JD Sports Fashion (JD.) 114.85p 1.55%
SSE (SSE) 1,600.50p 1.49%

FTSE 100 - Fallers

Anglo American (AAL) 1,844.40p -4.78%
NATWEST GROUP (NWG) 242.20p -4.19%
SEGRO (SGRO) 863.20p -2.29%
Ocado Group (OCDO) 461.00p -2.27%
Entain (ENT) 760.20p -2.16%
Whitbread (WTB) 3,230.00p -2.00%
InterContinental Hotels Group (IHG) 8,088.00p -1.58%
International Consolidated Airlines Group SA (CDI) (IAG) 151.55p -1.56%
Intertek Group (ITRK) 4,960.00p -1.12%
Haleon (HLN) 327.40p -1.07%

FTSE 250 - Risers

Trainline (TRN) 367.20p 12.22%
Vistry Group (VTY) 1,202.00p 7.71%
Just Group (JUST) 104.80p 4.17%
Aston Martin Lagonda Global Holdings (AML) 175.40p 4.16%
IG Group Holdings (IGG) 732.50p 3.83%
Darktrace (DARK) 474.40p 3.51%
Genuit Group (GEN) 416.00p 2.97%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 663.40p 2.68%
Crest Nicholson Holdings (CRST) 227.80p 2.61%
Dr. Martens (DOCS) 92.45p 2.49%

FTSE 250 - Fallers

OSB Group (OSB) 386.20p -16.23%
Lancashire Holdings Limited (LRE) 611.00p -5.71%
Abrdn (ABDN) 140.80p -5.38%
Apax Global Alpha Limited (APAX) 147.60p -3.66%
Dunelm Group (DNLM) 1,101.00p -3.59%
Currys (CURY) 59.35p -2.78%
easyJet (EZJ) 524.40p -2.42%
Paragon Banking Group (PAG) 663.00p -1.70%
FDM Group (Holdings) (FDM) 399.00p -1.60%
Watches of Switzerland Group (WOSG) 383.00p -1.59%