London open: Stocks gain as investors mull French election news, Nationwide data

London stocks rose in early trade on Monday as investors mulled the latest French election news and UK house price data.

At 0820 BST, the FTSE 100 was up 0.7% at 8,221.60. At the same time, French stocks surged, with the CAC 40 up 2.6%, while Germany’s DAX rose 1.2% and the benchmark Stoxx 600 index was 1.1% firmer.

Over the weekend, Marine Le Pen’s National Rally got 33% of the votes in the first round of parliamentary elections. The leftwing New Popular Front alliance was second with 28% of the votes, while President Macron’s centrist Together coalition got 20%.

Berenberg economist Holger Schmieding said: "A hung parliament remains the most likely outcome. Whereas RN might possibly still win an absolute majority of seats in the second round, this now looks even slightly less likely than it did before.

"The tail-risk scenario that the united left could take power and implement its costly agenda seems to have receded further."

On home shores, the latest data from Nationwide showed house price growth was broadly stable in June.

On the year, house prices rose 1.5% following 1.3% growth in May. On the month, meanwhile, prices were 0.2% higher in June, down from 0.4% growth a month earlier. The average price of a home stood at £266,604, versus 264,249 in May.

Nationwide chief economist Robert Gardner said prices were around 3% below the all-time high recorded in the summer of 2022.

"Housing market activity has been broadly flat over the last year, with the total number of transactions down by around 15% compared with 2019 levels," he said. "Transactions involving a mortgage are down even more (nearly 25%), reflecting the impact of higher borrowing costs. By contrast, the volume of cash transactions is actually around 5% above pre-pandemic levels."

Gardner continued: "While earnings growth has been much stronger than house price growth in recent years, this hasn’t been enough to offset the impact of higher mortgage rates, which are still well above the record lows prevailing in 2021 in the wake of the pandemic. For example, the interest rate on a five-year fixed rate mortgage for a borrower with a 25% deposit was 1.3% in late 2021, but in recent months this has been nearer to 4.7%.

"As a result, housing affordability is still stretched. Today, a borrower earning the average UK income buying a typical first-time buyer property with a 20% deposit would have a monthly mortgage payment equivalent to 37% of take-home pay - well above the long run average of 30%."

Still to come on the UK macro front, net lending, consumer credit and mortgage approvals figures for May, and the S&P Global CIPS manufacturing PMI for June are all due at 0930 BST.

In equity markets, British Gas owner Centrica was the standout performer on the FTSE 100 after an upgrade to ‘buy’ from ‘hold’ at Berenberg, on the expectation that the group will use £1bn of its cash to extend its share buyback programme.

Land Securities and British Land were higher after HSBC upgraded the shares to ‘buy’ and ‘hold’, respectively. Assura and Primary Health Properties also gained after an upgrade to ‘buy’ by the same outfit.

Croda International ticked a touch higher after saying it had appointed Johnson Matthey chief financial officer Stephen Oxley to the same role at the chemicals company.

On the downside, mining giant Anglo American slumped after saying it had been forced to suspend production at its Grosvenor steelmaking coal mine in Queensland after an underground coal gas ignition incident at the weekend.

No injuries were reported and all workers were evacuated safely. Grosvenor is expected to contribute 3.5m tonnes of steelmaking coal to Anglo’s 15-17m total in 2024 - though the company said it will update the market with guidance "once more information is available".

Market Movers

FTSE 100 (UKX) 8,221.60 0.70%
FTSE 250 (MCX) 20,404.90 0.59%
techMARK (TASX) 4,740.48 0.53%

FTSE 100 - Risers

Centrica (CNA) 139.35p 3.30%
Land Securities Group (LAND) 639.50p 3.23%
Rentokil Initial (RTO) 472.10p 2.36%
LondonMetric Property (LMP) 197.60p 2.17%
Barclays (BARC) 213.20p 2.06%
Standard Chartered (STAN) 730.60p 2.04%
International Consolidated Airlines Group SA (CDI) (IAG) 165.50p 2.00%
Entain (ENT) 642.60p 2.00%
Phoenix Group Holdings (PHNX) 531.00p 1.82%
Lloyds Banking Group (LLOY) 55.70p 1.75%

FTSE 100 - Fallers

Anglo American (AAL) 2,409.50p -3.70%
GSK (GSK) 1,521.50p -0.52%
Experian (EXPN) 3,678.00p -0.22%
AstraZeneca (AZN) 12,342.00p -0.11%
Halma (HLMA) 2,703.00p -0.11%
Darktrace (DARK) 576.20p -0.07%
Relx plc (REL) 3,638.00p -0.03%
Unilever (ULVR) 4,344.00p -0.02%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%
BAE Systems (BA.) 1,321.00p 0.08%

FTSE 250 - Risers

Target Healthcare Reit Ltd (THRL) 82.00p 4.46%
Pets at Home Group (PETS) 305.60p 3.45%
Primary Health Properties (PHP) 94.75p 3.27%
Serco Group (SRP) 184.70p 2.78%
Marshalls (MSLH) 300.50p 2.74%
Safestore Holdings (SAFE) 790.50p 2.73%
Domino's Pizza Group (DOM) 315.00p 2.67%
FirstGroup (FGP) 162.30p 2.53%
Grafton Group Ut (CDI) (GFTU) 950.80p 2.42%
Quilter (QLT) 123.00p 2.41%

FTSE 250 - Fallers

Auction Technology Group (ATG) 486.00p -2.99%
Hill and Smith (HILS) 1,912.00p -2.75%
Elementis (ELM) 143.00p -1.92%
Morgan Advanced Materials (MGAM) 304.00p -1.62%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 693.80p -1.31%
Monks Inv Trust (MNKS) 1,170.00p -1.02%
NextEnergy Solar Fund Limited Red (NESF) 80.50p -0.98%
Diversified Energy Company (DEC) 1,040.00p -0.95%
Trainline (TRN) 312.00p -0.76%
Witan Inv Trust (WTAN) 266.00p -0.75%