London open: Stocks nudge up ahead of US PCE

London stocks nudged up in early trade on Friday as investors mulled the latest UK house price and retail footfall data and eyed the release of US CPE figures.

At 0830 BST, the FTSE 100 was up 0.1% at 8,239.45.

Data released earlier by Nationwide showed that house prices returned to growth in May after two months of declines.

House prices were up 0.4% on the month following a drop of 0.4% in April and 0.2% in March. Economists had expected house prices to tick up 0.1% on the month.

On the year, prices rose 1.3% in May following a 0.6% jump in April and a 1.6% increase in March.

The average price of a home now stands at £264,249, up from £261,962.

Nationwide chief economist Robert Gardner said: "The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months."

Andrew Wishart, senior UK economist at Capital Economics, said that despite a small increase in the Nationwide house price index in May, the big picture is that the slight rise in mortgage rates since the start of the year has caused house prices to stagnate.

"Taking a step back, house prices have been flat for a year and a half, with the slight increase in May leaving them in line with their January 2023 level," he said.

"In the near term, house prices will stagnate at best. Delayed expectations of Bank Rate cuts in recent weeks will maintain the upward pressure on mortgage rates, while the RICS survey suggests that the supply of homes on the market is increasing, consistent with modest house price falls over the next few months.

"But if we are right to think inflation will fall below target by year end and that Bank Rate will be cut to 3.00% next year, the resulting drop in mortgage rates should give prices renewed impetus next year. Following a 2% increase this year, we expect house prices to increase by 5% in 2025."

Elsewhere, industry research showed that UK retail footfall eased in May despite the bank holiday weekends and improving weather.

According to the latest BRC-Sensormatic IQ footfall monitor, total footfall slipped 3.6% in May, although that was an improvement on April’s 7.2% slump.

All types of shopping destinations saw fewer visitors during the month. Footfall decreased by 2.7% on high streets, by 2.3% in retail parks and by 4.5% in shopping centres.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Bank holidays and improving weather failed to entice customers to make in person trips to shopping destinations.

"Retailers will be hopeful that a warm summer, coupled with events such as European Championships and Olympics, will boost footfall.

"Political parties have a role to play too, by having policies that mean retailers can invest in rejuvenating shopping destinations. A broken business rates system and outdate planning laws are holding back the industry."

Looking ahead to the rest of the day, attention will shift to UK mortgage approvals and consumer credit data at 0930 BST and the US PCE release for April at 1330 BST.

Axel Rudolph, senior market analyst at IG, said: "Friday's US PCE inflation print should help the Fed in its monetary policy decision making, especially after Thursday's Q1 GDP growth downward revision as corporate profits unexpectedly fall in Q1 while initial jobless claims rise slightly more than expected."

In equity markets, British Gas owner Centrica was the standout gainer on the FTSE 100 after an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets. National Grid also gained as Jefferies reiterated its ‘buy’ rating on the shares.

NatWest was just a touch firmer after the government sold a £1.24bn stake in the bank, as HM Treasury continues to reduce its shareholding in the state-backed lender.

JD Sports Fashion tumbled after it reported lower-than-expected annual profits as it continued to invest in its store estate. Profits before tax and adjusting items of £917.2m were down 7.5%, against forecasts of £920m. Organic sales were up 9%.

Associated British Foods was under the cosh after UBS said it had agreed to sell 10.3m shares in the Primark owner in a placing on behalf of its biggest shareholder, Howard Investments Limited.

Market Movers

FTSE 100 (UKX) 8,239.45 0.10%
FTSE 250 (MCX) 20,685.14 0.07%
techMARK (TASX) 4,795.94 -0.10%

FTSE 100 - Risers

Centrica (CNA) 144.85p 4.10%
National Grid (NG.) 860.60p 2.09%
Whitbread (WTB) 2,958.00p 1.68%
Antofagasta (ANTO) 2,222.00p 0.77%
GSK (GSK) 1,742.00p 0.69%
SSE (SSE) 1,727.50p 0.67%
British American Tobacco (BATS) 2,404.00p 0.63%
Vodafone Group (VOD) 75.22p 0.59%
BT Group (BT.A) 129.45p 0.50%
Aviva (AV.) 481.20p 0.44%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 125.35p -6.32%
Flutter Entertainment (DI) (FLTR) 14,485.00p -3.27%
Associated British Foods (ABF) 2,590.00p -2.63%
St James's Place (STJ) 497.60p -1.66%
Frasers Group (FRAS) 861.00p -1.60%
Entain (ENT) 658.00p -1.53%
Ocado Group (OCDO) 378.30p -1.36%
Sage Group (SGE) 1,005.00p -1.03%
Marks & Spencer Group (MKS) 301.20p -0.89%
Auto Trader Group (AUTO) 818.00p -0.85%

FTSE 250 - Risers

SThree (STEM) 457.50p 4.81%
Volution Group (FAN) 475.00p 4.40%
C&C Group (CDI) (CCR) 173.80p 2.48%
Balfour Beatty (BBY) 378.20p 2.44%
Wizz Air Holdings (WIZZ) 2,244.00p 2.19%
Spirent Communications (SPT) 187.30p 2.07%
OSB Group (OSB) 477.40p 2.01%
Diversified Energy Company (DEC) 1,186.00p 1.98%
Aston Martin Lagonda Global Holdings (AML) 141.20p 1.88%
Harbour Energy (HBR) 327.00p 1.68%

FTSE 250 - Fallers

Bridgepoint Group (Reg S) (BPT) 209.20p -4.12%
Discoverie Group (DSCV) 730.00p -2.28%
PureTech Health (PRTC) 227.50p -2.15%
Dr. Martens (DOCS) 82.30p -2.02%
Caledonia Investments (CLDN) 3,445.00p -1.71%
Mitchells & Butlers (MAB) 302.50p -1.63%
Moonpig Group (MOON) 157.40p -1.63%
Jupiter Fund Management (JUP) 83.00p -1.54%
JTC (JTC) 895.00p -1.54%
Asia Dragon Trust (DGN) 392.00p -1.51%