London open: Stocks rally as investors mull retail sales, house prices

London stocks rallied in early trade on Tuesday following solid gains on Wall Street and in Asia, as investors mulled the latest data on house prices and retail sales.

At 0840 BST, the FTSE 100 was up 1% at 8,293.97, having earlier risen above 8,300 for the first time.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "The FTSE 100 has scaled fresh heights as buds of May hope unfurl about interest rate cuts on the horizon. The blue-chip index smashed through the 8,300 mark in early trade as the feel-good factor around London-listed stocks continued."

Figures released by Halifax showed that average house prices rose 0.1% on the month in April following a 0.9% decline in March.

On the year, house prices increased 1.1% following a 0.4% jump the month before.

The data showed that a typical UK home now costs £288,949 compared to £288,781 in March.

Amanda Bryden, head of mortgages at Halifax, said the reality is that average house prices have largely plateaued in the early part of 2024.

"This reflects a housing market finding its feet in an era of higher interest rates. While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability. Activity and demand is improving, evidenced by greater numbers of mortgage applications so far this year, while at an industry level mortgage approvals have reached their highest point in 18 months," she said.

"Our recent research also found that buyers are adjusting their expectations, with first-time buyers in particular compensating for higher borrowing costs by targeting smaller properties. We see this reflected in property prices for the first few months of this year, with the value of flats rising most sharply, closing the ‘growth gap’ on bigger properties that’s existed for most of the last four years.

"However, we can’t overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals. Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts."

She said that if the Bank of England cuts rates later this year, as expected, fixed mortgage rates should fall. This, combined with the resilience displayed by the housing market over recent months, means Halifax now expects property prices to rise modestly over the course of this year.

Investors were also digesting industry data showing that total UK retail sales fell 4% year-on-year in April as wet spring weather deterred shoppers, despite businesses offering hefty discounts in an attempt to entice customers into stores.

The rain dampened sales growth for clothing and footwear, especially outdoor sportswear, as well as DIY and garden furniture, the BRC-KPMG retail sales monitor for the four weeks to April 27 showed. The early timing of the Easter break also had an impact, it added.

In equity markets, online supermarket Ocado was the standout gainer on the FTSE 100.

Shell gushed higher following a report it is in talks with Saudi Arabia's state-owned Saudi Aramco to sell its gas station business in Malaysia.

According to Reuters sources, a deal could be worth up to $1bn.

On the downside, BP was a little weaker after it reported a fall in first-quarter profit on the back of lower oil and gas prices, an outage at a US refinery and "significantly weaker" fuels margins. It also started a $1.75bn share buyback.

Underlying replacement cost profit for the quarter was $2.7bn, compared with $5bn a year earlier and $3bn for the final three months of 2023, BP said.

Market Movers

FTSE 100 (UKX) 8,293.97 0.98%
FTSE 250 (MCX) 20,320.16 0.77%
techMARK (TASX) 4,693.43 0.56%

FTSE 100 - Risers

Ocado Group (OCDO) 368.40p 3.60%
International Consolidated Airlines Group SA (CDI) (IAG) 184.20p 3.11%
Fresnillo (FRES) 565.50p 2.91%
JD Sports Fashion (JD.) 118.70p 2.59%
Rentokil Initial (RTO) 418.10p 2.55%
Marks & Spencer Group (MKS) 264.80p 2.52%
Flutter Entertainment (DI) (FLTR) 16,100.00p 2.52%
Barclays (BARC) 207.05p 2.32%
easyJet (EZJ) 554.00p 2.29%
Entain (ENT) 802.80p 2.22%

FTSE 100 - Fallers

Phoenix Group Holdings (PHNX) 508.00p -2.21%
Smith & Nephew (SN.) 986.80p -1.00%
Haleon (HLN) 328.30p -0.48%
BP (BP.) 508.00p -0.47%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%
Unilever (ULVR) 4,190.00p 0.05%
Rolls-Royce Holdings (RR.) 418.30p 0.05%
Melrose Industries (MRO) 604.00p 0.07%
AstraZeneca (AZN) 12,064.00p 0.12%
Bunzl (BNZL) 3,110.00p 0.13%

FTSE 250 - Risers

Diversified Energy Company (DEC) 1,115.00p 4.40%
Wizz Air Holdings (WIZZ) 2,318.00p 3.48%
Future (FUTR) 732.00p 3.46%
Ferrexpo (FXPO) 52.00p 3.38%
SDCL Energy Efficiency Income Trust (SEIT) 62.10p 3.33%
TUI AG Reg Shs (DI) (TUI) 585.00p 3.27%
UK Commercial Property Reit Limited (UKCM) 72.20p 3.14%
Domino's Pizza Group (DOM) 323.40p 3.06%
Hochschild Mining (HOC) 155.60p 2.91%
RHI Magnesita N.V. (DI) (RHIM) 3,655.00p 2.81%

FTSE 250 - Fallers

PZ Cussons (PZC) 103.00p -2.09%
Ashmore Group (ASHM) 188.50p -2.08%
PPHE Hotel Group Ltd (PPH) 1,460.00p -1.35%
Quilter (QLT) 109.70p -1.26%
Bakkavor Group (BAKK) 118.50p -1.25%
Foresight Solar Fund Limited (FSFL) 89.40p -1.22%
Genus (GNS) 1,846.00p -1.18%
Bank of Georgia Group (BGEO) 4,675.00p -1.06%
TBC Bank Group (TBCG) 2,970.00p -0.83%
NextEnergy Solar Fund Limited Red (NESF) 74.95p -0.73%