London open: Stocks rally on strong US cues; house prices pick up

London stocks rallied in early trade on Thursday following strong gains on Wall Street, particularly for the tech sector, and encouraging UK house price data.

At 0830 BST, the FTSE 100 was up 1.2% at 8,292.60.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "US markets bounced after the CPI inflation print all but secured the Fed’s first rate cut next week. CPI isn’t the Fed’s preferred inflation measure, but with a little bit of jigging, we can get a decent idea of what the preferred PCE number might look like, and it’s all starting to paint the same picture - inflation that’s behaving well. Markets are pricing in an 87% chance of a 0.25% cut, and there wasn’t much in this data to suggest a bolder move is needed.

"Tech was back leading the charge, with the S&P 500’s chip sector up 6.65%. Nvidia’s had a bumpy ride of late, but markets were encouraged by CEO Jensen Huang’s bullish conference commentary on demand."

On home shores, data released earlier showed that house prices sparked for the first time in nearly two years in August, boosted by declining mortgage rates and improving confidence in the market.

According to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors, the house prices net balance was 1, a significant improvement on July’s -18 and the first time prices have moved into positive territory since October 2022.

In addition, a balance of 14 respondents predicted prices would continue to rise over the next three months.

A balance is the proportion of respondents reporting a rise in prices minus those reporting a fall.

The number of people looking to buy homes also increased in August, the survey showed, with a balance of 15, compared to 4 in July. New property listings ticked up to 7 from 3.

RICS called it a "positive shift" in the UK housing market.

Simon Rubinsohn, RICS chief economist, said: "The latest survey captures an improvement in sentiment over the past month in the wake of the modest decline in mortgage rates."

However, he also sounded a note caution: "Anecdotal remarks from respondents still demonstrate the need for realistic pricing to get deals done, with uncertainty both around the scope for further interest rate cuts and the likely contents of the forthcoming Budget keeping the mood in check.

"Affordability remains an issue in the sales market, even with somewhat cheaper finance now available."

Later in the day, investors will turn their attention to the US producer price index for August. They will also be eyeing the latest policy announcement from the European Central Bank, due at 1315 BST. It’s widely expected to cut rates by 25 basis points.

In equity markets, Scottish Mortgage Investment - which has a heavy exposure to US tech - was the top gainer on the FTSE 100.

Trainline surged as it lifted its full-year profit outlook following a strong first half, which was ahead of its expectations.

NCC was also a high riser as the cyber security firm said trading in the fourth quarter was better than expected.

Kier Group gained as the construction firm posted a rise in full-year profit and revenue.

On the downside, M&G, Intertek and Endeavour were all in the red as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 8,292.60 1.20%
FTSE 250 (MCX) 20,731.36 0.95%
techMARK (TASX) 4,901.44 1.18%

FTSE 100 - Risers

Scottish Mortgage Inv Trust (SMT) 818.00p 2.97%
Antofagasta (ANTO) 1,735.50p 2.94%
Smurfit Westrock (DI) (SWR) 3,360.00p 2.69%
Intermediate Capital Group (ICG) 2,208.00p 2.60%
Diageo (DGE) 2,496.50p 2.57%
Glencore (GLEN) 372.00p 2.54%
Ashtead Group (AHT) 5,282.00p 2.32%
JD Sports Fashion (JD.) 143.00p 2.29%
easyJet (EZJ) 498.80p 2.26%
Sage Group (SGE) 1,019.00p 2.17%

FTSE 100 - Fallers

M&G (MNG) 203.50p -2.68%
Intertek Group (ITRK) 4,970.00p -0.20%
Hikma Pharmaceuticals (HIK) 1,931.00p -0.05%
British American Tobacco (BATS) 2,984.00p 0.00%
RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%
Severn Trent (SVT) 2,690.00p 0.00%
United Utilities Group (UU.) 1,060.50p 0.09%
Darktrace (DARK) 589.80p 0.14%
Unilever (ULVR) 4,982.00p 0.28%
Pearson (PSON) 1,047.00p 0.29%

FTSE 250 - Risers

Trainline (TRN) 326.20p 8.66%
NCC Group (NCC) 164.00p 8.18%
Mitie Group (MTO) 123.80p 3.86%
Kier Group (KIE) 155.80p 3.73%
Polar Capital Technology Trust (PCT) 2,890.00p 3.58%
Dr. Martens (DOCS) 65.50p 3.48%
Helios Towers (HTWS) 114.80p 3.42%
JPMorgan American Inv Trust (JAM) 974.00p 2.96%
Watches of Switzerland Group (WOSG) 379.00p 2.93%
Aston Martin Lagonda Global Holdings (AML) 154.60p 2.93%

FTSE 250 - Fallers

Rathbones Group (RAT) 1,708.00p -2.18%
Morgan Advanced Materials (MGAM) 280.00p -1.93%
International Public Partnerships Ltd. (INPP) 127.80p -1.69%
Endeavour Mining (EDV) 1,596.00p -1.24%
Tritax Big Box Reit (BBOX) 161.00p -1.17%
Petershill Partners (PHLL) 213.00p -1.16%
Edinburgh Worldwide Inv Trust (EWI) 141.60p -1.12%
Sequoia Economic Infrastructure Income Fund Limited (SEQI) 80.10p -0.87%
ICG Enterprise Trust (ICGT) 1,160.00p -0.85%
W.A.G Payment Solutions (WPS) 79.80p -0.75%