London open: Stocks rise ahead of payrolls report

London stocks rose in early trade on Friday as investors mulled UK house price data and eyed the release of the latest non-farm payrolls report.

At 0820 BST, the FTSE 100 was up 0.3% at 7,475.27.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The FTSE 100 has a spring in its step as we end the week, buoyed by optimism that important jobs data from the US will support the current interest rate playbook.

"Fewer jobs are expected to have been added to the market in what is a crucial dataset for the Federal Reserve’s next interest rate decision. Since global policymakers are increasingly adopting a wait-and-see approach, it’s now time for the economy to prove things are moving in the right - cooler - direction. With this in mind, early indicators suggest the US markets are biding their time, with futures relatively flat."

The payrolls report, unemployment rate and average earnings are all due at 1330 BST.

On home shores, investors were be mulling the latest data from Halifax, which showed that house prices fell again in September as high borrowing costs continued to dent the market.

House prices declined by 4.7% on the year, following a 4.5% drop in August. On a month-on-month basis, house prices were down 0.4% in September following a 1.8% decline the month before.

The average price of a home now stands at £278,601, which is around the level seen in early 2022.

Kim Kinnaird, director of Halifax Mortgages, said: "Activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales. Borrowing costs are the primary factor, given the impact of higher interest rates on mortgage affordability. Against this backdrop, homeowners inevitably become more realistic about their target selling price, reflecting what has increasingly become a buyer’s market.

"However, with Base Rate now likely to be at or around its peak, we are seeing fixed rate mortgages deals ease back from recent highs. Wage growth also remains strong, which has helped with affordability, with the house price to income ratio now at its lowest level since June 2020 (6.2 in September versus 6.3 in August)."

Last month, the Bank of England stood pat on interest rates for the first time in nearly two years, at 5.25%.

Andrew Wishart, senior property economist at Capital Economics, said: "Looking ahead, the rise in long term-interest rates in financial markets has prevented the interest swap rates which fixed mortgage rates are based on from declining further.

"Therefore, we continue to think that mortgage rates will stay around their current high level until next summer. That will mean demand stays weak at the same time as the amount of homes up for sale is rising to more normal levels. The result will be further house price declines, of 5-6% on top of the 5% we have had already."

Elsewhere, industry research showed that retail footfall eased in September as the unseasonably warm weather put off shoppers.

According to the latest BRC-Sensormatic IQ Monitor, total UK footfall decreased by 2.9% year-on-year in the five weeks to 30 September, further adding to August’s 1.9% decline.

Within that, footfall on high streets fell by 1.7% and by 2.4% in retail parks. The heaviest fall was seen in shopping centres, where footfall was 4% lower year-on-year.

Helen Dickinson, chief executive of the British Retail Consortium, said: "During the warmer-than-expected weather, footfall slowed in September, with fewer shoppers across all locations.

"High streets and retail parks held up slightly better as the returns to school helped increase the number of shopping visits at the start of the month."

In equity markets, Aviva surged amid takeover speculation.

Pub chain JD Wetherspoon gained after saying it swung to a full-year profit as sales rose by over a tenth, though underlying growth has eased somewhat in the first quarter of the new financial year.

Shell was a little higher after the oil giant said its earnings from gas trading bounced back in the third quarter.

Market Movers

FTSE 100 (UKX) 7,475.27 0.32%
FTSE 250 (MCX) 17,666.04 0.38%
techMARK (TASX) 4,083.51 0.14%

FTSE 100 - Risers

Aviva (AV.) 411.50p 5.97%
Prudential (PRU) 873.40p 2.13%
Legal & General Group (LGEN) 214.70p 2.04%
Antofagasta (ANTO) 1,374.00p 1.40%
Ocado Group (OCDO) 570.60p 1.35%
Imperial Brands (IMB) 1,663.50p 1.31%
Rio Tinto (RIO) 5,022.00p 1.30%
Unite Group (UTG) 907.00p 1.28%
M&G (MNG) 193.90p 1.23%
Halma (HLMA) 1,961.50p 1.21%

FTSE 100 - Fallers

Coca-Cola HBC AG (CDI) (CCH) 2,150.00p -1.51%
Rentokil Initial (RTO) 594.40p -1.46%
Unilever (ULVR) 3,987.00p -1.08%
Haleon (HLN) 334.00p -0.67%
Diageo (DGE) 3,035.50p -0.65%
Pershing Square Holdings Ltd NPV (PSH) 2,934.00p -0.41%
Relx plc (REL) 2,842.00p -0.35%
International Consolidated Airlines Group SA (CDI) (IAG) 154.60p -0.32%
Associated British Foods (ABF) 1,984.00p -0.30%
Smith & Nephew (SN.) 962.40p -0.29%

FTSE 250 - Risers

Bridgepoint Group (Reg S) (BPT) 193.30p 4.71%
Man Group (EMG) 229.00p 4.28%
Moneysupermarket.com Group (MONY) 244.40p 3.12%
Bodycote (BOY) 623.50p 3.06%
Grafton Group Ut (CDI) (GFTU) 875.60p 3.01%
TP Icap Group (TCAP) 161.80p 2.80%
Close Brothers Group (CBG) 887.00p 2.42%
Allianz Technology Trust (ATT) 263.00p 2.33%
IntegraFin Holding (IHP) 231.60p 2.30%
Templeton Emerging Markets Inv Trust (TEM) 147.20p 2.22%

FTSE 250 - Fallers

Petershill Partners (PHLL) 140.40p -4.75%
Aston Martin Lagonda Global Holdings (AML) 237.00p -3.03%
Wizz Air Holdings (WIZZ) 1,869.00p -2.66%
Lancashire Holdings Limited (LRE) 563.00p -2.43%
888 Holdings (DI) (888) 89.50p -2.29%
JTC (JTC) 695.50p -2.11%
Trainline (TRN) 261.60p -2.10%
Essentra (ESNT) 164.40p -1.79%
Dr. Martens (DOCS) 134.00p -1.47%
Barr (A.G.) (BAG) 489.00p -1.21%