London open: Stocks rise as investors mull house price data

London stocks rose in early trade on Tuesday, taking their cue from positive US and Asian sessions, as investors mulled over the latest UK house price data.

At 0845 GMT, the FTSE 100 was up 0.9% at 7,296.92.

Victoria Scholar, head of investment at Interactive Investor, said: "After a strong session to kick off the week with the FTSE 100 rallying more than 1.5%, the UK index is enjoying gains once again alongside the other major European bourses as some of the Omicron jitters begin to taper at least for now.

"Positive momentum from the US and Asia has carried forward into the European session with the Stoxx 600 opening up by nearly 1% driven by basic resources and travel & leisure. The FTSE 100 is inching closer to the next major resistance hurdle at 7,300 with a break above potentially paving the way for further gains."

Market participants were digesting the latest survey from Halifax, which showed that house price growth has hit a 15-year high, fuelled by strong demand and a shortage of properties.

The Halifax house price index showed that the value of an average property increased 1% in November, or by £2,808, to £272,992. Consensus had been for an increase of 0.6%. November is now the fifth consecutive month that house prices have risen.

The annual rate of inflation is now 8.2%, while on a rolling quarterly basis, the uptick was 3.4%, the strongest gain since the end of 2006.

The UK housing market was shuttered during the first pandemic but since then has boomed, boosted by record low interest rates, a surge in demand for different property types, a shortage of properties coming to market, and the stamp duty holiday. Halifax said that since March 2020, house prices have risen by £33,816 or £1,691 per month.

Some analysts had expected inflation to ease after stamp duty reverted to its traditional threshold at the end of September.

But Russell Galley, managing director at Halifax, said: "The market continues to be underpinned by a shortage of available properties, a strong labour market and keen competition among mortgage providers keeping rates close to historic lows.

"Those taking their fest step onto the property ladder are also playing an important role in driving activity, with annual house price inflation for first-time buyers at 9.1% compared to 8.8% for home movers."

Looking ahead, however, and Galley conceded that the pace of growth was unlikely to continue next year.

"There is now greater uncertainty than has been the case for quite some time, with interest rates expected to rise to guard against further increases in inflation,” he said. “Economic confidence may be also dented by the emergence of the new Omicron variant, though it remains far too early to speculate on any long-term impact.”

In equity markets, miners were among the top performers as copper prices rose, with Anglo American, Rio Tinto and Glencore all up.

Ferguson jumped to the top of the FTSE 100 after saying its expectations for annual results had increased as the plumbing and heating distributor reported a surge in first-quarter profit.

Equipment rental firm Ashtead rallied after it upgraded expectations for the full year as it reported a record first-half performance, hailing momentum across the business.

PageGroup gained after saying it now expects full-year operating profit of around £165m, up from previous guidance of £155m, while Paragon Banking rose as it posted record full-year profits.

Defence engineering firm Babcock advanced as it reported a rise in underlying interim profit, but expressed caution over the Omicron coronavirus variant and ongoing inflation and supply chain constraints.

On the downside, AstraZeneca was knocked lower by a downgrade to ‘hold’ from ‘buy’ at Jefferies, while St James’s Place was weaker after a downgrade to ‘neutral’ at JPMorgan.

Market Movers

FTSE 100 (UKX) 7,296.92 0.89%
FTSE 250 (MCX) 23,075.12 0.85%
techMARK (TASX) 4,438.01 0.62%

FTSE 100 - Risers

Ferguson (FERG) 12,115.00p 4.71%
Entain (ENT) 1,741.00p 3.02%
Ashtead Group (AHT) 6,366.00p 2.71%
Anglo American (AAL) 2,888.00p 2.68%
Rio Tinto (RIO) 4,710.00p 2.56%
JD Sports Fashion (JD.) 224.40p 2.37%
Glencore (GLEN) 365.60p 2.35%
Aveva Group (AVV) 3,272.00p 2.28%
Evraz (EVR) 603.20p 2.27%
Flutter Entertainment (CDI) (FLTR) 10,865.00p 2.26%

FTSE 100 - Fallers

AstraZeneca (AZN) 8,281.00p -0.98%
Hargreaves Lansdown (HL.) 1,296.00p -0.88%
National Grid (NG.) 1,019.00p -0.57%
St James's Place (STJ) 1,570.00p -0.51%
United Utilities Group (UU.) 1,094.00p -0.36%
BAE Systems (BA.) 557.20p -0.29%
Reckitt Benckiser Group (RKT) 6,203.00p -0.27%
Hikma Pharmaceuticals (HIK) 2,274.00p -0.22%
Barclays (BARC) 186.68p -0.20%
Avast (AVST) 604.40p -0.20%

FTSE 250 - Risers

Ferrexpo (FXPO) 303.80p 6.30%
Cineworld Group (CINE) 53.14p 5.60%
Dr. Martens (DOCS) 406.00p 4.48%
Pagegroup (PAGE) 680.00p 4.13%
Paragon Banking Group (PAG) 561.00p 4.08%
Network International Holdings (NETW) 283.90p 4.03%
Babcock International Group (BAB) 318.50p 3.81%
Moonpig Group (MOON) 336.40p 3.19%
Edinburgh Worldwide Inv Trust (EWI) 304.00p 3.05%
SSP Group (SSPG) 241.40p 2.64%

FTSE 250 - Fallers

Victrex plc (VCT) 2,310.00p -5.71%
Direct Line Insurance Group (DLG) 270.70p -1.06%
Virgin Money UK (VMUK) 168.95p -0.91%
Hammerson (HMSO) 33.44p -0.89%
Restaurant Group (RTN) 90.20p -0.66%
Investec (INVP) 391.60p -0.61%
Pantheon International (PIN) 331.00p -0.60%
Wizz Air Holdings (WIZZ) 4,464.00p -0.42%
Ibstock (IBST) 199.10p -0.35%
BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 173.80p -0.34%