London open: Stocks rise as US avoids govt shutdown; house price data in focus

London stocks edged higher in early trade on Monday after the US narrowly avoided a government shutdown over the weekend, and as investors mulled the latest UK house price data.

At 0850 BST, the FTSE 100 was up 0.2% at 7,621.81.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "’With a US government shutdown averted for now, it has brought a measure of relief, helping the FTSE 100 step into October with a nudge of positivity in early trade.

"Manufacturing in China was eking out growth in September but the latest factory data doesn’t set fire to enthusiasm given the closely watched Caixin PMI data shows activity is still being held back by falling exports. Nevertheless, commodity giants, sensitive to growth prospects in China, have started on the front foot."

On home shores, the latest survey from Nationwide showed that annual house prices fell again in September as high interest rates continue to dent affordability.

Annual house prices were down 5.3% in September, in line with the decline seen in August, which was the weakest since July 2009.

On the month, prices were flat, having fallen by 0.8% in August. The average price of a property now stands at £257,808.

Nationwide chief economist Robert Gardner said: "Housing market activity remains weak, with just 45,400 mortgages approved for house purchase in August, circa 30% below the monthly average prevailing in 2019 before the pandemic struck. This relatively subdued picture is not surprising given the more challenging picture for housing affordability. For example, someone earning an average income and purchasing the typical first-time buyer home with a 20% deposit would spend 38% of their take home pay on their monthly mortgage payment - well above the long-run average of 29%.

"However, investors have marked down their expectations for the future path of Bank Rate in recent months amid signs that underlying inflation pressures in the UK economy are finally easing, and with labour market conditions softening. This in turn has put downward pressure on longer term interest rates which underpin fixed rate mortgage pricing. If sustained, this will ease some of the pressure on those remortgaging or looking to buy a home."

The week before last, the Bank of England stood pat on interest rates for the first time in nearly two years, at 5.25%.

In equity markets, defence contractor BAE Systems shot higher after the Ministry of Defence awarded it £3.95bn of funding for the next phase of the UK's next-generation nuclear-powered attack submarine programme, known as SSN-AUKUS.

The shares were also boosted by an upgrade to ‘buy’ from ‘hold’ at Berenberg, which hiked the price target to 1,170p from 1,050p.

Babcock also gained after it signed a five-year contract with the MoD.

Antofagasta advanced after Citi upgraded shares of the Chilean copper miner to ‘buy’ on volume recovery potential and valuation.

United Utilities rose as it unveiled its plans for the 2025-2030 period, projecting expenditure of £13.7bn, leading to 8.7% yearly growth in regulated capital value. The plan will support 30,000 jobs in the north west, including 7,000 new positions, and provide affordability schemes worth £525m, aiding over one-sixth of its customers.

Pennon rallied after saying it traded in line with expectations in its first half and that it submitted plans to Ofwat to invest £2.8bn in water quality and resilience. The investment, for South West Water, relates to the K8 period between 2025 and 2030, and will create 2,000 jobs along with 1,000 apprenticeships and graduates.

Market Movers

FTSE 100 (UKX) 7,621.81 0.18%
FTSE 250 (MCX) 18,385.82 0.58%
techMARK (TASX) 4,286.77 -1.28%

FTSE 100 - Risers

BAE Systems (BA.) 1,021.00p 2.33%
United Utilities Group (UU.) 969.40p 2.24%
Antofagasta (ANTO) 1,453.50p 1.71%
Anglo American (AAL) 2,302.50p 1.63%
Burberry Group (BRBY) 1,939.50p 1.62%
Melrose Industries (MRO) 476.40p 1.53%
Entain (ENT) 946.00p 1.42%
JD Sports Fashion (JD.) 151.70p 1.34%
InterContinental Hotels Group (IHG) 6,148.00p 1.22%
Pershing Square Holdings Ltd NPV (PSH) 3,020.00p 1.21%

FTSE 100 - Fallers

NATWEST GROUP (NWG) 233.60p -0.89%
GSK (GSK) 1,480.40p -0.78%
AstraZeneca (AZN) 11,018.00p -0.76%
Smith & Nephew (SN.) 1,015.50p -0.73%
Hargreaves Lansdown (HL.) 768.20p -0.65%
Halma (HLMA) 1,927.00p -0.59%
Experian (EXPN) 2,676.00p -0.56%
Admiral Group (ADM) 2,365.00p -0.50%
3i Group (III) 2,063.00p -0.48%
Beazley (BEZ) 551.50p -0.36%

FTSE 250 - Risers

Helios Towers (HTWS) 77.75p 5.93%
Baltic Classifieds Group (BCG) 204.00p 4.62%
FDM Group (Holdings) (FDM) 542.00p 4.23%
Foresight Group Holdings Limited NPV (FSG) 448.00p 4.19%
W.A.G Payment Solutions (WPS) 95.80p 4.13%
Auction Technology Group (ATG) 675.00p 3.37%
Pennon Group (PNN) 604.50p 3.16%
Apax Global Alpha Limited (APAX) 167.00p 2.83%
Plus500 Ltd (DI) (PLUS) 1,415.00p 2.76%
Baillie Gifford Japan Trust (BGFD) 714.00p 2.73%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 278.20p -2.66%
888 Holdings (DI) (888) 98.30p -1.90%
Foresight Solar Fund Limited (FSFL) 91.50p -1.40%
JPMorgan Emerging Markets Inv Trust (JMG) 101.80p -1.36%
Bankers Inv Trust (BNKR) 95.60p -1.34%
PureTech Health (PRTC) 179.20p -0.99%
Worldwide Healthcare Trust (WWH) 306.50p -0.97%
Close Brothers Group (CBG) 878.00p -0.90%
Hipgnosis Songs Fund Limited NPV (SONG) 79.50p -0.87%
Darktrace (DARK) 400.00p -0.84%