London open: Stocks up after encouraging Chinese manufacturing, UK house price data

London stocks rose in early trade on Friday after the release of encouraging Chinese manufacturing and UK house price data, with miners pacing the gains.

At 0830 GMT, the FTSE 100 was up 0.8% at 7,510.87.

Investors were digesting manufacturing figures out of China. The Caixin/S&P Global manufacturing purchasing managers' index rose to 50.7 in November from 49.5 in October.

This was above the 50.0 level that separates contraction from expansion and marked the fastest expansion in three months. However, it contrasts with the official manufacturing PMI released on Thursday, which nudged down to 49.4 from 49.5.

Capital Economics said: "At face value, the average of the two is consistent with factory activity remaining largely unchanged last month.

"But that may not be the case in practice - the hard data have held up better than survey-based measures lately."

On home shores, the latest Nationwide survey showed that house prices unexpectedly rose again last month.

House prices were up 0.2% on the month following a 0.9% increase in October. This was the third monthly rise in a row and ahead of expectations for a 0.4% decline.

On the year, house prices were 2.2% lower in November following a 3.3% drop the month before. Analysts were expecting a 2.5% decline. Nationwide pointed out that while this was still weak, it was the strongest outturn since February.

The average price of a home now stands at £258,557.

Nationwide chief economist Robert Gardner said: "There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity."

He noted that in mid-August, investors were expecting the Bank of England to raise rates to a peak of around 6% and lower them only modestly, to around 4% over the next five years. However, by the end of November, this had shifted to a view that rates have now peaked at 5.25% and will be lowered to around 3.5% in the years ahead.

"These shifts are important as they have led to a decline in the longer-term interest rates (swap rates) that underpin fixed rate mortgage pricing," he said. "If sustained, this will help to ease the affordability pressures that have been stifling housing market activity in recent quarters, where the number of mortgage approvals for house purchases has been running at c.30% below pre-pandemic levels."

Still to come, the S&P Global/CIPS UK manufacturing PMI for November is due at 0930 GMT.

In equity markets, mining stocks were boosted by the upbeat Chinese data and by broker notes. Anglo American and Antofagasta both rallied after upgrades to ‘buy’ from ‘neutral’ at UBS.

On the downside, education publisher Pearson fell after a downgrade to ‘hold’ from ‘buy’ at Deutsche Bank.

Ceres Power tumbled as it warned that full-year revenues were set to drop on the year to around £20m to £21m, from £22m in FY2022.

Market Movers

FTSE 100 (UKX) 7,510.87 0.77%
FTSE 250 (MCX) 18,294.43 0.33%
techMARK (TASX) 4,109.26 0.99%

FTSE 100 - Risers

Anglo American (AAL) 2,208.00p 3.08%
Rio Tinto (RIO) 5,542.00p 2.65%
Antofagasta (ANTO) 1,437.00p 2.02%
Frasers Group (FRAS) 899.50p 1.75%
International Consolidated Airlines Group SA (CDI) (IAG) 155.70p 1.70%
Glencore (GLEN) 449.15p 1.66%
Melrose Industries (MRO) 526.40p 1.50%
InterContinental Hotels Group (IHG) 6,206.00p 1.47%
AstraZeneca (AZN) 10,274.00p 1.46%
Rolls-Royce Holdings (RR.) 272.60p 1.41%

FTSE 100 - Fallers

Tesco (TSCO) 280.30p -1.92%
Sainsbury (J) (SBRY) 281.60p -1.50%
Hargreaves Lansdown (HL.) 712.60p -0.81%
Entain (ENT) 799.00p -0.47%
Ocado Group (OCDO) 597.20p -0.47%
Spirax-Sarco Engineering (SPX) 9,216.00p -0.35%
Flutter Entertainment (CDI) (FLTR) 12,330.00p -0.32%
Legal & General Group (LGEN) 228.80p -0.22%
Aviva (AV.) 416.60p -0.22%
United Utilities Group (UU.) 1,089.00p -0.18%

FTSE 250 - Risers

888 Holdings (DI) (888) 74.05p 4.74%
Supermarket Income Reit (SUPR) 85.00p 4.55%
Volution Group (FAN) 410.00p 3.90%
Tyman (TYMN) 273.00p 3.80%
NCC Group (NCC) 126.00p 3.79%
4Imprint Group (FOUR) 4,430.00p 3.75%
Dunelm Group (DNLM) 1,074.00p 3.07%
Empiric Student Property (ESP) 94.00p 2.96%
Bodycote (BOY) 588.50p 2.53%
IntegraFin Holding (IHP) 259.00p 2.45%

FTSE 250 - Fallers

Ceres Power Holdings (CWR) 157.00p -16.40%
Auction Technology Group (ATG) 470.00p -3.09%
Pets at Home Group (PETS) 313.00p -2.25%
Playtech (PTEC) 402.00p -2.14%
Rotork (ROR) 301.80p -2.08%
Elementis (ELM) 116.00p -2.03%
FDM Group (Holdings) (FDM) 384.00p -1.79%
Mobico Group (MCG) 65.70p -1.72%
Trainline (TRN) 280.40p -1.68%
Fidelity China Special Situations (FCSS) 209.50p -1.64%