London close: Stocks firmer ahead of key inflation readings

dl city of london square mile financial district walkie talkie night dusk sunset winter unsplash — Sharecast / Tim Arterbury via Unsplash

London markets closed in a resilient state on Monday, maintaining positive momentum from the end of last week after solid gains on Wall Street on Friday.

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Investors remained focused on inflation data releases from the UK and the US due this week.

The FTSE 100 gained 0.89% to reach 7,425.83 points, while the FTSE 250 registered an upward swing of 0.34% to 17,913.65.

In the foreign exchange market, sterling was last up 0.33% on the dollar, trading at $1.2267, while it strengthened 0.2% against the euro to change hands at €1.1465.

“The FTSE 100 has found a dose of Monday motivation amid hopes that peak interest rates have been reached, despite warnings about America’s huge debt pile and ongoing geo-political fracture,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown, earlier in the day.

“There is a little more optimism edging in on markets ahead of key inflation data out this week, with sentiment fluctuating about what lies ahead for monetary policy.

“Investor sentiment is volatile when it comes to expectation of bank policy, swinging from pessimism to optimism from session to session.”

Streeter said investors would be hanging on the words of central bank policymakers this week, with a slew of speeches expected for clues about the future trajectory of monetary policy.

House prices decline in November, Heathrow passenger numbers climb

In economic news, UK house prices fell in November as sellers adjusted their expectations to facilitate sales, according to fresh industry data.

Rightmove’s latest house price index revealed a 1.7% drop in the average new selling asking price, settling at £362,143.

That decline represented the sharpest November drop since 2018, with prices falling 1.3% annually.

It also compared with the 0.5% monthly increase and 0.8% year-on-year decrease in October.

Rightmove attributed this trend to sellers lowering prices as Christmas approached, aiming to attract buyers facing financial constraints.

While agreed sales in November were 10% below pre-pandemic 2019 levels, it marked an improvement from October when they were 15% below 2019 figures.

“We’d expect to see a drop in new seller asking prices in the last couple of the months of the year, as serious sellers start to cut through the Christmas noise with an attractive price to secure a buyer,” said Tim Bannister, director of property science at Rightmove.

“However, the larger-than-usual drop this month signals that among the usual pricing seasonality, we are starting to see more new sellers come to market with more enticing prices.

“Buyers are still out there, but for many their affordability is much reduced due to higher mortgage rates.”

Elsewhere, the UK’s busiest airport, Heathrow, reported an 18% year-on-year increase in passenger numbers for October, reaching 6.96 million, up from 5.89 million in October last year.

The airport recorded 40,201 air transport movements in the month, reflecting a 16% rise compared to the prior year period.

Over the first 10 months of 2023, passenger numbers surged 32% year-on-year to 66.32 million, while air transport movements increased 23% to 378,710.

Heathrow’s busiest year on record was 2019 when 80.9 million passengers passed through the airport.

Elsewhere, lending growth in the People’s Republic of China saw a modest uptick last month despite signs of cooling domestic demand amid increased fiscal stimulus efforts.

Data from the People’s Bank of China showed that aggregate financing decreased from CNY 4.12bn in September to CNY 1.85bn in October, slightly below the consensus forecast of CNY 1.95bn.

However, on a year-on-year basis, total credit growth accelerated 0.1%, reaching 9.4% in October, driven by higher government bond issuance.

Those figures indicated ongoing efforts to manage lending activity and stimulate the Chinese economy.

Phoenix Group jumps, Kainos and FDM tumble

On London’s equity markets, Phoenix Group Holdings rose 5.44% after raising its full-year cash generation targets following the successful merger of its Standard Life and Phoenix Life businesses into a single entity.

British Land Company gained 2.1% after reporting a decline in half-year net asset value but expressing optimism about rental value growth, expecting it to be at the upper end of its previously guided ranges for 2024.

M&G witnessed a 1.57% increase, driven by JPMorgan's upgrade from ‘underweight’ to ‘neutral’.

Aerospace giant BAE Systems nudged up 0.27% after it reported trading in line with expectations after a strong third quarter and £10bn in orders booked since the half-year stage.

Aviva rose 2.16% after JPMorgan Cazenove highlighted its ‘overweight’ rated stock as offering the most diversified UK insurance business, backed by solid management and an attractive total capital return.

Just Group was ahead 3.22% after JPMorgan Cazenove reiterated its ‘overweight’ rating, emphasising the company’s potential for strong earnings growth and surplus capital, with the possibility of upside surprises on dividends.

On the downside, Kainos Group tumbled 22.4% despite posting increased first-half profit and revenue but reporting a drop in bookings and healthcare revenues.

FDM Group Holdings slid 17.99% after it warned of a performance impact in 2024 due to a lower-than-expected number of consultants assigned to clients at the beginning of the year.

Dr Martens experienced an 8.84% decrease after being downgraded from ‘overweight’ to ‘equalweight’ by Barclays.

International Distributions Services registered a modest decline of 1.04% after Ofcom imposed a £5.6m fine on Royal Mail for missing postal delivery targets in the last financial year.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,425.86 0.89%
FTSE 250 (MCX) 17,913.65 0.34%
techMARK (TASX) 4,063.82 0.47%

FTSE 100 - Risers

Phoenix Group Holdings (PHNX) 490.50p 5.67%
Rolls-Royce Holdings (RR.) 240.20p 3.53%
Melrose Industries (MRO) 530.40p 2.99%
Smith & Nephew (SN.) 1,015.50p 2.68%
British American Tobacco (BATS) 2,542.50p 2.64%
Auto Trader Group (AUTO) 699.20p 2.52%
Rentokil Initial (RTO) 457.70p 2.51%
Aviva (AV.) 413.20p 2.20%
Legal & General Group (LGEN) 225.10p 2.09%
Pershing Square Holdings Ltd NPV (PSH) 3,038.00p 2.08%