London midday: FTSE touch higher as BP slumps, HSBC rallies

The FTSE 100 was up just 0.1% at 8,290.43.

Danni Hewson, head of financial analysis at AJ Bell, said: "A huge chunk of the S&P 500 are reporting this week including five of the Magnificent Seven, so investors will get an excellent sense of the overall shape of the US third-quarter earnings season over the next few days. Although any market focus on earnings will rapidly be diverted to next week’s presidential election and Federal Reserve meeting.

"In London, positive numbers from HSBC helped lift other Asia-focused financials like Standard Chartered and Prudential.

"There was some good news ahead of the Budget as prices in the shops fell by their sharpest rate since August 2021, reducing some pressure on household finances."

Data from the Bank of England showed that mortgage approvals have climbed to their highest level since before 2022’s disastrous mini Budget.

Net mortgage approvals for house purchases rose to 65,600 in September, the highest level since August 2022, when they reached 72,000. Analysts had expected September’s approvals to be nearer 65,000.

Approvals for re-mortgaging also increased, rising by 3,100 to 30,800.

September 2022’s so-called mini Budget, delivered by then prime minister Liz Truss and chancellor Kwasi Kwarteng, unnerved markets and sent mortgage rates soaring.

However, this year the housing market has benefited from a new government, mortgage rates coming off highs and the BoE trimming the cost of borrowing for the first time since 2020 in August.

The BoE’s monthly money and credit report also showed that net borrowing of consumer credit by individuals fell to £1.2bn from £1.4bn in August. As a result, the annual growth rate for all consumer credit eased to 7.5% from 7.7%.

Household deposits with banks and building societies, meanwhile, jumped by £8.2bn, including an additional £3.9bn put into ISAs. This was despite the effective interest rate paid on individuals’ new time deposits with banks and building societies falling by six basis points to 4.31%.

Net mortgage debt held by individuals was £2.5bn, a £0.3bn dip.

Earlier, the British Retail Consortium urged the chancellor to take action to keep prices low after the trade association’s latest data showed that shop price deflation accelerated in October.

Prices at UK tills were 0.8% lower than 12 months ago, compared with a 0.6% year-on-year fall in September, according to the BRC/NielsenIQ Shop Price Index for October.

This was the third straight month of annual deflation and lowest rate of change since August 2021.

Non-food prices fell by 2.1%, unchanged from the previous month, while food prices grew by 1.9%, down from 2.3% previously, with fresh food inflation in particular slowing to 1.0% from 1.5%.

The BRC said that food inflation eased as retailers stepped up their seasonal deals, while non-food items like electrical and DIY products were priced lower as retailers capitalised on the recent pick-up in the housing market.

"Households will welcome the continued easing of price inflation, but this downward trajectory is vulnerable to ongoing geopolitical tensions, the impact of climate change on food supplies, and costs from planned and trailed government regulation," said BRC chief executive Helen Dickinson.

"Retail is already paying more than its fair share of taxes compared to other industries. The chancellor using tomorrow’s Budget to introduce a Retail Rates Corrector, a 20% downwards adjustment, to the business rates bills of all retail properties will allow retailers to continue to offer the best possible prices to customers while also opening shops, protecting jobs and unlocking investment."

In equity markets, HSBC jumped to the top of the FTSE 100 as it announced another $3bn share buyback and posted better-than-expected third-quarter profits, underpinned by solid performances from the wealth and investment banking units.

In the three months to the end of September, pre-tax profit rose 10% on the same period a year earlier to $8.5bn, versus analysts’ expectations of $7.6bn. HSBC said revenue increased 5% to $17bn, reflecting higher customer activity in its wealth products, supported by volatile market conditions.

Net interest income fell by $1.6bn to $7.6bn, reflecting reductions due to business disposals, higher interest expense on liabilities and a loss on the early redemption of legacy securities.

Educational publisher Pearson gained as it reiterated its full-year outlook after an uptick in quarterly sales.

Updating on trading, the blue chip said sales rose 4% in the third quarter and by 2% in the year to date. Underlying sales growth, which strips out businesses under strategic review, was 5% and 3% respectively over the two periods.

Driving the uplift was a 6% jump in sales in Pearson’s core assessment and qualifications division, and in workforce skills. Sales strengthened 4% in virtual learning and by 4% in higher education.

Specialty chemicals group Elementis rose as it hailed an "improved" third-quarter performance, with revenue higher across both business segments.

On the downside, BP slumped as it reported a slide in quarterly profits, hit by weaker refining margins, although the decline was not as steep as feared.

Underlying replacement cost profit, a key measure for the oil and gas major, was $2.3bn in the third quarter. That was down on both the second quarter’s $2.8bn, and last year’s $3.3bn.

BP said the results reflected weaker refining margins, a weak oil trading result and lower liquids realisations, although they were partly offset by higher gas realisations.

Hargreaves Lansdown was little changed as it reported assets under administration of £157.3bn for the quarter ended 30 September, with growth driven by £1.5bn in positive market movements and £0.5bn in net new business.

Market Movers

FTSE 100 (UKX) 8,290.43 0.06%
FTSE 250 (MCX) 20,703.32 -0.63%
techMARK (TASX) 4,731.03 -0.27%

FTSE 100 - Risers

HSBC Holdings (HSBA) 722.40p 4.38%
Antofagasta (ANTO) 1,861.50p 3.02%
Pearson (PSON) 1,100.00p 2.66%
Standard Chartered (STAN) 887.60p 2.52%
Prudential (PRU) 666.80p 2.27%
Anglo American (AAL) 2,496.50p 1.36%
WPP (WPP) 841.80p 1.35%
Glencore (GLEN) 410.25p 1.28%
Fresnillo (FRES) 762.50p 1.26%
Rio Tinto (RIO) 5,131.00p 1.06%

FTSE 100 - Fallers

Airtel Africa (AAF) 105.40p -3.83%
Melrose Industries (MRO) 472.50p -2.90%
JD Sports Fashion (JD.) 129.70p -2.48%
BP (BP.) 389.90p -2.31%
Hikma Pharmaceuticals (HIK) 1,890.00p -2.22%
Rolls-Royce Holdings (RR.) 549.40p -1.96%
Lloyds Banking Group (LLOY) 55.22p -1.60%
Diploma (DPLM) 4,314.00p -1.51%
Intermediate Capital Group (ICG) 2,120.00p -1.40%
International Consolidated Airlines Group SA (CDI) (IAG) 212.30p -1.39%

FTSE 250 - Risers

Elementis (ELM) 142.20p 2.89%
TBC Bank Group (TBCG) 2,650.00p 2.51%
Indivior (INDV) 706.00p 2.02%
Kainos Group (KNOS) 855.00p 1.91%
Trainline (TRN) 374.60p 1.79%
Aston Martin Lagonda Global Holdings (AML) 106.20p 1.72%
Energean (ENOG) 978.50p 1.61%
Close Brothers Group (CBG) 258.60p 1.49%
Hill and Smith (HILS) 2,045.00p 1.49%
PureTech Health (PRTC) 154.60p 1.44%

FTSE 250 - Fallers

CMC Markets (CMCX) 303.50p -4.86%
Plus500 Ltd (DI) (PLUS) 2,314.00p -4.70%
IG Group Holdings (IGG) 895.00p -3.35%
FirstGroup (FGP) 136.00p -3.27%
C&C Group (CDI) (CCR) 156.40p -3.22%
Burberry Group (BRBY) 761.80p -3.18%
Mitchells & Butlers (MAB) 262.50p -2.96%
TP Icap Group (TCAP) 228.00p -2.77%
Bakkavor Group (BAKK) 152.50p -2.56%
St James's Place (STJ) 827.50p -2.53%