Hot Features
Premium
Register to chat with like-minded investors on our interactive forums.
London open: Stocks rally on strong US cues; house prices pick up
London stocks rallied in early trade on Thursday following strong gains on Wall Street, particularly for the tech sector, and encouraging UK house price data.
At 0830 BST, the FTSE 100 was up 1.2% at 8,292.60.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “US markets bounced after the CPI inflation print all but secured the Fed’s first rate cut next week. CPI isn’t the Fed’s preferred inflation measure, but with a little bit of jigging, we can get a decent idea of what the preferred PCE number might look like, and it’s all starting to paint the same picture – inflation that’s behaving well. Markets are pricing in an 87% chance of a 0.25% cut, and there wasn’t much in this data to suggest a bolder move is needed.
“Tech was back leading the charge, with the S&P 500’s chip sector up 6.65%. Nvidia’s had a bumpy ride of late, but markets were encouraged by CEO Jensen Huang’s bullish conference commentary on demand.”
On home shores, data released earlier showed that house prices sparked for the first time in nearly two years in August, boosted by declining mortgage rates and improving confidence in the market.
According to the latest UK Residential Market Survey from the Royal Institution of Chartered Surveyors, the house prices net balance was 1, a significant improvement on July’s -18 and the first time prices have moved into positive territory since October 2022.
In addition, a balance of 14 respondents predicted prices would continue to rise over the next three months.
A balance is the proportion of respondents reporting a rise in prices minus those reporting a fall.
The number of people looking to buy homes also increased in August, the survey showed, with a balance of 15, compared to 4 in July. New property listings ticked up to 7 from 3.
RICS called it a “positive shift” in the UK housing market.
Simon Rubinsohn, RICS chief economist, said: “The latest survey captures an improvement in sentiment over the past month in the wake of the modest decline in mortgage rates.”
However, he also sounded a note caution: “Anecdotal remarks from respondents still demonstrate the need for realistic pricing to get deals done, with uncertainty both around the scope for further interest rate cuts and the likely contents of the forthcoming Budget keeping the mood in check.
“Affordability remains an issue in the sales market, even with somewhat cheaper finance now available.”
Later in the day, investors will turn their attention to the US producer price index for August. They will also be eyeing the latest policy announcement from the European Central Bank, due at 1315 BST. It’s widely expected to cut rates by 25 basis points.
In equity markets, Scottish Mortgage Investment – which has a heavy exposure to US tech – was the top gainer on the FTSE 100.
Trainline surged as it lifted its full-year profit outlook following a strong first half, which was ahead of its expectations.
NCC was also a high riser as the cyber security firm said trading in the fourth quarter was better than expected.
Kier Group gained as the construction firm posted a rise in full-year profit and revenue.
On the downside, M&G, Intertek and Endeavour were all in the red as they traded without entitlement to the dividend.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
South32 Limited | +4.14% | +6.30 | 158.40 |
| 2 |  |
Scottish Mortgage Investment Trust Plc | +3.32% | +26.40 | 820.80 |
| 3 |  |
Anglo American Plc | +3.30% | +66.00 | 2,068.50 |
| 4 |  |
Antofagasta Plc | +3.23% | +54.50 | 1,740.50 |
| 5 |  |
Jd Sports Fashion Plc | +3.15% | +4.40 | 144.20 |
| 6 |  |
Glencore Plc | +3.14% | +11.40 | 374.20 |
| 7 |  |
Carnival Plc | +2.87% | +32.00 | 1,145.50 |
| 8 |  |
Smurfit Westrock Plc | +2.60% | +85.00 | 3,357.00 |
| 9 |  |
Rio Tinto Plc | +2.53% | +117.00 | 4,747.50 |
| 10 |  |
Banco Santander S.a. | +2.38% | +8.50 | 365.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Haleon Plc | -1.47% | -5.80 | 388.20 |
| 2 |  |
British American Tobacco Plc | -0.97% | -29.00 | 2,955.00 |
| 3 |  |
Astrazeneca Plc | -0.67% | -82.00 | 12,226.00 |
| 4 |  |
Sse Plc | -0.53% | -10.50 | 1,977.00 |
| 5 |  |
Unilever Plc | -0.42% | -21.00 | 4,947.00 |
| 6 |  |
National Grid Plc | -0.24% | -2.50 | 1,039.50 |
| 7 |  |
Vodafone Group Plc | -0.21% | -0.16 | 76.42 |
| 8 |  |
Pearson Plc | -0.10% | -1.00 | 1,043.00 |
| 9 |  |
United Utilities Group Plc | -0.09% | -1.00 | 1,058.50 |
| 10 |  |
Severn Trent Plc | -0.07% | -2.00 | 2,688.00 |
US close: Stocks race higher as investors digest inflation figures
Despite an earlier wobble, US equity markets raced into positive territory on Wednesday as investors assessed a key inflation report and what it means for interest rates ahead of the Federal Reserve’s meeting next week.
Markets were also still continuing to digest the previous evening’s presidential debate, where Kamala Harris was widely seen as the victor in her contentious Q&A alongside Donald Trump.
The Dow finished just 0.3% higher after a late-afternoon rally into the black, but the S&P 500 jumped 1.1% and the Nasdaq surged 2.2%.
Inflation in focus
Wednesday’s main event was August’s consumer price index, which revealed that the rate of increase in the cost of living slowed sharply last month, as food inflation eased off and energy prices fell.
According to the US Department of Labor, the annual increase in the headline consumer price index slowed from 2.9% in July to a new three-year low of 2.5% for August. Economists had pencilled in a reading 2.6%.
Core consumer price gains, on the other hand, picked up a tad month-on-month, rising by 0.3% after a 0.2% gain previously. The annual rate of core inflation held steady at 3.2%.
Danni Hewson, AJ Bell’s head of financial analysis, said the data “seems to have sealed the deal” for a rate cut from the Fed when it meets on 18 September.
“Market expectation according to the CME’s FedWatch tool now sits at a whopping 85% for a 25 basis point cut, with only a handful now believing central bankers will cut deeper,” Hewson said.
“The fact there is a degree of stickiness to core inflation has curbed expectations, with most investors now thinking the Fed will follow the Bank of England and take a cautious approach to unravelling tight monetary policy in a bid to prevent inflationary embers being stoked.”
Elsewhere on the macro front, mortgage applications rose 1.4% in the week ended 6 September, according to the Mortgage Bankers Association of America, following a 1.6% increase in the previous week. Applications to purchase a home were up 2%, while refinance applications rose 1%.
Market movers
GameStop shares sank 12% after the video game retailer reported a big drop in second-quarter sales and announcing an “at-the-market” stock offering of up to 20m shares.
Trump Media & Technology was more than 10% lower, dropping to its lowest level since its March IPO in the aftermath of Tuesday’s debate.
Meanwhile in the banking sector, Morgan Stanley was hit with a downgrade by Goldman Sachs to ‘neutral’, while Bank of America was hit by the news that Berkshire Hathaway cut its stake in the lender to 11%.
Wednesday newspaper round-up: Telegraph, flexible working, Ford
The owner of the New York Sun has emerged as the latest bidder aiming to take control of the Daily and Sunday Telegraph. British-born Dovid Efune, who took control of the assets of the former newspaper the New York Sun three years ago, is understood to be in the running to lodge an offer before the deadline set for second-round bidders on 27 September. – Guardian
The owner of Canary Wharf has had its credit rating cut deeper into “junk” territory over concerns about its debts as it struggles to attract workers back to the east London office hub after the pandemic. The credit rating agency Fitch has further downgraded Canary Wharf Group, the landlord of the development, in a reflection of risks over an upcoming bond refinancing. – Guardian
Older workers risk losing out to younger colleagues in Angela Rayner’s flexible working push, with younger staff dominating discussions with bosses over different patterns of work. Just 24pc of those aged over 55 have spoken to their managers about flexible working since the right to request different arrangements came into force in April, according to a survey from Phoenix Group. By contrast 54pc of those aged 18 to 34 have taken time with their bosses to discuss flexible working. – Telegraph
Ford has filed a patent for technology that can eavesdrop on drivers and passengers to serve them hyper-targeted advertising. The technology would allow the car’s infotainment system to listen to “conversations between occupants of the vehicles”, which its software could then filter for “keywords or phrases”. The system would learn what adverts “annoy or irritate” based on remarks “spoken by the user when ads are presented to them”, while it would be able to recognise the vehicle’s occupants based on in-car cameras or microphones and tailor its adverts to each person. – Telegraph
Caroline Ellison has urged a federal judge not to send her to jail after the former cryptocurrency executive helped prosecutors to win a jail sentence for her former boyfriend Sam Bankman-Fried. Ellison, 29, has pleaded guilty over her role in the multibillion-dollar collapse of FTX, the cryptocurrency exchange. Customers of FTX and Alameda Research, its sister company where she was chief executive, were defrauded out of an estimated $8 billion. – The Times
