London midday: Stocks a touch lower amid lack of catalysts

19th Aug 2024 10:47

(Sharecast News) - London stocks were just a touch lower by midday on Monday, with little in the way of corporate or macro news to move markets.

The FTSE 100 was down 0.1% at 8,303.03.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 started the week in sluggish fashion, starved of catalysts either from a macro-economic or corporate point of view.

"The attention in terms of central bank action will centre on Asia over the next week. Bank of Japan governor Kazuo Ueda is due to appear before the country's parliament to discuss the 31 July rate hike which precipitated much of the recent market volatility, while the People's Bank of China is expected to keep rates steady. Indonesia, South Korea and Thailand are also due to update on monetary policy.

"Later in the week attention is likely to turn to the Jackson Hole Symposium in Wyoming, with Federal Reserve chair Jerome Powell scheduled to speak on Friday. Investors will be looking for hints on the trajectory of rate cuts, with a cut in September more or less a racing certainty in the minds of most observers.

"Powell's words and tone could help determine whether the market's bounce since the short, sharp shock in early August is sustained."

On home shores, data from Rightmove showed that this month's interest rate cut has provided a much-needed catalyst to the UK housing market, with the number of buyers rising by nearly a fifth.

The number of potential buyers contacting estate agents about homes for sales has risen 19% on last year since 1 August, with annual growth accelerating from 11% across the month of July.

The upturn was driven by the first Bank of England rate cut in four years at the start of the month, with the Bank Rate falling to 5.0%, from the 16-year high of 5.25% which has been in place since June 2023.

Meanwhile, the number of new sellers coming to market was also 5% ahead of last year as the confidence to move grows.

"The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity," said Tim Bannister, Rightmove's director of property science.

"While mortgage rates aren't yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment," Bannister said.

In equity markets, Plus500 rallied after it said FY2024 results were set to be ahead of current market expectations for revenue and EBITDA of $697.8m and $314.6m, respectively.

On the downside, defence firm BAE Systems slumped following reports that Germany plans to cut military aid to Ukraine. Rolls-Royce also lost ground.

Elsewhere, Barratt Developments and Redrow were in focus as they said their impending £2.5bn merger should complete later this week despite local competition concerns raised by regulators.

"Barratt's acquisition of Redrow is expected to clear within the week, creating a new leader in the UK housebuilding space," said Mould.

"The issues raised by the competition authorities always looked surmountable given they were restricted to just one part of Whitchurch in Shropshire and Barratt has waived the CMA clearance condition which had been written into the deal. An enforcement order from the regulator is likely but Barratt and Redrow are ready for it and will presumably do what's necessary to prevent the probe going any further."

Market Movers

FTSE 100 (UKX) 8,303.03 -0.10%

FTSE 250 (MCX) 21,068.18 0.09%

techMARK (TASX) 4,901.02 0.00%

FTSE 100 - Risers

Burberry Group (BRBY) 700.20p 1.98%

JD Sports Fashion (JD.) 129.15p 1.81%

Glencore (GLEN) 410.55p 1.66%

Entain (ENT) 645.20p 1.10%

Sage Group (SGE) 1,026.50p 1.08%

Rio Tinto (RIO) 4,792.50p 1.06%

Anglo American (AAL) 2,206.50p 0.96%

Frasers Group (FRAS) 856.00p 0.88%

Airtel Africa (AAF) 112.20p 0.81%

SEGRO (SGRO) 893.80p 0.72%

FTSE 100 - Fallers

BAE Systems (BA.) 1,321.50p -2.11%

Rolls-Royce Holdings (RR.) 494.20p -1.36%

Pershing Square Holdings Ltd NPV (PSH) 3,606.00p -1.31%

Spirax Group (SPX) 7,485.00p -1.12%

Berkeley Group Holdings (The) (BKG) 5,120.00p -1.06%

Smith (DS) (SMDS) 459.40p -0.95%

Melrose Industries (MRO) 500.40p -0.79%

Hikma Pharmaceuticals (HIK) 2,054.00p -0.77%

Admiral Group (ADM) 2,940.00p -0.68%

British American Tobacco (BATS) 2,759.00p -0.54%

FTSE 250 - Risers

Plus500 Ltd (DI) (PLUS) 2,546.00p 4.69%

Aston Martin Lagonda Global Holdings (AML) 147.60p 3.14%

Helios Towers (HTWS) 123.60p 2.32%

Bytes Technology Group (BYIT) 487.80p 2.26%

International Workplace Group (IWG) 172.40p 2.25%

Redrow (RDW) 775.50p 1.97%

Bodycote (BOY) 656.00p 1.86%

Hammerson (HMSO) 28.66p 1.78%

Dr. Martens (DOCS) 71.70p 1.70%

Indivior (INDV) 967.00p 1.63%

FTSE 250 - Fallers

Bridgepoint Group (Reg S) (BPT) 300.60p -1.51%

Diversified Energy Company (DEC) 1,010.00p -1.46%

OSB Group (OSB) 381.60p -1.34%

Witan Inv Trust (WTAN) 268.00p -1.29%

Trustpilot Group (TRST) 193.80p -1.22%

Coats Group (COA) 100.60p -1.18%

Watches of Switzerland Group (WOSG) 387.00p -1.17%

HarbourVest Global Private Equity Limited A Shs (HVPE) 2,540.00p -1.17%

RHI Magnesita N.V. (DI) (RHIM) 3,495.00p -1.13%

Keller Group (KLR) 1,582.00p -1.13%