London open: Stocks in the black; house prices in focus

7th Aug 2024 08:05

(Sharecast News) - London stocks rose in early trade on Wednesday as comments from Bank of Japan governor Shinichi Uchida calmed investors, and following the release of better-than-expected UK house price data.

At 0845 BST, the FTSE 100 was up 0.8% at 8,088.91.

Sentiment got a boost after Uchida said the central bank would not lift interest rates when the markets are unstable, in response to this week's volatility that saw a massive sell-off in equities.

"I believe that the bank needs to maintain monetary easing with the current policy interest rate for the time being, with developments in financial and capital markets at home and abroad being extremely volatile," Uchida told business leaders in a speech.

He added that the BoJ's interest rate path would "obviously" change if market volatility affected its economic and price outlook, its view on risks, and the likelihood of durably achieving its 2% inflation target.

"In contrast to the process of policy interest rate hikes in Europe and the United States, Japan's economy is not in a situation where the bank may fall behind the curve if it does not raise the policy interest rate at a certain pace," Uchida said.

"Therefore, we won't raise interest rates when financial markets are unstable," Uchida said.

Stephen Innes, managing partner at SPI Asset Management, said: "His reassurance acted like a financial security blanket, calming jittery markets and effectively signalling continued protective intervention."

On home shores, investors were mulling the latest data from Halifax, which showed that house prices rose in July after three flat months.

Prices were up 0.8% on the month, coming in comfortably ahead of expectations for 0.3% growth.

On the year, house prices rose 2.3% in July following a 1.9% increase in June. This marked the highest annual growth rate since January 2024.

The average house price stood at £291,268 compared to £289,042 in June.

Amanda Bryden, head of mortgages at Halifax, said: "Last week's Bank of England's Base Rate cut, which follows recent reductions in mortgage rates, is encouraging for those looking to remortgage, purchase a first home or move along the housing ladder. However, affordability constraints and the lack of available properties continue to pose challenges for prospective homeowners.

"Against the backdrop of lower mortgage rates and potential further Base Rate reductions, we anticipate house prices to continue a modest upward trend throughout the remainder of this year."

In equity markets, banks were among the top performers, with NatWest, Barclays and Lloyds all higher.

TP Icap surged as it announced the launch of a third share buyback programme of £30m and posted a 10% jump in interim adjusted pre-tax profit.

Quilter also racked up strong gains as it reported record first-half adjusted profits.

On the downside, Coca-Cola HBC fizzed lower even as it lifted full-year guidance after a "strong" first half.

WPP was under the cosh as the advertising giant cut its full-year like-for-like revenue growth forecast. The company put this down to pressure in China and in its project-related businesses, as well as an uncertain macro environment.

Glencore lost ground as it posted a drop in half-year profits and said it will keep its coal and carbon steel business.

Hiscox fell as it reported a rise in first-half pre-tax profit despite what it described as "a more active loss environment".

Legal & General was little changed as the financial services and asset management firm posted interim operating profit that beat analyst forecasts, driven by higher annuity sales.

Market Movers

FTSE 100 (UKX) 8,088.91 0.78%

FTSE 250 (MCX) 20,489.61 0.60%

techMARK (TASX) 4,725.79 0.47%

FTSE 100 - Risers

CRH (CDI) (CRH) 6,200.00p 3.47%

Vistry Group (VTY) 1,301.00p 2.44%

NATWEST GROUP (NWG) 330.70p 2.38%

Persimmon (PSN) 1,536.50p 2.33%

Standard Chartered (STAN) 702.80p 2.30%

Lloyds Banking Group (LLOY) 56.38p 2.21%

Melrose Industries (MRO) 492.50p 2.20%

Intermediate Capital Group (ICG) 2,004.00p 1.93%

Barclays (BARC) 212.20p 1.92%

M&G (MNG) 198.85p 1.64%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 7,216.00p -2.62%

WPP (WPP) 698.80p -2.54%

Coca-Cola HBC AG (CDI) (CCH) 2,706.00p -1.24%

Smith (DS) (SMDS) 444.20p -0.27%

Glencore (GLEN) 392.25p -0.23%

easyJet (EZJ) 423.80p -0.07%

Centrica (CNA) 123.35p 0.00%

RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00%

Compass Group (CPG) 2,337.00p 0.04%

Antofagasta (ANTO) 1,822.00p 0.05%

FTSE 250 - Risers

TP Icap Group (TCAP) 235.50p 11.61%

Quilter (QLT) 132.60p 4.00%

Pacific Horizon Inv Trust (PHI) 590.00p 3.15%

International Workplace Group (IWG) 170.80p 2.58%

RHI Magnesita N.V. (DI) (RHIM) 3,580.00p 2.58%

Ocado Group (OCDO) 391.20p 2.57%

Diversified Energy Company (DEC) 1,093.00p 2.53%

Ithaca Energy (ITH) 123.40p 2.49%

Wood Group (John) (WG.) 132.00p 2.48%

Energean (ENOG) 925.00p 2.27%

FTSE 250 - Fallers

4Imprint Group (FOUR) 5,410.00p -3.74%

SDCL Energy Efficiency Income Trust (SEIT) 61.00p -2.40%

Renewi (RWI) 635.00p -2.31%

Hiscox Limited (DI) (HSX) 1,148.00p -1.80%

Assura (AGR) 41.02p -1.44%

Abrdn (ABDN) 156.55p -1.35%

Me Group International (MEGP) 185.00p -1.28%

Endeavour Mining (EDV) 1,544.00p -0.96%

Bellevue Healthcare Trust (Red) (BBH) 148.00p -0.80%

Senior (SNR) 150.00p -0.79%