London open: Stocks nudge lower as investors eye rate announcements

16th Sep 2024 08:02

(Sharecast News) - London stocks nudged lower in early trade on Monday ahead of a busy week that includes rate announcements from the Bank of England, the US Federal Reserve and the Bank of Japan.

At 0830 BST, the FTSE 100 was down 0.1% at 8,265.45.

Richard Hunter, head of markets at Interactive Investor, said: "Global interest rate decisions take centre stage this week, with the most intriguing meeting likely to come from the Federal Reserve announcement on Wednesday.

"That there will be a cut from the Fed is now without question, but the scale of the reduction remains under intense debate. The current economic data does not necessarily point to anything beyond a 0.25% cut, but traders are now pricing in an equal likelihood of a more aggressive 0.5% move. The dial has moved slightly in anticipating that the Fed could make a statement move as it begins its easing cycle, and such an outcome would certainly allay any concerns of the central bank having fallen behind the curve. Whatever the outcome, the market is still pricing in 1% of cuts in total by the end of this year, which could take some of the sting from Wednesday's announcement."

As far as the BoE is concerned, no change to rates is expected following last month's cut.

"There may be some interest arising from both retail sales and inflation data, however, potentially to throw some light on the MPC's next move, which is currently not expected to come into force until November at the earliest," Hunter said.

Investors were mulling industry research released earlier, which showed the UK housing market strengthened in September, as prices ticked higher and the number of agreed sales jumped.

According to the latest house price index from Rightmove, average new seller asking prices rose 0.8% this month, double the long-term average. Year-on-year, prices rose 1.2%.

The national average asking price is now £370,759.

The number of agreed sales also rose in September, jumping 27%, while the amount of new sellers increased by 14% year-on-year.

The average number of available homes for sale per estate agent is now its highest since 2014.

Autumn is traditionally a busy period in the housing market, but Rightmove said it appeared to have started early this year.

Tim Bannister, director of property science, said there had been a "strong rebound in activity from both buyers and sellers compared to the subdued market at this time last year, continuing the momentum from the better-than-expected summer market".

"The certainty of a new government followed by the first Bank Rate cut in four years invigorated the market, opening a window of opportunity for movers to act," he added.

However, he also sounded a note of caution: "Windows of opportunity tend to need a momentum of good news to stay open, and there are still uncertainties ahead which would cause some of the current market activity to ease."

In particular, Rightmove flagged mortgage rates still being high, despite recent falls, and the upcoming Budget on 30 October.

In equity markets, pensions, savings and life insurance provider Phoenix Group fell as it reported a 15% increase in operating profits in the first half and reiterated its medium-term targets for earnings and cash generation.

The company also announced it was pulling the disposal of its SunLife division, which sells financial products to the over-50s, just three months after putting it up for sale given "current uncertainty in the protection market".

Close Brothers fell after the merchant bank said that chief executive Adrian Sainsbury has taken a temporary medical leave of absence from the business. Group finance director Mike Morgan will assume Sainsbury's principal responsibilities, supported by chairman Mike Biggs and members of the senior management team.

On the upside, TI Fluid Systems surged after auto parts engineer ABC Technologies confirmed it had made two approaches for the company that were rejected over the past month but said it was still interested in a deal and was "considering its position".

ABC made an initial proposal of 165p a share on August 22 and a revised 176p-a-share offer on September 4 - a 20.7% premium to TI Fluid's closing price on September 13.

In response TI Fluid said the bid "significantly undervalued" the company and its prospects.

Playtech also rallied after the gambling technology maker said annual adjusted earnings would be slightly ahead of expectations, driven by its business-to-business (B2B) division.

Marks & Spencer rose after RBC Capital Markets lifted its price target on the shares to 400p from 350p and raised estimates. It maintained an 'outperform' rating.

Market Movers

FTSE 100 (UKX) 8,265.45 -0.09%

FTSE 250 (MCX) 20,875.19 -0.10%

techMARK (TASX) 4,884.76 -0.19%

FTSE 100 - Risers

Sainsbury (J) (SBRY) 293.00p 1.10%

AstraZeneca (AZN) 12,054.00p 1.06%

Marks & Spencer Group (MKS) 354.90p 1.05%

Auto Trader Group (AUTO) 878.20p 0.71%

Tesco (TSCO) 367.00p 0.69%

Diageo (DGE) 2,486.50p 0.67%

Haleon (HLN) 395.70p 0.66%

Compass Group (CPG) 2,452.00p 0.66%

Croda International (CRDA) 4,029.00p 0.60%

Darktrace (DARK) 587.80p 0.58%

FTSE 100 - Fallers

Phoenix Group Holdings (PHNX) 564.00p -2.17%

Smurfit Westrock (DI) (SWR) 3,400.00p -2.07%

Prudential (PRU) 613.20p -1.73%

Melrose Industries (MRO) 471.40p -1.69%

Entain (ENT) 723.80p -1.47%

Antofagasta (ANTO) 1,730.50p -1.20%

easyJet (EZJ) 485.70p -1.08%

Rolls-Royce Holdings (RR.) 496.30p -0.98%

Rio Tinto (RIO) 4,711.00p -0.97%

Beazley (BEZ) 766.50p -0.90%

FTSE 250 - Risers

TI Fluid Systems (TIFS) 167.60p 14.95%

Playtech (PTEC) 708.00p 8.26%

Moonpig Group (MOON) 210.50p 2.93%

RS Group (RS1) 799.50p 2.70%

JPMorgan Japanese Inv Trust (JFJ) 545.00p 1.49%

Volution Group (FAN) 550.00p 1.48%

TBC Bank Group (TBCG) 2,860.00p 1.24%

4Imprint Group (FOUR) 5,020.00p 1.21%

Murray International Trust (MYI) 256.50p 1.18%

RIT Capital Partners (RCP) 1,832.00p 1.10%

FTSE 250 - Fallers

Spirent Communications (SPT) 169.10p -2.82%

Impax Environmental Markets (IEM) 371.00p -2.75%

Baltic Classifieds Group (BCG) 279.50p -2.44%

Dunelm Group (DNLM) 1,203.00p -2.35%

Bytes Technology Group (BYIT) 448.60p -2.01%

SDCL Energy Efficiency Income Trust (SEIT) 62.90p -1.87%

Wetherspoon (J.D.) (JDW) 698.00p -1.83%

The Global Smaller Companies Trust (GSCT) 162.00p -1.82%

Edinburgh Worldwide Inv Trust (EWI) 146.40p -1.74%

JPMorgan Emerging Markets Inv Trust (JMG) 105.00p -1.69%