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London open: Stocks nudge lower amid Middle East woes; house prices tick up
London stocks nudged lower in early trade on Monday, with investors remaining cautious as the conflict in the Middle East escalated, although there was some good news on house prices.
At 0900 BST, the FTSE 100 was down 0.1% at 8,275.69.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “It’s been a lacklustre start to the week for the FTSE 100, which has been flat in early trade. War in the Middle East is understandably playing on minds. The threat of a further escalation is keeping upwards pressure on oil prices. On the first anniversary of Hamas attacks, which sparked the war in Gaza, there still appears no end in sight for the conflict, which still risks spreading further across the region.
“Brent Crude has gained ground again, trading above $78 dollars a barrel, following the largest weekly rise in over a year. Supply worries continue to swirl, even though OPEC+ nations have signalled they will go ahead with planned production increases. The perceived strength of the US economy is leading to expectations that there will be greater demand for energy across the US, helping offset continued weakness across sectors in China.”
On home shores, figures released earlier by Halifax showed that house prices rose in September for the third month in a row and were close to record highs amid cheaper mortgage rates.
Prices rose 0.3% on the month, matching the increase seen in August. On the year, house prices were up 4.7% in September following a 4.3% jump the month before. This was still the strongest rate since November 2022.
The average price of a home stood at £293,399 – just shy of the record high of £293,507 set in June 2022 – versus £292,540 in August.
Amanda Bryden, head of Mortgages at Halifax, said it was essential to view the recent gains in context.
“While the typical property value has risen by around £13,000 over the past year, this increase is largely a recovery of the ground lost over the previous 12 months. Looking back two years, prices have increased by just +0.4% (£1,202),” she said.
“Market conditions have steadily improved over the summer and into early autumn. Mortgage affordability has been easing thanks to strong wage growth and falling interest rates. This has boosted confidence among potential buyers, with the number of mortgages agreed up over 40% in the last year and now at their highest level since July 2022.
“While improved mortgage affordability should continue to support buyer activity – boosted by anticipated further cuts to interest rates – housing costs remain a challenge for many. As a result we expect property price growth over the rest of this year and into next to remain modest.”
In equity markets, precious metals miners lost their shine as gold prices fell, with Fresnillo, Endeavour Mining and Hochschild all lower.
Rio Tinto was in focus as the miner confirmed speculation that it has approached Philadelphia-based lithium chemicals producer Arcadium Lithium regarding a possible takeover. “The approach is non-binding and there is no certainty that any transaction will be agreed to or will proceed,” Rio Tinto said.
Mitie Group edged lower after saying it had bought Spanish security business Grupo Visegurity for up to €11m (£9.2m), comprising an initial payment of €9m and performance-linked deferred payments of up to €2m over the next two years.
Shell was a touch higher even as it reported a sharp drop in third-quarter refining profit margins.
BP was also in the spotlight following a Reuters report the oil giant has abandoned a target to cut oil and gas output by 2030 as chief executive Murray Auchincloss scales back the firm’s energy transition strategy to regain investor confidence.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Natwest Group Plc | +1.84% | +6.30 | 348.80 |
| 2 |  |
Aib Group Plc | +1.71% | +7.00 | 416.50 |
| 3 |  |
Banco Santander S.a. | +1.48% | +5.50 | 378.00 |
| 4 |  |
Ferguson Enterprises Inc. | +1.16% | +170.00 | 14,770.00 |
| 5 |  |
Shell Plc | +1.16% | +30.00 | 2,607.50 |
| 6 |  |
Gsk Plc | +1.10% | +16.00 | 1,475.50 |
| 7 |  |
Bp Plc | +1.02% | +4.25 | 421.10 |
| 8 |  |
Standard Chartered Plc | +0.99% | +8.20 | 836.20 |
| 9 |  |
Diploma Plc | +0.95% | +40.00 | 4,248.00 |
| 10 |  |
Gen.acc.8se.pf | +0.89% | +1.25 | 141.25 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bp 9% 2nd Prf | -3.92% | -6.50 | 159.50 |
| 2 |  |
Centrica Plc | -2.33% | -2.75 | 115.45 |
| 3 |  |
Wheaton Precious Metals Corp. | -1.92% | -90.00 | 4,600.00 |
| 4 |  |
Melrose Industries Plc | -1.72% | -7.90 | 452.10 |
| 5 |  |
Rentokil Initial Plc | -1.62% | -5.90 | 358.30 |
| 6 |  |
Jd Sports Fashion Plc | -1.33% | -1.85 | 136.80 |
| 7 |  |
Taylor Wimpey Plc | -1.30% | -2.15 | 163.65 |
| 8 |  |
Haleon Plc | -1.27% | -4.90 | 381.70 |
| 9 |  |
Halma Plc | -1.18% | -30.00 | 2,523.00 |
| 10 |  |
Hammerson Plc | -1.16% | -3.60 | 306.20 |
US close: Stocks surge, Dow sets new record after non-farm payrolls beat
US stocks finished with strong gains on Friday, with the Dow once again reaching a record high, on the back of a bumper employment report which showed that the American economy added significantly more jobs than expected in September.
The data also revealed that unemployment rate unexpectedly fell, dashing any expectations of a potential 50 basis points rate cut by the Federal Reserve next month. The data gave stocks a boost as investors temporarily shrugged off escalating tensions in the Middle East which have weighed heavily on market sentiment over recent days.
“This positive employment report led to an increase in US stock prices, Treasury yields and the greenback as investors reacted favourably to the news,” said Axel Rudolph, senior technical analyst at IG. “These encouraging economic indicators helped alleviate concerns about a potential slowdown in the US economy and reinforced confidence in the Federal Reserve’s ability to achieve a ‘soft landing’ for the economy. ”
The Dow finished the day up 0.8% at a new high of 42,352.75, while the S&P 500 rose 0.9% to 5,751.07, just shy of last week’s record close of 5,762.48. The Nasdaq, meanwhile, gained 1.2% to 18,137.85.
According to figures from the Labor Department, total non-farm payrolls rose by 254,000 from August, versus expectations for a 140,000 increase. The figure for August was revised up to a 159,000 gain from 142,000.
The unemployment rate fell to 4.1% in September from 4.2% the month before, surprising economists who had expected no change. The data also showed that annual wage growth ticked up to 4% from 3.9% in August.
“The September employment report was positive across the board, reducing the downside risks to the labor market and increasing our conviction that the Federal Reserve will only cut the target range for the fed funds rate by 25bps in November,” said Ryan Sweet, chief US economist at Oxford Economics.
Market movers
Spirit Airlines shares plunged 25% following a Wall Street Journal report which claimed the low-cost carrier was mulling over filing for bankruptcy.
The company has been attempting to restructure its balance sheet and $3.3bn debt pile following the failed $3.8bn merger with JetBlue Airways earlier this year, after it was blocked on competition concerns. Shares in JetBlue jumped 14% on the news.
Electric vehicle manufacturer Rivian traded 3% lower after cutting its full-year production guidance by 8,000 to 10,000 units.
Coeur Mining dropped 9% on the news it has agreed to buy Canada’s SilverCrest Metals in a $1.7bn deal. The US miner said the deal would create a leading global silver company producing around 21m oz of silver annually.
Shipping stocks worldwide, including US-listed ZIM Integrated Shipping Services, tanked after the resolution of the Los Angeles port workers’ strike, which has quashed the prospect of higher freight rates.
Monday newspaper round-up: Retailers, Telegraph, pension funds
More than 70 retailers, including Tesco, Marks & Spencer and Ikea, are lobbying the chancellor, Rachel Reeves, for a 20% cut to business rates, warning that the property tax could force tens of thousands of shops to shut. In a letter to Reeves coordinated by the British Retail Consortium (BRC), executives are pushing the Treasury to introduce a “retail rates corrector” on the levy, which is a property-based tax charged by local councils and imposed on businesses including retailers, pubs, factories and company offices. – Guardian
The UK steel industry has called for the government to consider further protectionist trade measures as it braces for a flood of imported steel amid a global glut driven by China. UK Steel, a lobby group, said the global industry has 543m tonnes of excess steel, 70 times more than the UK uses each year, in analysis published on Monday. It said the UK faces a “cliff edge” in 2026 when current protections run out. – Guardian
The owner of US news website The New York Sun is nearing a deal to buy The Telegraph for more than £550m. Dovid Efune is poised to enter exclusive talks with RedBird IMI to become proprietor in the coming days. Discussions are understood to be at an advanced stage, according to deal insiders. RedBird IMI, which is running the sale process, declined to comment. – Telegraph
An alliance of dozens of the biggest pension funds in Britain has renewed its attack on the London Stock Exchange, warning that it should not be pushing to weaken boardroom standards in listed companies any further. Council pension schemes with assets of £350 billion have repeatedly called on Don Robert, chairman of the parent London Stock Exchange Group, to justify claims that the old listing rules were damaging London. – The Times
A Vietnamese airline that is facing a compensation bill of up to $250 million in a High Court dispute over aircraft leases with a London-based investment firm has won the right to appeal. The dispute is between Vietjet, a private sector airline with ambitions to fly to London, and FitzWalter Capital Limited (FWC), a private investment firm with investments in the aircraft leasing sector. – The Times
