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London open: Stocks edge lower ahead of central bank meetings
London stocks edged lower in early trade on Monday ahead of a key week for central bank meetings.
At 0830 GMT, the FTSE 100 was down 0.3% at 7,532.75.
Richard Hunter, head of markets at Interactive Investor, said: “This week will herald a raft of economic data, as the Federal Reserve, ECB and Bank of England all reveal their latest interest rate decisions, while there is also an important update due on the latest US inflation picture, as well as UK GDP and US retail sales.
“The Fed’s interest rate decision and accompanying comments will be of particular interest to investors, especially given the recent rally in stocks on optimism of an end to the hiking cycle and the gradual move towards monetary easing.”
The Fed will make its latest policy announcement on Wednesday, followed by the Bank of England and the European Central Bank on Thursday.
Earlier on Monday, the latest data from Rightmove revealed that the housing market showed tentative signs of stabilising in December despite a further slide in house prices.
According to the Rightmove house price index, house prices fell by 1.9% this month. Prices normally dip in December, due to seasonal factors, but this year’s fall was more than the previous 20-year average of a 1.5% decline.
Year-on-year, prices were just 1.1% lower, however.
The average asking price is now £355,177.
Rightmove said sellers were becoming more competitive with pricing as they looked to get homes sold in a “challenging” market.
But it also noted signs of more stable market conditions, as the market slowly shifted from “frenzy to normality”, which should see more family movers returns. Many families shelved plans to move to bigger homes after last year’s disastrous mini-budget sent mortgage rates soaring.
The number of agreed sales was down 13% on the same period last year, which Rightmove said was better-than-expected given that the 2022 market was “much more frenetic”.
Tim Bannister, director of property science at Rightmove, said: “We entered this year under a cloud of uncertainty, as the fallout from the autumn mini-budget filtered through to lower activity levels.
“High mortgage rates, which have added to already-stretched buyer affordability, have been a challenge throughout 2023, and this is likely to carry into next year.
“However, for now there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1% in asking prices highlights the market’s much better-than-predicted resilience this year.”
Average mortgage rates have been falling for the last four months, with the average 5-year fixed mortgage rate now 5.11%, compared to 6.11% in July.
In equity markets, heavily-weighted miners were the worst performers on the top-flight index, with Anglo American, Glencore, Rio Tinto and Antofagasta all lower.
On the upside, Rolls-Royce rallied after Citigroup lifted its price target on the stock following the engine maker’s capital markets day.
Elsewhere, Domino’s Pizza ticked higher as it backed its full-year earnings guidance ahead of an investor event.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rolls-royce Holdings Plc | +2.25% | +6.50 | 295.80 |
| 2 |  |
Smurfit Kappa Group Plc | +0.72% | +22.00 | 3,060.00 |
| 3 |  |
Itv Plc | +0.66% | +0.40 | 61.30 |
| 4 |  |
Ferguson Plc | +0.63% | +90.00 | 14,390.00 |
| 5 |  |
Associated British Foods Plc | +0.62% | +15.00 | 2,437.00 |
| 6 |  |
Anglo American Plc | +0.61% | +11.00 | 1,813.60 |
| 7 |  |
Dcc Plc | +0.58% | +32.00 | 5,552.00 |
| 8 |  |
Barratt Developments Plc | +0.56% | +3.00 | 539.60 |
| 9 |  |
Intercontinental Hotels Group Plc | +0.56% | +38.00 | 6,868.00 |
| 10 |  |
Crh Plc | +0.47% | +24.00 | 5,164.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Centrica Plc | -2.41% | -3.60 | 145.85 |
| 2 |  |
Glencore Plc | -1.90% | -8.70 | 448.70 |
| 3 |  |
Rio Tinto Plc | -1.43% | -80.00 | 5,503.00 |
| 4 |  |
British American Tobacco Plc | -1.42% | -33.00 | 2,283.50 |
| 5 |  |
Severn Trent Plc | -1.36% | -37.00 | 2,677.00 |
| 6 |  |
Lloyds Banking Group Plc | -1.28% | -0.59 | 45.74 |
| 7 |  |
Bhp Group Limited | -1.14% | -28.50 | 2,464.50 |
| 8 |  |
St. James’s Place Plc | -1.11% | -7.80 | 691.80 |
| 9 |  |
Smith (ds) Plc | -1.09% | -3.30 | 299.70 |
| 10 |  |
International Consolidated Airlines Group S.a. | -1.07% | -1.70 | 156.70 |
Monday newspaper round-up: US multinationals, London listings, interest rates
US multinationals underpaid £5.6bn in tax in the UK last year, HM Revenue & Customs believes, according to a national accountancy firm. The suspected deficit is 14% higher than the figure from the previous year, and would mean US companies now make up nearly half of underpaid tax into British coffers from foreign companies. – Guardian
Consumers will pay more for less this Christmas, economists have warned, getting less of a bang for their buck than the faint phutting of a puny, overpriced cracker being pulled. Although Britons will spend more than in the belt-tightening 2022 festive season, the resultant fare won’t yet match the pre-pandemic Christmases past. – Guardian
Applications to list on the London Stock Exchange (LSE) have plunged this year despite efforts to revive the City. The number of requests to float on the main market of the LSE has slumped to its lowest level in at least six years, according to data from the Financial Conduct Authority (FCA). The figures come as the City struggles to recruit and retain high-profile companies, leaving executives and policymakers grappling with how to arrest the Square Mile’s decline. – Telegraph
The Bank of England will not cut interest rates until 2026, according to projections from the CBI, which predicts sluggish economic growth for the next three years. In its latest outlook on the UK economy, the CBI said the base rate will stay at 5.25 per cent for at least two more years, despite rising market speculation that rates will be cut next year. The forecast is based on projections showing that consumer price inflation will not reach the Bank’s 2 per cent target until the third quarter of 2025. – The Times
The scale of the crisis in the lettings sector, as tenants have been hit in the pocket by landlords raising the rent, selling up, failing to invest or turning properties into holiday lets, is revealed in data from Hamptons. The rises have been so steep that the estate agency calculates the amount of rent paid by British tenants this year will be £85.6 billion, which is more than twice the amount in 2010 (£40.3 billion) and £8 billion more than last year. – The Times
