London noon: FTSE extends features as power shares rally; housebuilders slide

London midday: FTSE extends gains as energy shares rally; housebuilders slide

London stocks had extended gains by midday on Monday, helped along by energy shares as investors mulled the latest rate cut by the People’s Bank of China, but housebuilders slid after a profit warning from Crest Nicholson.

The FTSE 100 was up 0.6% at 7,308.19.

Earlier, the PBoC cut the one-year loan prime rate by 10 basis points to 3.45%, versus consensus expectations of a 15 basis points cut.

Meanwhile, the five-year loan prime rate – which affects mortgage prices – was unexpectedly left unchanged at 4.20%. Analysts had been expecting a 15bps cut, especially after the medium-term loan rate was reduced last week.

Russ Mould, investment director at AJ Bell, said: “Rate cuts did not go as far as anticipated but nonetheless oil and gas stocks were among the risers in London on the potential implications for demand of easier monetary policy in China.”

Looking ahead to the rest of the week, the focus will be on the Jackson Hole Symposium in Wyoming.

Mould said: “Later this week a flood of PMI data from Europe, the UK and US should provide some insight into the current economic trajectory in the West and serve as an hors d’oeuvre to the main course provided by the Jackson Hole symposium which starts at the end of the week.

“This meeting of finance ministers and central bankers will provide some insight into the thinking of the Bank of England, Federal Reserve and European Central Bank ahead of their next set of meetings this autumn.”

On home shores, the latest data from property portal Rightmove showed that house prices fell by 1.9% in August – the biggest decline this year as higher mortgage rates weighed on demand for houses.

CMC Markets analyst Michael Hewson said: “The prospect of another rate hike next month is also likely to be affecting confidence, although the fact we are in August, and in the middle of the school holidays probably also has a part to play.”

In equity markets, BP and Shell were among the top performers on the FTSE 100.

Addiction treatment specialist Indivior rallied as it announced that its US division has settled claims made by the end payor class in the Suboxone antitrust litigation. The company said it expected to pay $30m, which would be deducted from a reserved $188m for the litigation.

On the downside, housebuilder Crest Nicholson tumbled as it lowered annual profit forecasts after a worsening of the housing market amid rising inflation and interest rates.

The company said it expected annual profits to be around £50m in a “challenging” market, down from prior forecasts of £73m, but predicted a fall in interest and inflation rates over the medium term.

Other housebuilders followed suit, with Taylor Wimpey, Persimmon, Barratt Developments, Berkeley and Redrow all sharply lower.

Market Movers

FTSE 100 (UKX) 7,308.19 0.63%
FTSE 250 (MCX) 18,057.01 -0.22%
techMARK (TASX) 4,210.73 0.19%

FTSE 100 – Risers

BP (BP.) 483.95p 2.22%
Tesco (TSCO) 254.70p 2.00%
InterContinental Hotels Group (IHG) 5,944.00p 1.99%
Convatec Group (CTEC) 222.40p 1.83%
International Consolidated Airlines Group SA (CDI) (IAG) 163.55p 1.65%
JD Sports Fashion (JD.) 152.15p 1.64%
Shell (SHEL) 2,396.00p 1.53%
B&M European Value Retail S.A. (DI) (BME) 574.60p 1.52%
Pershing Square Holdings Ltd NPV (PSH) 2,942.00p 1.52%
Glencore (GLEN) 421.25p 1.25%

FTSE 100 – Fallers

Taylor Wimpey (TW.) 109.25p -2.98%
Persimmon (PSN) 995.40p -2.60%
Berkeley Group Holdings (The) (BKG) 3,899.00p -2.31%
Ocado Group (OCDO) 746.00p -1.97%
Barratt Developments (BDEV) 427.00p -1.52%
Rightmove (RMV) 540.60p -1.31%
Auto Trader Group (AUTO) 590.40p -1.27%
Prudential (PRU) 935.20p -1.25%
Hiscox Limited (DI) (HSX) 976.00p -0.91%
Flutter Entertainment (CDI) (FLTR) 13,255.00p -0.90%

FTSE 250 – Risers

TUI AG Reg Shs (DI) (TUI) 535.50p 2.98%
Indivior (INDV) 1,808.00p 2.79%
Bakkavor Group (BAKK) 102.50p 2.50%
W.A.G Payment Solutions (WPS) 87.00p 2.11%
Harbour Energy (HBR) 244.60p 1.96%
Wizz Air Holdings (WIZZ) 2,206.00p 1.61%
Syncona Limited NPV (SYNC) 140.00p 1.45%
Greencoat UK Wind (UKW) 135.90p 1.42%
Allianz Technology Trust (ATT) 252.50p 1.41%
The European Smaller Companies Trust (ESCT) 151.00p 1.34%

FTSE 250 – Fallers

Crest Nicholson Holdings (CRST) 181.90p -6.24%
Ferrexpo (FXPO) 76.20p -4.15%
Mobico Group (MCG) 75.60p -2.64%
Future (FUTR) 740.50p -2.63%
IWG (IWG) 158.10p -2.41%
CLS Holdings (CLI) 122.80p -2.38%
Synthomer (SYNT) 67.70p -2.38%
Caledonia Investments (CLDN) 3,330.00p -2.35%
Auction Technology Group (ATG) 680.00p -2.30%
SThree (STEM) 345.50p -2.26%


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