London midday: Stocks maintain gains after Powell speech

(Sharecast News) - London stocks were still a little firmer by midday on Thursday, having taken their cue from a surge on Wall Street, after Fed Chair Jerome Powell suggested the pace of rate hikes might ease as soon as this month. The FTSE 100 was up 0.2% at 7,585.90.

Russ Mould, investment director at AJ Bell, said: "For the first time in an age it feels like Federal Reserve chair Jerome Powell is telling markets what they want to hear.

"The message that an easing in the pace of rate hikes could come before the end of the year was just what investors were looking for and raises the prospect of a Santa Rally heading into Christmas.

"Powell tempered his remarks with a note of caution that the fight against inflation is far from over but it's clear which part of his speech has resonated as US stocks chalked up big gains and the FTSE 100 makes a solid start on Thursday.

"Whether the optimism will be sustained could be determined as soon as tomorrow when new US jobs data is released. Continuing tightness in the labour market is a key reason why the Fed is taking a tough stance on rates and any sign of that easing would be another catalyst for shares. Before that we will get the latest reading from the Fed's preferred measure of inflation."

On home shores, the latest survey from Nationwide showed that house prices fell in November as the fallout from the government's disastrous mini-budget continued to reverberate.

According to the latest Nationwide House Price Index, prices fell by 1.4% month-on-month in November, the biggest decline since June 2020. In October, they eased 0.9%.

On an annual basis, UK house price growth was 4.4% last month, sharply down on October's 7.2% increase. The average price of a house in the UK is now £263,788.

The 23 September mini-budget - which included large, unfunded tax cuts but no spending plans or economic forecasts -sparked turmoil across markets, sending mortgage rates sharply higher and lending to the temporary withdrawal of some offers.

Robert Gardner, chief economist at Nationwide, said: "The fallout from the mini-budget continued to impact the market.

"While financial market conditions have stabilised, interest rates for new mortgages remain elevated and the market has lost a significant degree of momentum. Housing affordability for potential buyers and home movers has become much more stretched at a time when household finances are already under pressure from high inflation."

Elsewhere, data from retail consultancy Springboard showed that retail footfall sparked in November, boosted by Black Friday, although it remains well below pre-pandemic levels.

In equity markets, AJ Bell gained as it reported a jump in revenues and profits despite a "challenging" year for markets.

Components maker Essentra rose after saying it had bought Wixroyd Group, a UK supplier of industrial parts for the engineering sector, for an initial £29.5m with a further £7m potentially payable on a deferred earn-out basis.

Darktrace rallied after an initiation at 'buy' by Redburn.

On the downside, educational publisher Pearson was knocked lower by a downgrade to 'neutral' at Exane.

Ninety One and Telecom Plus were in the red as they traded without entitlement to the dividend, while Auction Technology slumped after full-year results.

Market Movers

FTSE 100 (UKX) 7,585.90 0.17%

FTSE 250 (MCX) 19,372.15 1.09% techMARK (TASX) 4,416.84 0.52%

FTSE 100 - Risers

Intermediate Capital Group (ICP) 1,267.50p 6.20% Ocado Group (OCDO) 657.80p 5.65% Schroders (SDR) 462.20p 4.48% SEGRO (SGRO) 825.20p 4.35% Prudential (PRU) 1,021.50p 4.30% Auto Trader Group (AUTO) 585.40p 3.46% Dechra Pharmaceuticals (DPH) 2,810.00p 3.31% Croda International (CRDA) 7,014.00p 3.24% Hargreaves Lansdown (HL.) 866.40p 2.70% Halma (HLMA) 2,230.00p 2.67%

FTSE 100 - Fallers

Pearson (PSON) 950.60p -4.48% Standard Chartered (STAN) 596.60p -3.37% Rolls-Royce Holdings (RR.) 88.11p -3.09% Anglo American (AAL) 3,313.50p -2.76% Shell (SHEL) 2,403.50p -1.66% HSBC Holdings (HSBA) 502.10p -1.49% BP (BP.) 491.35p -1.24% 3i Group (III) 1,333.00p -1.15% Glencore (GLEN) 558.00p -0.98% Burberry Group (BRBY) 2,160.00p -0.78%

FTSE 250 - Risers

Molten Ventures (GROW) 423.40p 8.56% Bridgepoint Group (Reg S) (BPT) 211.20p 7.48% Future (FUTR) 1,498.00p 6.62% ASOS (ASC) 672.50p 6.49% Diploma (DPLM) 2,938.00p 4.93% Man Group (EMG) 217.80p 4.21% Darktrace (DARK) 355.30p 4.19% Essentra (ESNT) 254.00p 4.10% Aston Martin Lagonda Global Holdings (AML) 136.10p 4.01% Jupiter Fund Management (JUP) 128.60p 3.88%

FTSE 250 - Fallers

Auction Technology Group (ATG) 754.00p -12.02% Ninety One (N91) 193.40p -3.88% Investec (INVP) 499.00p -3.71% Currys (CURY) 75.10p -3.41% Home Reit (HOME) 49.00p -3.16% Quilter (QLT) 98.94p -2.43% CLS Holdings (CLI) 158.20p -2.35% Bellway (BWY) 1,959.50p -2.32% Petrofac Ltd. (PFC) 82.10p -2.15% Hammerson (HMSO) 23.58p -2.08%