London open: FTSE edges higher ahead of Fed; Nationwide data in focus

(Sharecast News) - London stocks edged up in early trade on Wednesday as investors eyed the latest UK manufacturing data and a policy announcement from the US Federal Reserve. At 0840 BST, the FTSE 100 was up 0.2% at 8,156.00.

Danske Bank said: "Today's main event will be the FOMC meeting, where we and the markets expect no changes to the Fed's policy rate.

"With no new economic projections, focus will be on Powell's verbal guidance as well as on any hints on the Fed's plans to taper the pace of QT."

On home shores, figures released by Nationwide earlier showed that house prices unexpectedly fell in April for the second month in a row, as borrowing rates went up.

House prices fell 0.4% on the month following a 0.2% decline in March. Economists were expecting a 0.2% increase.

On the year, house price growth slowed to 0.6% in April from 1.6% the month before.

The average house price stood at £261,962 last month, versus £261,142 in March.

Nationwide chief economist Robert Gardner said: "The slowdown likely reflects ongoing affordability pressures, with longer term interest rates rising in recent months, reversing the steep fall seen around the turn of the year.

"House prices are now around 4% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects."

Imogen Pattison, assistant economist at Capital Economics, said the second consecutive decline in the Nationwide house price index in April confirms that the rise in mortgage rates since the start of the year will prevent further near-term price gains.

"But as we expect Bank Rate to fall more than most expect this year, the drop in mortgage rates further ahead will mean house prices are likely to start rising again," she added.

Pattison said the 0.4% monthly fall reflects the likely tick up in the average quoted mortgage rate from 4.7% in March to 4.8% in April, as higher financial market interest rates maintained upward pressure on mortgage rates.

"In the coming months, we suspect mortgage rates will hover around their April level, keeping demand subdued. We expect that will prevent renewed gains in house prices in the near term. But if we are right to think that Bank Rate will be cut further than most expect this year, mortgage rates should fall to just over 4% by end-2024, leaving house prices up 3% y/y," she said.

Still to come, the S&P Global/CIPS manufacturing PMI for April is due at 0930 BST.

In equity markets, Smith & Nephew shot higher as it reported a 2.9% year-on-year rise in first-quarter sales to $1.39bn, as its orthopaedics business continued to recover.

GSK rose as the pharmaceutical giant lifted annual profits guidance, pinning its hopes on demand for its respiratory virus and shingles treatments.

On the downside, Haleon slumped as the healthcare company's first-quarter revenue missed expectations.

Fashion retailer Next was in the red as it said first-quarter sales came in ahead of forecasts and held guidance for the full year but warned that the next three months would be weaker due to wet spring weather.

Computacenter lost ground as it warned on first-half profits, citing strong prior-year comparatives and challenging UK markets.

Luxury carmaker Aston Martin Lagonda fell after saying it saw a double-digit drop in revenues and adjusted profits in the first quarter, but that the launch of four new models should drive "significant growth" in the second half and beyond.

Market Movers

FTSE 100 (UKX) 8,156.00 0.15% FTSE 250 (MCX) 19,916.34 -0.25% techMARK (TASX) 4,589.11 -0.02%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,004.50p 2.60% Airtel Africa (AAF) 113.40p 2.25% Anglo American (AAL) 2,691.50p 2.18% Fresnillo (FRES) 569.50p 2.06% Reckitt Benckiser Group (RKT) 4,542.00p 1.66% Pershing Square Holdings Ltd NPV (PSH) 3,998.00p 1.37% Croda International (CRDA) 4,669.00p 1.28% NATWEST GROUP (NWG) 307.00p 1.15% Glencore (GLEN) 473.05p 1.14% AstraZeneca (AZN) 12,194.00p 1.09%

FTSE 100 - Fallers

Haleon (HLN) 332.90p -1.94% Ashtead Group (AHT) 5,746.00p -1.64% Scottish Mortgage Inv Trust (SMT) 829.80p -1.52% Next (NXT) 8,880.00p -1.42% Flutter Entertainment (DI) (FLTR) 14,720.00p -1.37% M&G (MNG) 199.05p -1.02% London Stock Exchange Group (LSEG) 8,758.00p -0.99% Beazley (BEZ) 656.50p -0.98% Ocado Group (OCDO) 349.80p -0.93% JD Sports Fashion (JD.) 114.55p -0.91%

FTSE 250 - Risers

Travis Perkins (TPK) 782.00p 3.85% Ninety One (N91) 175.00p 3.73% Victrex plc (VCT) 1,296.00p 2.37% Discoverie Group (DSCV) 721.00p 2.27% Kier Group (KIE) 137.20p 2.24% Greggs (GRG) 2,774.00p 1.84% Foresight Solar Fund Limited (FSFL) 89.50p 1.82% Diversified Energy Company (DEC) 1,141.00p 1.33% Coats Group (COA) 82.50p 1.23% Pennon Group (PNN) 673.50p 1.20%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 137.00p -7.56% Helios Towers (HTWS) 95.20p -3.64% Tritax Eurobox (GBP) (EBOX) 53.50p -3.60% Dr. Martens (DOCS) 73.50p -3.29% Genus (GNS) 1,752.00p -2.88% W.A.G Payment Solutions (WPS) 63.00p -2.48% Grafton Group Ut (CDI) (GFTU) 924.40p -2.35% JPMorgan Emerging Markets Inv Trust (JMG) 102.20p -2.29% Tate & Lyle (TATE) 644.50p -2.20% Indivior (INDV) 1,412.00p -2.08%