London close: Stocks finish higher as sterling falls back

(Sharecast News) - London stocks managed a positive finish on Monday as investors looked towards chancellor Jeremy Hunt's fiscal statement later in the week, with Informa maintaining its earlier gains after a guidance upgrade. The FTSE 100 ended the session up 0.92% at 7,385.17, and the FTSE 250 was ahead 0.03% at 19,622.25.

Sterling was meanwhile in the red, and was last down 0.74% on the dollar at $1.1743, as it lost 0.76% against the euro to trade at €1.1352.

"Sterling-watchers have their work cut out for them this week," quipped IG chief market analyst Chris Beauchamp.

"Normally unemployment data, inflation figures and retail sales would be enough to keep track of, but the fiscal statement this week adds spice to the pound's outlook.

"Barring some remarkable surprises, this week is not likely to be overflowing with good news for the UK economy."

In economic news, UK house prices fell last month according to an industry survey, as sellers rushed to secure deals against a backdrop of mounting financial uncertainty.

The latest Rightmove house price index showed house prices falling 1.1% in November, taking the average asking price to £366,999.

That compared to a 0.9% rise the month before, while year-on-year, house prices grew by 7.2%, compared to annual growth of 7.8% in October.

November traditionally sees buyers price more competitively, as they look to offload properties ahead of Christmas.

Rightmove said this year's fall was in line with the average November declines seen during the pre-pandemic years of 2015 to 2019.

A total of 8% of unsold properties cut prices in October, double the amount at the same time last year, but largely in line with the 7.5% in the same month in 2019.

Rightmove also acknowledged that the market was facing considerable "financial uncertainty", however.

"The plethora of predictions about what might happen to prices next year comes at a time when much is still uncertain," said Tim Bannister, director of property science.

"But what is certain is that the exceptional price growth of the last two years is unsustainable against economic headwinds and growing affordability constraints."

Elsewhere, UK retail footfall rose just 1.3% week-on-week in the seven days ended 12 November, indicating "consumer nervousness" in the midst of the cost-of-living crisis and rising interest rates.

According to retail experts Springboard, footfall dropped on Sunday and Monday, down an average of 9.4%, but rose 1.9% between Tuesday and Friday.

Footfall rose 5% on Wednesday, indicating that it was Britons' preferred day to head into the office.

It was up 2.1% in high streets, 0.9% in shopping centres and remained flat from the week before in retail parks.

Wales recorded a decline of 2.6% in high streets and 14.6% in shopping centres, while Northern Ireland had a 10.7% drop in high street footfall.

Overall footfall was said to be just 5% above 2021's level, while the gap from 2019 widened to -11.1% from -9.8% in the week before last.

UK business confidence meanwhile tumbled to its lowest level since 2009 according to a survey, with the latest Accenture S&P Global UK business outlook bringing a headline index that fell 10%, with a net balance of just 18% of surveyed firms now expecting activity to increase over the next 12 months.

That compared to net balances of 28% in June, and 56% in February.

Inflationary pressures remained severe, with 80% of firms expecting to increase salaries in response to the cost-of-living crisis and tight labour market.

Selling prices were also forecast to rise sharply, although not quickly enough to offset a negative outlook for profits.

In total, a balance of -13% of firms were forecasting lower earnings over the next year.

Employment was still expected to rise, however, although hiring intentions were now at a two-year low.

"As we head towards what is likely to be a tough winter for the UK economy, business confidence has understandably been shaken," said Simon Eaves, market unit lead for Accenture in the UK and Ireland.

"However, many British companies continue to demonstrate resilience in the face of economic difficulties - hiring plans remain positive, and overall optimism, while muted, is higher than of our European counterparts."

On the continent, eurozone industrial production rose more than expected in September according to figures released by Eurostat.

Industrial output grew 0.9% on the month following an upwardly-revised 2.0% increase in August.

That was comfortably ahead of expectations for a 0.3% jump.

The production of non-durable consumer goods rose by 3.6% and capital goods by 1.5%, while the production of intermediate goods and durable consumer goods fell by 0.9%, and energy by 1.1%.

In energy markets, Opec trimmed its forecasts for global oil demand earlier as the outlook for the economy darkened.

Publishing its latest monthly report, the oil cartel forecast that global demand for oil would grow by 2.55 million barrels per day in 2022 - 100,000 barrels per day lower than its previous forecast.

It also reduced forecasts for growth in 2023 by 100,000 barrels per day, to 2.24 million daily barrels.

"The world economy has entered a period of significant uncertainty and rising challenges in the fourth quarter," Opec said in its statement.

"Downside risks including high inflation, monetary tightening by major central banks, high sovereign debt levels in many regions, tightening labour markets and persisting supply constraints."

Finally in global news, Beijing reportedly moved to shore up the country's ailing real estate sector during Asian hours overnight, sending property stocks soaring.

According to multiple reports from the likes of the Financial Times and Reuters, the People's Bank of China and the China Banking and Insurance Regulatory Commission had written to financial institutions outlining 16 specific steps intended to support the sector.

They were understood to include allowing real estate firms to defer repayment of some loans, while trust companies were instructed to provide financing on projects such as rental housing construction and for mergers and acquisitions, Reuters noted.

Most importantly, a looming end-of-year deadline for lenders to cap their ratios of property sector loans was apparently extended for an as-yet unspecified time.

On London's equity markets, Informa closed up 5.75% after the events organiser lifted its full-year guidance, pointing to an improvement in demand.

The company was now expecting full-year revenue of between £2.3bn and £2.35bn, and adjusted operating profit of £490m to £505m.

Previously, it was guiding for revenues of £2.15bn to £2.25bn and adjusted operating profit of between £470m and £490m.

"The post-pandemic return to physical events has helped spur growth for Informa with business-to-business demand and academic markets enjoying impressive growth," said Victoria Scholar, head of investment at Interactive Investor.

"It continues to target the US as a key growth area with the completion of its US data business acquisition Industry Dive.

"Informa also continued to return cash to shareholders with over £450m of its £725m share buyback programme now completed and the resumption of its ordinary dividend."

Scholar said shares in Informa were outperforming the market this year, gaining almost 10% in the year-to-date, and enjoyed "particularly strong gains" in Monday's session.

Elsewhere, IT provider Kainos gained 2.99% after it posted a jump in first-half profit and revenue amid strong underlying demand.

Beazley was in the black by 4.2% after RBC Capital Markets reiterated its 'outperform' rating on the shares and lifted the price target to 775p from 675p.

On the downside, Mike Ashley's Frasers Group slipped 0.44% following reports the company was close to agreeing a deal to buy Savile Row tailor Gieves & Hawkes.

Harbour Energy was under pressure, falling 9.63% by the end of the day, with CMC Markets analyst Michael Hewson pointing to reports that a higher windfall tax could be brought in later in the week by Jeremy Hunt.

"This would see the tax increased from 25% to 35%, as well as extending the tax from 2026 to 2028," he said.

"If implemented this would increase the effective tax rate for UK profits from 65% to 75%, which the likes of BP and Shell would probably be able to absorb better due to their global footprint, but would be increasingly problematic for the likes of Harbour Energy and EnQuest, who make the bulk of their profits from domestic sources."

Housebuilders were in the red on the back of the disappointing house price data from Rightmove, with Persimmon down 1.77% and Barratt Developments 0.85% lower.

In broker note action, housebuilder Redrow was knocked 2% lower by a downgrade to 'neutral' at Citi, which cited a less attractive risk-reward, while Close Brothers was 4.42% weaker after a downgrade to 'sell' at Investec.

Outside the FTSE 350, Joules Group was in focus after the fashion and lifestyle retailer confirmed it was calling in the administrators after failing to raise new funding, putting around 1,700 jobs at risk.

Reporting by Josh White for Sharecast.com. Additional reporting by Michele Maatouk, Frank Prenesti, Abigail Townsend and Iain Gilbert.

Market Movers

FTSE 100 (UKX) 7,385.17 0.92% FTSE 250 (MCX) 19,622.25 0.03% techMARK (TASX) 4,368.25 0.84%

FTSE 100 - Risers

Ocado Group (OCDO) 927.80p 13.99% Informa (INF) 584.40p 5.75% B&M European Value Retail S.A. (DI) (BME) 403.30p 4.62% BT Group (BT.A) 124.95p 4.30% Admiral Group (ADM) 2,120.00p 3.62% GSK (GSK) 1,365.00p 3.13% Severn Trent (SVT) 2,756.00p 2.95% Halma (HLMA) 2,419.00p 2.63% International Consolidated Airlines Group SA (CDI) (IAG) 141.04p 2.63% Rolls-Royce Holdings (RR.) 91.60p 2.56%

FTSE 100 - Fallers

Harbour Energy (HBR) 342.60p -9.63% Intermediate Capital Group (ICP) 1,242.50p -3.64% Unite Group (UTG) 948.00p -2.47% London Stock Exchange Group (LSEG) 8,022.00p -2.41% Flutter Entertainment (CDI) (FLTR) 11,430.00p -2.06% Schroders (SDR) 465.00p -1.80% Persimmon (PSN) 1,335.00p -1.77% Rentokil Initial (RTO) 533.60p -1.55% SEGRO (SGRO) 841.60p -1.36% Dechra Pharmaceuticals (DPH) 2,930.00p -1.28%

FTSE 250 - Risers

Carnival (CCL) 810.60p 5.28% Volution Group (FAN) 367.00p 4.41% Beazley (BEZ) 632.00p 4.20% QinetiQ Group (QQ.) 345.20p 3.60% Hikma Pharmaceuticals (HIK) 1,435.50p 3.21% Kainos Group (KNOS) 1,481.00p 2.99% Dr. Martens (DOCS) 288.20p 2.93% WH Smith (SMWH) 1,416.00p 2.83% PureTech Health (PRTC) 242.00p 2.76% ITV (ITV) 79.78p 2.70%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 143.05p -9.86% Close Brothers Group (CBG) 1,081.00p -4.42% IntegraFin Holding (IHP) 305.20p -3.72% Energean (ENOG) 1,481.00p -3.14% TI Fluid Systems (TIFS) 144.40p -3.09% NB Private Equity Partners Ltd. (NBPE) 1,580.00p -3.07% Syncona Limited NPV (SYNC) 190.20p -2.96% HGCapital Trust (HGT) 366.50p -2.89% Urban Logistics Reit (SHED) 147.50p -2.64% Derwent London (DLN) 2,444.00p -2.63%