London midday: FTSE racks up strong gains as miners rally

(Sharecast News) - London stocks had powered higher by midday on Thursday, led by the mining sector, as investors mulled the latest UK house price data and eyed a policy announcement from the European Central Bank. The FTSE 100 was up 1.1% at 7,605.56.

Russ Mould, investment director at AJ Bell, said: "The miners were doing the heavy lifting for the FTSE 100 on Thursday morning amid positive broker commentary on the sector.

"Inflation data from the US yesterday was mixed but there wasn't anything in there to cause major alarm for either investors or the Federal Reserve, even if energy prices are starting to become a relevant inflationary pressure again."

On Wednesday, data showed that the US consumer price index ticked higher than expected in August, rising by 3.7% at a headline annual level, versus expectations of 3.6% and by 0.6% on a monthly basis, which was in line.

Core inflation, which strips out volatile energy and food prices, rose by 4.3% on an annual basis and by 0.3% monthly.

Mould added: "The next big test for markets comes later today as the European Central Bank gears up for its latest interest rate decision. Somewhat unusually, given central bank judgements are often heavily trailed or hinted at, there has been a big swing in expectations on what the ECB might do, with hopes for a pause fading in recent days and a 25-basis point hike now the assumed outcome."

The ECB rate announcement is due at 1315 BST, while in the US, investors will be eyeing the producer price index for August at 1330 BST along with retail sales.

On home shores, the latest Residential Market Survey form the Royal Institution of Chartered Surveyors showed that house prices fell sharply last month amid higher mortgage rates.

The net balance for house prices fell from -55 in July to -68 last month, the most negative reading since February 2009.

New buyer enquiries slipped to -47 from -45, with new sale instructions falling to -26 from -17.

Respondents also reported a decline in newly agreed sales, from -45 to -47 - the weakest reading since the early stages of the pandemic.

Simon Rubinsohn, Rics' chief economist, said: "The latest round of feedback from Rics members continues to point to a sluggish housing market with little sign of any relief in prospect.

"Buyer enquiries remain under pressure against a backdrop of economic uncertainty and the high cost of mortgage finance. Meanwhile, prices are continuing to slip, albeit that the relatively modest fall to date needs to be seen in the context of the substantial rise recorded during the pandemic.

"Critically, affordability metrics still remain stretch in many parts of the country."

Looking ahead, respondents expected sales to remain subdued, although the balance did turn marginally less negative, at -38 compared to -45 a month previously.

In equity markets, miners were the standout performers following an upbeat note by JPMorgan Cazenove. The bank upgraded Rio Tinto to 'neutral' from 'underweight'. It also lifted its price target for Anglo American and said it remains its "top pick" in the sector.

Hilton Food Group rallied as the food packaging business said it will expand into the North American market after entering a long-term supply agreement with Walmart Canada.

Online travel platform Trainline surged after it launched a £50m share buyback, as ticket sales grew by almost a quarter in the first six months of its financial year.

Outside the FTSE 350, Deliveroo shot up following a Bloomberg report that activist investor Sachem Head Capital Management has taken a stake.

On the downside, Melrose, Unite Group and Intertek fell as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,605.56 1.06% FTSE 250 (MCX) 18,562.19 0.00% techMARK (TASX) 4,357.72 0.42%

FTSE 100 - Risers

Anglo American (AAL) 2,217.50p 5.60% Rio Tinto (RIO) 5,231.00p 4.93% Smurfit Kappa Group (CDI) (SKG) 2,886.00p 3.81% Glencore (GLEN) 445.70p 3.20% Antofagasta (ANTO) 1,470.00p 2.37% BP (BP.) 520.20p 2.36% Flutter Entertainment (CDI) (FLTR) 14,320.00p 2.32% Airtel Africa (AAF) 121.20p 2.11% Phoenix Group Holdings (PHNX) 531.20p 1.88% Haleon (HLN) 325.40p 1.64%

FTSE 100 - Fallers

Unite Group (UTG) 914.00p -1.19% Melrose Industries (MRO) 495.30p -1.18% International Consolidated Airlines Group SA (CDI) (IAG) 152.05p -1.14% Ocado Group (OCDO) 760.80p -1.07% InterContinental Hotels Group (IHG) 6,152.00p -1.03% Burberry Group (BRBY) 2,089.00p -1.00% Convatec Group (CTEC) 223.60p -0.89% Smith & Nephew (SN.) 1,059.00p -0.84% RS Group (RS1) 742.60p -0.83% WPP (WPP) 764.20p -0.70%

FTSE 250 - Risers

Trainline (TRN) 276.80p 11.88% Hilton Food Group (HFG) 776.00p 6.89% Harbour Energy (HBR) 253.20p 2.68% Synthomer (SYNT) 47.26p 2.52% NCC Group (NCC) 94.10p 2.17% Pennon Group (PNN) 611.50p 2.00% BH Macro Ltd. GBP Shares (BHMG) 364.50p 1.96% Digital 9 Infrastructure NPV (DGI9) 61.30p 1.66% Carnival (CCL) 1,095.00p 1.62% Mobico Group (MCG) 86.25p 1.59%

FTSE 250 - Fallers

LXI Reit (LXI) 90.90p -2.88% Renishaw (RSW) 3,652.00p -2.61% easyJet (EZJ) 443.80p -2.27% Aston Martin Lagonda Global Holdings (AML) 326.80p -2.21% International Public Partnerships Ltd. (INPP) 127.20p -2.15% Currys (CURY) 48.54p -1.90% Energean (ENOG) 1,140.00p -1.81% WH Smith (SMWH) 1,359.00p -1.81% Apax Global Alpha Limited (APAX) 163.80p -1.80% Genus (GNS) 2,142.00p -1.74%