London midday: Stocks turn higher but gains muted after China, Halifax data

(Sharecast News) - London stocks had popped into the black by midday on Wednesday, but gains were muted as investors mulled a slump in Chinese exports and a drop in UK house prices. The FTSE 100 was up 0.1% at 7,636.67, reversing earlier losses.

Data out earlier showed that China's exports fell 7.5% in May to $283.5bn on an annual basis, a sharp reversal from the increase of 8.5% in April.

The May figure was below the expectations of a fall of 0.1%. Imports fell by 4.5% to $217.7bn, up from a fall of 7.9% in April, and above expectations of a 6.8% fall.

China's trade surplus was $65.8bn in May compared to $90.2bn in the previous month.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "This is being taken as fresh evidence of China's bumpy recovery from the pandemic and another sign that the snap back in activity is waning sharply.

"Higher inflation in key markets, is likely to be part of the picture, given that the tightening of monetary policy is designed to curtail consumer spending power and with people buying fewer goods that they want but don't necessarily need, Chinese exports are becoming casualties."

On home shores, meanwhile, Halifax data showed that annual house prices fell in May for the first time since 2012 amid surging mortgage costs.

House prices declined 1% on the year following 0.1% growth in April. On the month, prices were flat in May following a 0.4% decline the month before, and the average price now stands at £286,532.

Kim Kinnaird, director, Halifax Mortgages, said: "As expected the brief upturn we saw in the housing market in the first quarter of this year has faded, with the impact of higher interest rates gradually feeding through to household budgets, and in particular those with fixed rate mortgage deals coming to an end.

"With consumer price inflation remaining stubbornly high, markets are pricing in several more rate rises that would take Base Rate above 5% for the first time since the start of 2008. Those expectations have led fixed mortgage rates to start rising again across the market.

"This will inevitably impact confidence in the housing market as both buyers and sellers adjust their expectations, and latest industry figures for both mortgage approvals and completed transactions show demand is cooling. Therefore further downward pressure on house prices is still expected."

In equity markets, Marks & Spencer and Primark owner AB Foods were both up, with traders pointing to read-across from positive results from Zara owner Inditex.

William Hill owner 888 Holdings rocketed after it emerged that investor group FS Gaming Investments has built up a 6.6% stake in the company.

The stake was disclosed in a filing after the market close on Tuesday and the investor group includes Lee Feldman, the former chairman of GVC (now Entain), and former chief executive Kenny Alexander.

Niche electronics maker DiscoverIE Group rallied as it reported a 70% rise in annual profits, driven by a strong order book.

Harbour Energy also gained following a report it's in merger talks with Talos Energy.

On the downside, housebuilders Persimmon, Taylor Wimpey and Berkeley lost ground after the Halifax data.

Market Movers

FTSE 100 (UKX) 7,636.67 0.11% FTSE 250 (MCX) 19,193.34 -0.12% techMARK (TASX) 4,602.85 0.11%

FTSE 100 - Risers

Associated British Foods (ABF) 1,916.00p 4.13% BT Group (BT.A) 149.00p 3.44% Ocado Group (OCDO) 370.30p 3.32% Melrose Industries (MRO) 519.00p 3.14% Vodafone Group (VOD) 78.68p 2.29% Glencore (GLEN) 438.65p 1.72% Anglo American (AAL) 2,495.50p 1.67% Antofagasta (ANTO) 1,468.00p 1.52% Smiths Group (SMIN) 1,640.50p 1.14% Rio Tinto (RIO) 5,160.00p 1.14%

FTSE 100 - Fallers

Convatec Group (CTEC) 203.60p -1.45% Persimmon (PSN) 1,233.50p -1.36% Taylor Wimpey (TW.) 116.10p -1.32% Croda International (CRDA) 6,162.00p -1.25% SSE (SSE) 1,857.50p -1.22% 3i Group (III) 1,976.50p -1.17% Admiral Group (ADM) 2,364.00p -1.17% Berkeley Group Holdings (The) (BKG) 3,991.00p -1.16% Pershing Square Holdings Ltd NPV (PSH) 2,778.00p -1.14% Barratt Developments (BDEV) 473.10p -0.96%

FTSE 250 - Risers

Discoverie Group (DSCV) 856.00p 7.40% Harbour Energy (HBR) 248.70p 3.80% Marks & Spencer Group (MKS) 193.50p 3.14% Baltic Classifieds Group (BCG) 170.00p 3.03% Tullow Oil (TLW) 26.10p 2.27% Sirius Real Estate Ltd. (SRE) 91.25p 2.07% QinetiQ Group (QQ.) 368.00p 2.05% Digital 9 Infrastructure NPV (DGI9) 63.00p 1.78% Chemring Group (CHG) 298.00p 1.71% Auction Technology Group (ATG) 758.00p 1.61%

FTSE 250 - Fallers

Jupiter Fund Management (JUP) 111.10p -3.48% ASOS (ASC) 344.00p -3.37% Abrdn Private Equity Opportunities Trust (APEO) 437.00p -2.67% Baillie Gifford Japan Trust (BGFD) 757.00p -2.07% AJ Bell (AJB) 315.60p -1.99% OSB Group (OSB) 526.00p -1.96% Currys (CURY) 50.65p -1.84% JPMorgan Japanese Inv Trust (JFJ) 502.00p -1.76% Liontrust Asset Management (LIO) 794.50p -1.73% SThree (STEM) 381.00p -1.55%