London open: Stocks edge lower after China data, Halifax house prices

(Sharecast News) - London stocks edged lower in early trade on Wednesday as investors mulled a slump in Chinese exports and a drop in UK house prices.

At 0830 BST, the FTSE 100 was down 0.3% at 7,605.60.

Data out earlier showed that China's exports fell last month in another indication that the rebound in the world's second-largest economy was losing steam.

Exports fell by 7.5% in May to $283.5bn on an annual basis, a sharp reversal from the increase of 8.5% in April, according to figures by China Customs.

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, data from Halifax 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.

"One continued source of support to house prices is the labour market. While unemployment has recently ticked up from very low levels, brisk wage growth would over time help to improve housing affordability, if sustained."

In equity markets, William Hill owner 888 Holdings surged 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.

Market Movers

FTSE 100 (UKX) 7,605.60 -0.29% FTSE 250 (MCX) 19,213.19 -0.02% techMARK (TASX) 4,592.44 -0.12%

FTSE 100 - Risers

Associated British Foods (ABF) 1,890.50p 2.74% Melrose Industries (MRO) 511.80p 1.71% Next (NXT) 6,570.00p 1.36% Kingfisher (KGF) 240.60p 0.63% Frasers Group (FRAS) 700.00p 0.57% Tesco (TSCO) 264.40p 0.49% JD Sports Fashion (JD.) 155.50p 0.42% HSBC Holdings (HSBA) 613.30p 0.41% Centrica (CNA) 119.70p 0.38% Lloyds Banking Group (LLOY) 45.34p 0.38%

FTSE 100 - Fallers

Croda International (CRDA) 6,074.00p -2.66% Ocado Group (OCDO) 353.70p -1.31% Spirax-Sarco Engineering (SPX) 11,165.00p -1.28% Prudential (PRU) 1,132.50p -1.13% Diageo (DGE) 3,315.00p -1.07% Mondi (MNDI) 1,258.50p -0.98% Johnson Matthey (JMAT) 1,775.00p -0.98% Anglo American (AAL) 2,431.00p -0.96% Fresnillo (FRES) 676.00p -0.91% Entain (ENT) 1,293.50p -0.88%

FTSE 250 - Risers

Hilton Food Group (HFG) 710.00p 4.41% Harbour Energy (HBR) 250.10p 4.38% Baltic Classifieds Group (BCG) 170.00p 3.03% Discoverie Group (DSCV) 821.00p 3.01% Marks & Spencer Group (MKS) 192.90p 2.83% Vanquis Banking Group 20 (VANQ) 229.00p 1.78% National Express Group (NEX) 114.00p 1.51% Network International Holdings (NETW) 373.60p 1.47% C&C Group (CDI) (CCR) 143.00p 1.27% Pets at Home Group (PETS) 394.40p 1.23%

FTSE 250 - Fallers

Morgan Sindall Group (MGNS) 1,830.00p -2.87% Pagegroup (PAGE) 433.60p -1.63% Bankers Inv Trust (BNKR) 99.10p -1.29% Jupiter Fund Management (JUP) 113.70p -1.22% Derwent London (DLN) 2,204.00p -1.17% Witan Inv Trust (WTAN) 230.00p -1.08% Synthomer (SYNT) 93.00p -1.06% Travis Perkins (TPK) 880.20p -1.03% ASOS (ASC) 352.40p -1.01% Herald Investment Trust (HRI) 1,802.00p -0.99%