London midday: Stocks off lows but IAG slumps on downgrade

(Sharecast News) - London stocks were still in the red but off earlier lows by midday on Thursday, as investors mulled uninspiring Chinese trade data and the latest figures on UK house prices. The FTSE 100 was down 0.1% at 7,506.76.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 took a step back on Thursday amid weak trading in the US and China as some of the excitement about a pivot from central banks dampens down.

"US jobs numbers tomorrow and central bank meetings next week could inform the market if it has got carried away with the level of rate cuts which are now being priced in for 2024."

Data out earlier showed that China's trade balance widened substantially more than expected in November as exports unexpectedly rose and imports registered a surprise decline.

The trade balance stood at $68.4bn last month, up from $56.5bn in October and well above the consensus forecast of $58.1bn.

Exports were up 0.5% year-on-year in November after a 6.4% annual drop the month before; analysts had expected a decline of 0.8%. Meanwhile, imports fell 0.6% after rising 3% previously, surprising analysts who had expected another 3% increase.

On home shores, figures from Halifax showed that house prices rose for the second month in a row in November, boosted by a shortage of properties.

House prices rose 0.5% on the month following a 1.2% jump in October and after six consecutive declines, leaving the price of a home at £283,615.

On a yearly basis, prices were down 1% in November, following a 3.1% drop in October.

Kim Kinnaird, director of Halifax Mortgages, said: "The resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand. That said, recent figures for mortgage approvals suggest a slight uptick in activity levels, which is likely as a result of an improving picture on affordability for homebuyers. With mortgage rates starting to ease slightly, this may be leading to increased buyer confidence, seeing people more inclined to push ahead with their home purchases.

"However, the economic conditions remain uncertain, making it hard to assess the extent to which market activity will be maintained. Other pressures - like inflation, the broader cost of living, overall employment rates and affordability - mean we expect to see downward pressure on house prices into next year."

In equity markets, BA and Iberia owner IAG flew lower after a downgrade to 'underweight' from 'neutral' at JPMorgan.

Vodafone fell after Exane BNP cut the shares to 'underperform', while Burberry dropped after Deutsche Bank slashed its price target on the 'hold' rated shares to 1,600p from 1,950p.

DS Smith lost ground as the packaging manufacturer said chief executive Miles Roberts would be retiring no later than the end of next November and unveiled a fall in interim profit.

Media group Future tumbled as it posted a decline in full-year profits and announced the departure of chief financial and strategy officer Penny Ladkin-Brand.

Games Workshop slid as the miniature wargames manufacturer said profit and revenue for the six months to 26 November were set to rise, but that it expects a fall in licensing revenue.

On the upside, Sports Direct owner Frasers Group gained as it posted an 8% rise in interim profits, driven by a strong jump in sales at its international division.

AJ Bell surged as the investment platform hailed a record full-year performance, with pre-tax profit up 50%.

Industrial thread manufacturer Coats Group shot higher after it decided to switch off pension deficit repair payments from next month. After reaching an agreement with the trustee of its UK pension scheme, Coats will pay a one-off lump sum of £10m to move the scheme into a surplus. This will result in a free cash flow benefit of £2m per month.

Market Movers

FTSE 100 (UKX) 7,506.76 -0.11% FTSE 250 (MCX) 18,593.85 -0.39% techMARK (TASX) 4,091.30 -0.27%

FTSE 100 - Risers

Smith (DS) (SMDS) 306.10p 1.90% Severn Trent (SVT) 2,705.00p 1.84% United Utilities Group (UU.) 1,113.00p 1.50% National Grid (NG.) 1,064.00p 1.19% Melrose Industries (MRO) 547.60p 1.15% Compass Group (CPG) 2,064.00p 1.08% Coca-Cola HBC AG (CDI) (CCH) 2,255.00p 1.03% Taylor Wimpey (TW.) 136.00p 1.00% Barratt Developments (BDEV) 536.80p 0.94% Rightmove (RMV) 569.00p 0.92%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 156.80p -3.15% BT Group (BT.A) 132.65p -2.93% Vodafone Group (VOD) 70.44p -2.42% Entain (ENT) 792.80p -1.93% Burberry Group (BRBY) 1,487.00p -1.78% Rentokil Initial (RTO) 416.30p -1.26% Next (NXT) 8,022.00p -1.26% JD Sports Fashion (JD.) 166.60p -1.22% Croda International (CRDA) 4,658.00p -1.21% Centrica (CNA) 148.95p -1.13%

FTSE 250 - Risers

AJ Bell (AJB) 291.00p 12.79% Coats Group (COA) 74.60p 10.68% Ibstock (IBST) 137.60p 4.16% FirstGroup (FGP) 168.40p 2.68% Genus (GNS) 2,048.00p 1.69% Johnson Matthey (JMAT) 1,593.50p 1.46% Clarkson (CKN) 2,950.00p 1.37% Tate & Lyle (TATE) 645.00p 1.34% TP Icap Group (TCAP) 188.30p 1.29% Crest Nicholson Holdings (CRST) 201.20p 1.21%

FTSE 250 - Fallers

Future (FUTR) 632.00p -15.96% Games Workshop Group (GAW) 9,850.00p -7.08% CAB Payments Holdings (CABP) 53.75p -4.53% Moonpig Group (MOON) 150.90p -4.07% Energean (ENOG) 990.50p -3.83% Investec (INVP) 494.80p -3.62% IP Group (IPO) 48.00p -3.52% Ninety One (N91) 170.00p -3.35% LXI Reit (LXI) 94.05p -2.69% Bakkavor Group (BAKK) 81.20p -2.64%