London open: Stocks little changed as investors mull China, UK data releases

(Sharecast News) - London stocks were little changed in early trade on Tuesday after a downbeat Asian session, as investors mulled the latest house price and retail sales data and waded through a deluge of corporate news. At 0920 GMT, the FTSE 100 was down 0.1% at 7,408.78.

Data out earlier in China showed that exports declined by 6.4% year-on-year in October, following a 6.2% decline in September and versus expectations for a 3.5% drop.

Meanwhile, imports unexpectedly rose in October, by 3%, following a 6.3% decline in September. The trade surplus narrowed to $56.5bn from an upwardly-revised $77.8bn in September.

On home shores, figures released earlier by the British Retail Consortium and KPMG showed that retail sales growth slowed to an annual rate of 2.5% in October, as milder weather and deal-hunting delayed seasonal spending.

The BRC-KPMG Retail Sales Monitor revealed that growth fell from 2.7% in September, and 4.1% in August. This was well below the three-month average of +3.1% and the 12-month average of +4.2%.

The three-month average growth in food sales rose to 7.9%, from 7.4% the month before, while non-food sales were down 1%, from -1.2% the month before.

"Retail sales growth slowed as high mortgage and rental costs further shook consumer confidence," said BRC chief executive Helen Dickinson.

"Many households are also delaying their Christmas spending in the hopes they can grab a bargain in the upcoming Black Friday sales. The cost-of-living squeeze meant more was spent on lower-price indulgences, such as beauty products - the so-called 'Lipstick Effect'. Meanwhile, the arrival of some colder weather helped to boost fashion sales, particularly for outdoor wear."

Elsewhere, data from Halifax showed that house prices rose in October after six consecutive monthly falls amid constrained supply, but demand remains weak overall.

House prices ticked up 1.1% on the month following a 0.3% fall in September.

On the year, prices were down 3.2% in October following a 4.5% decline the month before. The average price of a home stood at £281,974.

Kim Kinnaird, director, Halifax Mortgages, said: "Prospective sellers appear to be taking a cautious attitude, leading to a low supply of homes for sale. This is likely to have strengthened prices in the short-term, rather than prices being driven by buyer demand, which remains weak overall.

"While many people will have seen their income grow through wage rises, higher interest rates and wider affordability pressures continue to be challenges for buyers.

"Across the medium-term, with financial markets not anticipating a decline in the Bank of England's Base Rate soon, we expect house prices to fall further overall - with a return to growth from 2025.

"The current picture should continue to be seen in the context of the longer-term house price trend as, on average, prices remain around £40,000 above pre-pandemic levels."

The latest figures from Kantar were also in focus, as they showed that grocery price inflation fell to single digits for the first time since July 2022. In the four weeks to 29 October, inflation was 9.7% higher than a year earlier.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Grocery price inflation has finally dropped into single digits after 16 months of double digit growth, marking a big milestone for the British public and retailers.

"While the drop to 9.7% is positive news and something of a watershed, consumers will still be feeling the pinch. We're only seeing year on year price falls in a limited number of major categories including butter, dried pasta and milk."

In equity markets, Watches of Switzerland surged as it reiterated full-year guidance and posted a jump in second-quarter revenue. The company also outlined plans to more than double sales and profits by FY28.

Primark owner Associated British Foods was up after saying it was returning another £500m to shareholders as it reported double-digit growth on both the top and bottom lines in the last financial year.

Persimmon gained as the housebuilder raised its guidance for new home completions despite a 37% slump in finished builds in the third quarter and a significant fall in its order book.

Direct Line rallied as it said pricing actions had led to strong premium growth, with third-quarter gross written premiums from ongoing operations up 68.3% to £1.1bn.

On the downside, RS Group lost ground as it posted a fall in first-half revenue and profit.

Restaurant Group was in the red after Pizza Express Wheel Topco said it does not intend to make an offer for the Wagamama Owner, citing "market conditions".

4imprint nudged lower despite lifting its full-year profit outlook, as it pointed to further progress since the first half update.

Outside the FTSE 350, Naked Wines tumbled after the online wine retailer downgraded its full-year guidance, citing a weaker-than-expected performance in the US.