London midday: FTSE extends gains as miners rally; housebuilders slump

(Sharecast News) - London stocks had extended gains by midday on Wednesday following upbeat UK and Chinese manufacturing data, with miners pacing the advance but housebuilders under the cosh after a profit warning from Persimmon. The FTSE 100 was up 0.9% at 7,945.23.

Data released earlier in China set the positive tone, as it showed factory sector activity ramped up more quickly than expected in February. The purchasing managers' index from private sector survey compiler Caixin rose to 51.6 in February from 49.2 the month before, beating consensus expectations of 51.3.

Meanwhile, the official manufacturing PMI jumped to 52.6 from 50.1, coming in ahead of consensus expectations for a reading of 50.7.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "March winds of hope are blowing through markets that China's reopening will offset weakness in other countries which are beset with stubborn inflation and a worsening cost of living crisis."

On home shores, meanwhile, a survey confirmed the downturn in the UK's manufacturing sector abated somewhat in February.

S&P Global's factory sector purchasing managers' index improved from a reading of 47.0 for January to 49.3 in February. That was also slightly better than a preliminary reading of 49.2.

Elsewhere, the latest survey from mortgage lender Nationwide showed that house prices fell by 1.1% year-on-year in February, the first annual decline since June 2020.

The latest BRC-NielsenIQ Shop Price Index showed that shop price inflation hit a fresh high in February as the cost of food continued to soar. Annual inflation was a record 8.4% compared to 8% in January.

Within that, non-food inflation was 5.3%, up from 5.1% in January, while food surged to 14.5%, the highest inflation rate in the food category on record. In January, it was 13.8%.

In equity markets, miners were among the top performers after the Chinese data, with Rio, Antofagasta, Anglo and Glencore all up sharply.

Weir was the standout gainer on the FTSE 100, however, after the engineering group posted a rise in annual profits on the back of a booming mining industry.

Aston Martin surged as it reported a sharp jump in full-year revenues amid increasing output and record total average selling prices.

Dettol and Nurofen maker Reckitt Benckiser gained after saying it swung to a full-year profit as it benefited from higher prices.

On the downside, housebuilders slid after a profit warning from Persimmon, which said it was hit by a spike in mortgage rates. The company said completions would likely be down "markedly" in the current year, which would hit both margin and profits. Persimmon tumbled 9%, while Taylor Wimpey, Barratt, Berkeley, Redrow and Bellway all fell.

Russ Mould, investment director at AJ Bell, said: "Welcome to a new era of chaos for the housebuilders. Falling property prices and rising costs means profits are being squeezed and that will cause earnings in the sector to slump.

"Persimmon has already refined its dividend policy in preparation for a housing market downturn and now it provides a crystal-clear message that margins are set to fall which will lead to a decline in profits.

"The company is preparing for the worst and accepts that 2023 will go down in history as a bad year."

The sector was also hit by the Nationwide survey.

Market Movers

FTSE 100 (UKX) 7,945.23 0.88% FTSE 250 (MCX) 19,989.54 0.43% techMARK (TASX) 4,646.38 0.88%

FTSE 100 - Risers

Weir Group (WEIR) 2,054.00p 8.16% Rio Tinto (RIO) 5,978.00p 4.66% Antofagasta (ANTO) 1,634.00p 4.08% Anglo American (AAL) 2,995.00p 3.83% Glencore (GLEN) 511.50p 3.26% Melrose Industries (MRO) 154.10p 2.84% Mondi (MNDI) 1,431.50p 2.51% Reckitt Benckiser Group (RKT) 5,906.00p 2.50% Smurfit Kappa Group (CDI) (SKG) 3,170.00p 2.49% Endeavour Mining (EDV) 1,739.00p 2.47%

FTSE 100 - Fallers

Persimmon (PSN) 1,322.50p -8.95% Taylor Wimpey (TW.) 119.35p -3.12% Barratt Developments (BDEV) 455.10p -2.98% Unite Group (UTG) 963.00p -2.03% United Utilities Group (UU.) 1,005.00p -1.28% Severn Trent (SVT) 2,716.00p -1.27% Berkeley Group Holdings (The) (BKG) 4,144.00p -1.24% National Grid (NG.) 1,035.50p -1.19% Ocado Group (OCDO) 542.80p -1.09% Land Securities Group (LAND) 681.40p -0.93%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 224.80p 11.79% Fidelity China Special Situations (FCSS) 266.00p 5.35% Man Group (EMG) 276.10p 3.95% Serco Group (SRP) 162.10p 3.91% Oxford Instruments (OXIG) 2,580.00p 3.61% BlackRock World Mining Trust (BRWM) 719.00p 3.01% Pagegroup (PAGE) 458.60p 2.64% RHI Magnesita N.V. (DI) (RHIM) 2,652.00p 2.63% Telecom Plus (TEP) 1,806.00p 2.61% FDM Group (Holdings) (FDM) 845.00p 2.42%

FTSE 250 - Fallers

Vistry Group (VTY) 795.50p -2.93% Tullow Oil (TLW) 34.00p -2.80% Bellway (BWY) 2,157.00p -2.71% BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 150.00p -2.47% Shaftesbury (SHB) 408.80p -2.29% Capital & Counties Properties (CAPC) 123.60p -2.22% HICL Infrastructure (HICL) 156.00p -2.13% UK Commercial Property Reit Limited (UKCM) 55.60p -2.11% Redrow (RDW) 499.20p -2.02% Crest Nicholson Holdings (CRST) 239.60p -1.88%