Hot Features
Premium
Trade smarter, not harder: Unleash your inner pro with our toolkit and live discussions.
London open: Stocks edge lower after China data, Halifax house prices
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.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Associated British Foods Plc | +3.80% | +70.00 | 1,910.00 |
| 2 |  |
Marks And Spencer Group Plc | +3.49% | +6.55 | 194.15 |
| 3 |  |
Melrose Industries Plc | +2.78% | +14.00 | 517.20 |
| 4 |  |
Bt Group Plc | +2.78% | +4.00 | 148.05 |
| 5 |  |
Ocado Group Plc | +2.04% | +7.30 | 365.70 |
| 6 |  |
Vodafone Group Plc | +1.92% | +1.48 | 78.40 |
| 7 |  |
Glencore Plc | +1.34% | +5.80 | 437.05 |
| 8 |  |
Anglo American Plc | +1.32% | +32.50 | 2,487.00 |
| 9 |  |
Antofagasta Plc | +1.24% | +18.00 | 1,464.00 |
| 10 |  |
Rio Tinto Plc | +0.98% | +50.00 | 5,152.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Croda International Plc | -2.28% | -142.00 | 6,098.00 |
| 2 |  |
Persimmon Plc | -1.68% | -21.00 | 1,229.50 |
| 3 |  |
Segro Plc | -1.49% | -12.40 | 817.60 |
| 4 |  |
Taylor Wimpey Plc | -1.40% | -1.65 | 116.00 |
| 5 |  |
Berkeley Group Holdings (the) Plc | -1.36% | -55.00 | 3,983.00 |
| 6 |  |
British Land Company Plc | -1.26% | -4.50 | 351.90 |
| 7 |  |
Land Securities Group Plc | -1.20% | -7.60 | 623.60 |
| 8 |  |
Admiral Group Plc | -1.13% | -27.00 | 2,365.00 |
| 9 |  |
Hiscox Ltd | -1.13% | -13.00 | 1,141.00 |
| 10 |  |
Bae Systems Plc | -1.11% | -10.40 | 929.60 |
US close: Stocks finish slightly higher after middling day
Wall Street stocks closed modestly higher on Tuesday, with little in the way of domestic economic news to sway the markets.
At the close, the Dow Jones Industrial Average had managed gains of 0.03% to end the session at 33,573.28, while the S&P 500 added 0.24% to 4,283.85.
Leading the way among the major indices, the tech-heavy Nasdaq Composite increased 0.36% to close at 13,276.42.
An unexpected interest rate hike from Australia’s central bank initially threw a shadow over the day’s opening, although US equities eventually managed to find positive territory by the closing bell.
On the currency front, the dollar remained steady against sterling to last trade at 80.49p, while it dipped 0.01% to 93.51 euro cents on the common currency.
Against the yen, the greenback fell slightly by 0.03% to change hands at JPY 139.59.
“The surprise rate hike by 25 basis-points to 4.10% by the Reserve Bank of Australia, to its highest level since April 2012, led to the fourth consecutive day of gains for the AUD-USD pair,” noted IG senior market analyst Axel Rudolph.
“With the central bank leaving the door open for further tightening, due to wage and inflationary pressures, the cross may advance further over the coming weeks.”
Australian central bank surprises with another rate hike
In economic news, the Reserve Bank of Australia (RBA) surprised markets by raising its benchmark interest rate amid persisting inflation worries.
The cash rate was raised by 25-basis points, taking it to 4.1% – a height not seen in more than a decade.
Its decision marked the 12th such move in a period of slightly over a year.
“Inflation in Australia has passed its peak, but at 7% is still too high and it will be some time yet before it is back in the target range,” said governor Philip Lowe.
“This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe.”
Apple pulls back, Paratek surges on acquisition announcement
In equities, shares of Apple edged 0.21% lower amid the unveiling of its new augmented reality (AR) headset.
The company’s latest foray into the AR space, touted as the next frontier in consumer technology, was met with mixed responses by market watchers.
Some analysts had, however, expressed concerns over the product’s hefty $3,499 price tag, suggesting it might deter potential consumers.
On the upside, Paratek Pharmaceuticals jumped 10.71% on the heels of an announcement that the company would be acquired.
Wednesday newspaper round-up: International air fares, executive pay, Asos
International air fares are likely to keep climbing from their current highs over the next 10-15 years, with the cost of sustainable fuels expected to drive up ticket prices, according to the global airlines body Iata. Extraordinary demand for travel since the Covid pandemic has led to steep fare rises on many routes, and Iata said consumers could expect to pay more as airlines increase the usage of scarce “greener” jet fuels in response to government mandates to cut aviation’s carbon emissions. – Guardian
Companies at the centre of the cost of living crisis have paid millions to their chief executives as households struggle with soaring bills. Sainsbury’s and Marks & Spencer were joined by National Grid in handing huge pay packets to their bosses, according to annual reports released on Tuesday. – Guardian
Fears of a Labour tax raid after the next general election have prompted some business owners to accelerate plans to sell up, a new survey has found. Two thirds of UK owners of businesses with a turnover of at least £5m are preparing plans to exit their firm, according to research by wealth manager Evelyn Partners. – Telegraph
Lloyds Banking Group has threatened to put the owner of the Daily and Sunday Telegraph into administration after the breakdown of talks with the Barclay family, the owner of the newspapers. A restructuring and advisory group has been lined up as receivers. Sources indicated that insolvency practitioners from the firm could be appointed within days if talks are not resumed and an 11th-hour deal struck. – The Times
Suppliers to Asos have started to sever ties with the troubled retailer after credit insurers withdrew cover amid concerns over its falling profits. Asos — founded in 2000 under the name As Seen On Screen, selling imitations of clothes worn by television and film celebrities — was regarded as a trailblazer for fast-fashion thanks to its focus on twentysomething, smartphone-savvy shoppers and its swift service, which helped it to steam ahead of bricks-and-mortar rivals. – The Times
