London midday: Stocks pare gains ahead of Fed announcement
By Michele Maatouk
Date: Wednesday 29 Jan 2020
(Sharecast News) - London stocks had pared gained to trade just a touch higher by midday on Wednesday as investors eyed the latest policy announcement from the Federal Reserve.
The FTSE 100 was up 0.1% at 7,490.37 as solid quarterly results overnight from technology giant Apple helped to underpin the tone, with traders doing their best to shrug off concerns about the coronavirus.
CMC Markets analyst David Madden said: "Beijing have confirmed the coronavirus situation has claimed more lives, and the number of people infected has jumped too. Markets are showing small gains which suggests that dealers aren't overly confident the situation will just drop off the radar anytime soon. Neither are they running for the hills, so perhaps they are waiting to find out the financial cost of the crisis."
Investors were looking ahead to the latest interest rate decision from the Fed, which is due at at 1900 GMT.
Neil Wilson, chief market analyst at Markets.com, said: "We expect no change to the fed funds rate and for the FOMC statement to describe policy appropriate. Market pricing indicates no chance of a cut. The emergence of the coronavirus in China will warrant a degree of caution in the outlook from the Fed, whilst there is little upward pressure on prices to suggest a shift in the FOMC's stance. The signing of the US-China trade deal only confirms priors and doesn't materially alter the outlook from last month."
On home turf, the latest survey from Nationwide showed that house prices grew more than expected in January, hitting a 14-month high.
Prices rose 1.9% on the year following a 1.4% increase in December, beating expectations of a 1.5% jump. This follows 12 consecutive months in which annual price growth had been below 1%.
On the month, prices were up 0.5% in January compared to a 0.1% rise the month before and expectations of 0.3% growth.
Nationwide chief economist Robert Gardner said: "The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years. Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.
"Looking ahead, economic developments will remain the key driver of housing market trends and house prices. Much will continue to depend on how quickly uncertainty about the UK's future trading relationships lifts, as well as the outlook for global growth. Overall, we expect the economy to continue to expand at a modest pace in 2020, with house prices remaining broadly flat over the next 12 months."
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said this was another positive housing market signal.
"Indicators of demand at the very start of the home-buying process are red hot. The new buyer enquiries balance of the RICS Residential Market Survey leaped in December to its highest level since January 2016. In addition, enquiries to estate agents in the month after the election were up 15% year-over-year in January, according to Rightmove, while asking prices posted the biggest month-to-month January gain since records begin in the early 2000s.
"We think the pick-up in demand can be sustained this year by the continuation of low mortgage rates and solid wage growth, driving prices up by about 4%."
In equity markets, 3i Group was a high riser after an upgrade to 'overweight' at Morgan Stanley, while Premier Inn owner Whitbread rallied on the back of an upgrade to 'buy' at HSBC.
Builders' merchant Travis Perkins was up after it reported "strong" fourth-quarter sales at Wickes and said plans to demerge the home improvement business this year were on track. The positive update helped to boost B&Q owner Kingfisher, which jumped to the top of the FTSE 100.
Low-cost airline Wizz Air flew higher after it lifted its full-year net profit guidance as it reported a record profit for the third quarter.
Quilter, formerly Old Mutual Wealth Management, rose after a well-received fourth-quarter trading statement, in which it reported positive net flows.
McCarthy & Stone was under the cosh on news that private equity firm Anchorage Capital had placed 43m shares in the retirement housebuilder. According to terms seen by Bloomberg, the shares were being placed at 145p, with Goldman Sachs as bookrunner.
Avast was weaker following reports earlier in the week by Vice and PCMag that the cybersecurity company has been spying on its users and selling their data.
Market Movers
FTSE 100 (UKX) 7,490.37 0.13%
FTSE 250 (MCX) 21,485.90 0.25%
techMARK (TASX) 4,239.98 0.18%
FTSE 100 - Risers
Kingfisher (KGF) 210.20p 2.79%
Evraz (EVR) 375.50p 2.40%
3i Group (III) 1,124.50p 2.32%
Whitbread (WTB) 4,440.00p 2.07%
Melrose Industries (MRO) 244.30p 1.92%
Royal Bank of Scotland Group (RBS) 221.80p 1.79%
Smurfit Kappa Group (SKG) 2,736.00p 1.79%
Smith (DS) (SMDS) 353.50p 1.41%
Antofagasta (ANTO) 871.20p 1.40%
Glencore (GLEN) 230.60p 1.32%
FTSE 100 - Fallers
NMC Health (NMC) 1,346.50p -2.64%
Hikma Pharmaceuticals (HIK) 1,910.50p -1.65%
Diageo (DGE) 3,096.00p -1.60%
Polymetal International (POLY) 1,244.00p -1.35%
Berkeley Group Holdings (The) (BKG) 5,274.00p -1.35%
Sainsbury (J) (SBRY) 202.90p -1.27%
Centrica (CNA) 87.70p -0.72%
SSE (SSE) 1,496.00p -0.70%
Royal Dutch Shell 'B' (RDSB) 2,141.00p -0.63%
Royal Dutch Shell 'A' (RDSA) 2,136.00p -0.60%
FTSE 250 - Risers
Kaz Minerals (KAZ) 478.50p 6.12%
Quilter (QLT) 168.25p 4.86%
Crest Nicholson Holdings (CRST) 494.20p 4.57%
Virgin Money UK (VMUK) 179.00p 3.77%
Just Group (JUST) 78.05p 3.31%
TBC Bank Group (TBCG) 1,248.00p 3.14%
Galliford Try (GFRD) 141.24p 2.87%
SIG (SHI) 94.50p 2.77%
Wizz Air Holdings (WIZZ) 4,218.00p 2.63%
Fisher (James) & Sons (FSJ) 1,970.00p 2.07%
FTSE 250 - Fallers
McCarthy & Stone (MCS) 146.00p -6.23%
Avast (AVST) 460.60p -4.40%
Euromoney Institutional Investor (ERM) 1,248.00p -3.26%
Barr (A.G.) (BAG) 609.00p -2.87%
Energean Oil & Gas (ENOG) 800.00p -2.79%
Stagecoach Group (SGC) 138.80p -2.39%
Hyve Group (HYVE) 99.70p -2.25%
Fresnillo (FRES) 600.60p -2.02%
Britvic (BVIC) 887.50p -1.93%
Marks & Spencer Group (MKS) 180.95p -1.82%
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN