London midday: FTSE nudges higher but gains muted

(Sharecast News) - London stocks had nudged into the black by midday on Monday, but gains were muted as oil prices remained higher amid ongoing tensions between the US and Iran and as investors mulled the prospect of a rate hike by the Federal Reserve after last week's blowout payrolls report.

The FTSE 100 was up 0.2% at 10,852.79, with a relatively quiet session expected as US markets will be closed for Labor Day. At the same time, Brent crude was up 0.6% at $96.88 a barrel and West Texas Intermediate was 0.2% higher at $91.62 after the US struck three Iranian crude oil tankers over the weekend.

Iran subsequently attacked three US-affiliated vessels and three oil tankers travelling through the Strait of Hormuz along an "unauthorised" route. Tehran also declared a new "restricted zone" outside the Strait.

Dan Coatsworth, head of markets at AJ Bell, said: "Friday's much stronger than expected US jobs numbers pushed market pricing on an increase in interest rates to a 58%-60% probability.

"Though jobs reports in the US have become increasingly unpredictable and volatile, the latest robust reading could indicate the economy is running a little too hot for the Fed's liking. Chair Kevin Warsh and his colleagues might adopt the pose of a latter-day Goldilocks sizing up a steaming bowl of porridge.

"Concern about inflationary risks is only exacerbated by the latest moves in energy markets, as Brent crude briefly ticked over $97 per barrel. The US and Iran continue to exchange strikes as a resolution to the crisis in the Middle East remains elusive."

On home shores, the latest data from Lloyds showed that annual house prices fell in August for the first time since November 2023 as the market remained subdued.

Prices were down 0.2% on the month following a 0.1% drop in July. On the year, prices declined by 0.4% in August following 0.1% growth the month before. The average price of a home stood at £298,468, down from £299,153.

Northern Ireland continued to record the UK's strongest annual growth, at 6.9 %, while Scotland also continued to see solid growth, with prices rising 3.5% over the past year. Annual growth in Wales stood at 0.6% in August, while within England, growth remained strongest in northern regions, Lloyds said.

By contrast, price growth across much of southern England remained under pressure, reflecting the greater affordability challenge caused by higher average prices. The South East saw the largest decline, with prices down 1.6% year-on-year, followed by Greater London, where prices fell 1.5%.

Andrew Asaam, mortgages director at Lloyds, said: "The housing market has faced a more difficult backdrop in recent months, with the impact of global events on inflation and borrowing costs creating greater economic uncertainty. What we're not seeing is a rush of homeowners cutting prices. But more are choosing to sit tight, with sellers reluctant to accept offers they feel are too low, while some buyers are waiting to see how conditions develop.

"As a result, fewer homes are changing hands, with latest industry figures showing mortgage approvals now at their lowest level since the start of 2024. It's also important to keep recent price movements in perspective. Average house prices remain around 25% higher than they were at the end of 2019, despite the substantial increase to interest rates seen over recent years. The market's adjustment to higher borrowing costs has been gradual, with wage growth helping to offset some of the pressure on affordability. The recent modest declines in prices are best viewed in that wider context.

"We expect the market to remain fairly subdued in the months ahead, but this will likely only have a limited impact on house prices. While affordability remains a challenge, wages continue to grow and employment has held up better than many anticipated. This will help to support demand from those who need or want to move."

In equity markets, Standard Life rallied as it posted a strongerthanexpected 25% jump in firsthalf profit, lifted by solid new business flows and buoyant demand in the pensionrisk transfer market.

Spire Healthcare gained as it agreed to be taken over by Tulip UK Bidco, a new company which comprises investment firm Toscafund, private equity firm Three Hills and US investment manager Ares, for £1.03bn. Tulip UK Bidco will pay 250p per share in cash for Spire, which is a 66.2% premium to the closing share price on 13 May, the last business day prior to the possible offer announcement.

Admiral was boosted by an upgrade to 'overweight' at Morgan Stanley, but Ashmore edged down even as it reported a rise in full-year profit and assets under management.

Market Movers

FTSE 100 (UKX) 10,852.79 0.20%

FTSE 250 (MCX) 24,580.85 -0.02%

techMARK (TASX) 6,094.71 0.29%

FTSE 100 - Risers

Standard Life (SDLF) 950.50p 2.25%

Diploma (DPLM) 7,270.00p 2.11%

Admiral Group (ADM) 3,886.00p 1.99%

BP (BP.) 548.00p 1.57%

AstraZeneca (AZN) 12,170.00p 1.37%

Marks & Spencer Group (MKS) 392.40p 1.34%

Shell (SHEL) 3,480.00p 1.34%

Games Workshop Group (GAW) 18,680.00p 1.25%

Sainsbury (J) (SBRY) 344.30p 1.23%

Tesco (TSCO) 479.30p 1.18%

FTSE 100 - Fallers

Diageo (DGE) 1,632.00p -2.22%

Fresnillo (FRES) 3,080.00p -2.16%

Burberry Group (BRBY) 1,082.00p -1.80%

Entain (ENT) 519.80p -1.48%

Relx plc (REL) 2,584.00p -1.30%

The Sage Group (SGE) 1,044.00p -1.18%

Informa (INF) 901.20p -1.10%

Coca-Cola HBC AG (CDI) (CCH) 4,482.00p -1.06%

Haleon (HLN) 349.20p -1.02%

Kingfisher (KGF) 304.30p -1.01%

FTSE 250 - Risers

Ceres Power Holdings (CWR) 409.40p 4.80%

Aston Martin Lagonda Global Holdings (AML) 35.44p 4.40%

B&M European Value Retail (BME) 234.60p 3.35%

XP Power Ltd. (DI) (XPP) 1,870.00p 3.31%

Spire Healthcare Group (SPI) 245.50p 3.15%

Gamma Communications (GAMA) 1,186.00p 2.60%

Genus (GNS) 2,320.00p 2.47%

Baltic Classifieds Group (BCG) 2.54p 2.25%

RS Group (RS1) 761.00p 2.22%

AEP Plantations (AEP) 200.50p 2.09%

FTSE 250 - Fallers

Michael Page (PAGE) 207.20p -3.89%

Hays (HAS) 67.10p -3.87%

Halfords Group (HFD) 259.00p -2.46%

Caledonia Investments (CLDN) 386.50p -2.15%

Great Portland Estates (GPE) 329.40p -2.03%

Vistry Group (VTY) 280.80p -2.02%

Hochschild Mining (HOC) 647.50p -1.97%

Globaldata (DATA) 72.65p -1.96%

IP Group (IPO) 68.00p -1.73%

Trustpilot Group (TRST) 276.80p -1.70