London midday: Stocks flat after China data; housebuilders rally

Sharecast - The FTSE 100 was flat at 7,419.61.

Investors were digesting the latest data out of China, which 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.

Russ Mould, investment director at AJ Bell, said: "While signs of a softer economy in the US are typically taken as a positive by markets as they anticipate an end to their trial by interest rate hikes, weak economic data from China is just bad news.

"Worse-than-expected Chinese trade data prompted a gloomy start to proceedings on Tuesday as some of the euphoria from rate pauses in the US and UK ebbed away. Helping to sour sentiment was news of Australia’s central bank going against the grain and increasing rates for the first time in five months."

The Reserve Bank of Australia hiked interest rates by 25 basis points to a 12-year high of 4.35%.

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's 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.

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"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, Primark owner Associated British Foods (LON:ABF) was the top performer on the FTSE 100 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.

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

Persimmon (LON:PSN) 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. Other housebuilders followed suit, also buoyed by the Halifax data, with Barratt Developments (LON:BDEV) and Taylor Wimpey (LON:TW) both up.

Vistry advanced after signing a £819m partnerships deal with Leaf Living and Sage Homes for the delivery of more than 2,900 mixed tenure new homes.

Direct Line (LON:DLGD) 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. Admiral was also in the black.

On the downside, RS Group (LON:RS1R) slumped as it posted a fall in first-half revenue and profit.

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

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

Naked Wines (LON:WINEW) tumbled after the online wine retailer downgraded its full-year guidance, citing a weaker-than-expected performance in the US.

Market Movers

FTSE 100 (UKX) 7,419.61 0.02%

FTSE 250 (MCX) 17,785.45 0.21%

techMARK (TASX) 4,074.39 0.32%

FTSE 100 - Risers

Associated British Foods (ABF) 2,236.00p 6.17%

Beazley (BEZ) 562.50p 6.13%

Frasers Group (FRAS) 834.00p 3.09%

NATWEST GROUP (NWG) 195.60p 3.06%

Barratt Developments (BDEV) 451.20p 2.59%

Marks & Spencer Group (MKS (LON:MKS)) 224.00p 2.28%

Taylor Wimpey (TW.) 115.60p 2.17%

Admiral Group (LON:ADML) (ADM) 2,529.00p 1.98%

Smurfit Kappa Group (CDI) (LON:SKG) 2,816.00p 1.73%

SEGRO (SGRO) 769.40p 1.50%

FTSE 100 - Fallers

RS Group (RS1) 660.80p -3.11%

Anglo American (JO:AGLJ) (AAL) 2,162.00p -2.52%

Antofagasta (LON:ANTO) 1,323.50p -1.93%

Glencore (LON:GLEN) 434.80p -1.63%

Hikma Pharmaceuticals (LON:HIK) 1,774.00p -1.50%

Shell (LON:RDSa) (SHEL) 2,635.50p -1.42%

Centrica (LON:CNA) 152.45p -1.26%

BP (LON:BP.) 485.70p -1.18%

Endeavour Mining (EDV (LON:EDV)) 1,716.00p -1.04%

Flutter Entertainment (CDI) (FLTR) 13,560.00p -0.80%

FTSE 250 - Risers

Watches of Switzerland Group (WOSG) 569.50p 9.73%

Hilton Food Group (HFG) 680.00p 5.26%

Persimmon (PSN) 1,131.50p 4.62%

Direct Line Insurance Group (DLG) 163.30p 3.65%

Cranswick (LON:CWK) 3,624.00p 3.13%

Vistry Group (LON:VTYV) (VTY) 755.00p 2.86%

Darktrace (LON:DARK) 352.90p 2.50%

Baltic Classifieds Group (BCG) 207.50p 2.47%

Helios Towers (HTWS) 66.55p 2.38%

IntegraFin Holding (IHP) 235.80p 2.17%

FTSE 250 - Fallers

4Imprint Group (FOUR) 4,705.00p -6.65%

Harbour Energy (LON:HBR) 229.40p -4.10%

Aston Martin Lagonda Global Holdings (AML) 201.60p -3.54%

Ceres Power Holdings (LON:CWR) 209.40p -3.32%

CAB Payments Holdings (CABP) 64.50p -3.30%

Mobico Group (MCG) 61.35p -2.93%

888 Holdings (DI) (LON:888) 79.30p -2.76%

Liontrust Asset Management (LON:LIO) 550.00p -2.57%

Telecom Plus (LON:TEP) 1,610.00p -2.42%

Diversified Energy Company (DEC) 68.70p -2.35%

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