London midday: Stocks stay up ahead of ECB; Diageo boosted by upgrade

(Sharecast News) - London stocks were still a little firmer by midday on Thursday as investors eyed the latest policy announcement from the European Central Bank, with Diageo pacing the gains after a rating upgrade. The FTSE 100 was up 0.2% at 8,313.80.

Dan Coatsworth, investment analyst at AJ Bell, said: "The FTSE 100 ticked higher on Thursday after US stocks chalked up another landmark. The Nasdaq index yesterday smashed through the 20,000 barrier for the first time.

"The catalyst for the tech-driven rally was a benign inflation reading. This fuelled expectations for an interest rate cut when the Federal Reserve meets next week.

"The Fed is in tricky position given the uncertainty over the incoming Trump administration's agenda and the scope for tariffs to revive inflationary pressures.

"In hitting this latest milestone, the Nasdaq has nearly doubled in two years. To put that into context, the FTSE All-Share is up around 11% over the same timeframe.

"Later today, the European Central Bank is expected to cut interest rates for a fourth time in the current cycle, in the face of a Eurozone economy which is teetering on the brink of a recession. The rumbling political crises in France and Germany only add to the tricky backdrop."

The ECB is widely expected to cut rates by 25 basis points when it makes its announcement at 1315 GMT.

Earlier, the Swiss National Bank surprised markets with its biggest interest rate cut in nearly a decade. The SNB cut its interest rate from 1% to 0.5% - the lowest level since November 2022. Economists were expecting a 25 basis points rate cut.

Investors will also be eyeing the release of the US producer price index for November due at 1330 GMT.

On home shores, the latest residential market survey from the Royal Institution of Chartered Surveyors showed that house prices climbed in November as the market continued to strengthen.

According to the survey, a net balance of 25% of respondents saw an increase in prices in November, a notable jump on October's balance of 16.

It is also the fourth consecutive month that the balance has strengthened.

The survey showed almost all parts of the UK had seen an upturn in prices, though the strongest growth was in Northern Ireland.

Respondents also expected prices to continue rising in the short and medium-term, which RICS said reflected a "robust"" outlook for the year ahead.

The new buyer enquiries balance was 12 in November, unchanged on October, while new instructions rose for the fifth consecutive month, with a net balance of 17.

But agreed sales volumes were broadly flat, with the balance falling to 1 from 8 a month previously.

Tarrant Parsons, head of market analytics at RICS, sounded a note of caution, however

He said: "Although the latest survey results continue to signal a steady improvement in buyer demand, the broader macro environment is likely to pose additional headwinds moving forward.

"Most significantly, the recent rise in mortgage interest rates may curtail the recovery in market activity.

"Moreover, measures of consumer and business confidence across the economy have deteriorated of late and, if sustained, this begin to feed through into housing market conditions in the months ahead."

In equity markets, Diageo fizzed to the top of the FTSE 100 after an upgrade to 'buy' from 'sell at UBS, which said it sees upside risks to the US business.

Pennon gained after an upgrade to 'overweight' at Barclays.

Currys surged after saying it swung back into the black in the first half, with a solid performance in UK and Ireland helping to offset weakness in the Nordics.

Auction Technology rallied after private equity firm TA Associates said it had agreed to sell its entire 12.6% stake in the company for £85.3m.

Recruiter SThree tumbled after it posted a slide in net fees and warned that the ongoing challenging market conditions would hit profits. Updating on full-year trading, FTSE 250 firm - a specialist in the science, technology, engineering and maths sectors - said group net fees were down 9% year-on-year.

Contract fell 7%, representing 84% of fees. The contractor order book, meanwhile, was down 10% year-on-year, at £161m.

Hays was also sharply lower.

Investec was hit by a downgrade to 'neutral' at JPMorgan.

Market Movers

FTSE 100 (UKX) 8,313.80 0.15% FTSE 250 (MCX) 20,969.60 -0.02% techMARK (TASX) 4,663.07 0.06%

FTSE 100 - Risers

Diageo (DGE) 2,573.00p 3.35% International Consolidated Airlines Group SA (CDI) (IAG) 294.10p 2.12% Lloyds Banking Group (LLOY) 55.18p 1.77% Severn Trent (SVT) 2,591.00p 1.65% Centrica (CNA) 132.25p 1.61% easyJet (EZJ) 586.20p 1.52% Schroders (SDR) 320.20p 1.46% Barclays (BARC) 269.95p 1.24% NATWEST GROUP (NWG) 414.20p 1.20% Sainsbury (J) (SBRY) 277.60p 1.09%

FTSE 100 - Fallers

Associated British Foods (ABF) 2,129.00p -2.87% Rentokil Initial (RTO) 403.80p -2.79% Fresnillo (FRES) 688.00p -1.57% Smith (DS) (SMDS) 531.00p -1.48% Melrose Industries (MRO) 559.00p -1.38% British American Tobacco (BATS) 2,958.00p -1.37% Persimmon (PSN) 1,282.50p -1.31% Diploma (DPLM) 4,486.00p -1.28% Vistry Group (VTY) 676.00p -1.24% Auto Trader Group (AUTO) 815.00p -1.09%

FTSE 250 - Risers

Currys (CURY) 88.65p 12.22% Auction Technology Group (ATG) 595.00p 5.31% Wizz Air Holdings (WIZZ) 1,495.00p 5.13% Watches of Switzerland Group (WOSG) 585.50p 4.00% Pennon Group (PNN) 615.00p 3.45% Raspberry PI Holdings (RPI) 467.30p 3.29% NCC Group (NCC) 138.20p 2.98% Genus (GNS) 1,690.00p 2.80% AO World (AO.) 111.20p 2.58% St James's Place (STJ) 901.00p 2.56%

FTSE 250 - Fallers

SThree (STEM) 277.00p -23.27% Hays (HAS) 78.75p -4.78% Investec (INVP) 570.00p -3.39% Domino's Pizza Group (DOM) 313.00p -3.10% Sirius Real Estate Ltd. (SRE) 83.30p -3.03% Hochschild Mining (HOC) 232.50p -2.72% Zigup (ZIG) 328.00p -2.67% SDCL Energy Efficiency Income Trust (SEIT) 55.90p -2.44% Foresight Environmental Infrastructure Limited (FGEN) 73.30p -2.27% Bytes Technology Group (BYIT) 445.40p -2.24%