London close: Stocks finish higher on quiet Monday

(Sharecast News) - London's stock markets managed to close higher on Monday, reversing earlier losses despite a lack of significant corporate or macroeconomic news.

The FTSE 100 rose by 0.55%, ending the day at 8,356.94 points, while the FTSE 250 gained 0.52%, closing at 21,157.47 points.

In currency markets, sterling was last up 0.3% on the dollar, reaching $1.2983, but slipped slightly by 0.04% against the euro, changing hands at €1.1734.

"The start of the week kicked off on a positive footing for stock index bulls with mostly further advances being made in low volume and volatility ahead of Wednesday's FOMC minutes and the end of week Jackson Hole symposium," said IG senior technical analyst Axel Rudolph.

"The notable exception is the Nikkei 225 which dropped by over a percent on profit taking."

Rudolph said rate cut expectations of at least 25 basis points at the Fed's September meeting and 94 basis points before the end of the year were continuing to put pressure on the dollar, as it depreciated to a seven-month low against a basket of major currencies.

"The gold price remains close to last week's record high around the $2,500 mark while the oil price stays under pressure on demand concerns."

Interest rate cut spurs UK housing market, US Fed cut looking likely

In economic news, the recent interest rate cut in the UK spurred a significant revival in the housing market, with a notable increase in buyer activity.

According to data from Rightmove, the number of potential buyers contacting estate agents has surged by 19% compared to the same period last year, following the Bank of England's decision to lower the Bank Rate to 5.0% from a 16-year high of 5.25%.

That marked an acceleration from the 11% growth seen in July.

The rate cut, the first in four years, also encouraged more sellers to enter the market, with new listings up by 5% year-on-year.

Meanwhile, the average five-year fixed mortgage rate had decreased to 4.80%, down from 5.82% a year ago, although average asking prices for new sellers dipped by 1.5% in August, reflecting typical seasonal trends.

"The first Bank Rate cut since 2020 has sparked a welcome late summer boost in buyer activity," said Tim Bannister, Rightmove's director of property science.

"While mortgage rates aren't yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment."

Across the Atlantic, the Federal Reserve was seen to be considering the possibility of cutting benchmark interest rates at its September meeting.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, suggested that the time had come for the central bank to debate this option, given the shifting balance of risks.

While acknowledging progress in controlling inflation, Kashkari expressed concern about emerging weaknesses in the labour market.

However, he emphasised that any rate cuts should be gradual, advocating for reductions of no more than a quarter percentage point at a time, as layoffs remain low and unemployment claims do not indicate significant economic deterioration.

Plus500 in the green, Domino's Pizza cools on broker note

On London's equity markets, financial trading platform Plus500 jumped 4.69% after the company announced that its full-year 2024 results were expected to exceed current market expectations.

Plus500 said it anticipated revenue of $697.8m and EBITDA of $314.6m, driving investor confidence.

In the housing sector, Barratt Developments and Redrow also posted gains, rising by 1.85% and 3.13% respectively.

The companies were nearing completion of their £2.5bn merger, which was expected to finalise later this week, despite concerns raised by regulators over local competition.

"Barratt's acquisition of Redrow is expected to clear within the week, creating a new leader in the UK housebuilding space," said AJ Bell investment director Russ Mould.

"The issues raised by the competition authorities always looked surmountable given they were restricted to just one part of Whitchurch in Shropshire and Barratt has waived the CMA clearance condition which had been written into the deal.

"An enforcement order from the regulator is likely but Barratt and Redrow are ready for it and will presumably do what's necessary to prevent the probe going any further."

On the downside, BAE Systems slipped 0.81% amid reports that Germany may reduce its military aid to Ukraine, putting pressure on the defence firm's stock.

Rolls-Royce also saw declines in response to the news, closing down 0.2%.

Domino's Pizza Group dropped by 2.25% after Jefferies reduced its target price for the stock.

Despite the cut, Jefferies maintained a 'buy' rating, citing the stock's undemanding valuation.

The UK-based company previously announced that its full-year profit would likely be at the lower end of market expectations due to a slower start to the first half of the year.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,356.94 0.55% FTSE 250 (MCX) 21,157.47 0.52% techMARK (TASX) 4,913.32 0.26%

FTSE 100 - Risers

Barratt Developments (BDEV) 554.00p 3.40% Glencore (GLEN) 414.35p 2.60% Fresnillo (FRES) 546.50p 2.54% Burberry Group (BRBY) 707.80p 2.33% Anglo American (AAL) 2,235.00p 2.26% 3i Group (III) 3,191.00p 1.88% Next (NXT) 9,972.00p 1.75% Frasers Group (FRAS) 866.00p 1.71% Ashtead Group (AHT) 5,298.00p 1.69% Centrica (CNA) 129.80p 1.68%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 2,044.00p -1.16% Admiral Group (ADM) 2,933.00p -0.91% Spirax Group (SPX) 7,500.00p -0.86% BAE Systems (BA.) 1,339.50p -0.81% Pershing Square Holdings Ltd NPV (PSH) 3,636.00p -0.66% Darktrace (DARK) 587.60p -0.58% Coca-Cola HBC AG (CDI) (CCH) 2,726.00p -0.37% Rolls-Royce Holdings (RR.) 499.50p -0.34% F&C Investment Trust (FCIT) 1,038.00p -0.19% Convatec Group (CTEC) 237.20p -0.17%

FTSE 250 - Risers

Future (FUTR) 1,103.00p 6.91% Redrow (RDW) 793.50p 4.54% Plus500 Ltd (DI) (PLUS) 2,538.00p 4.11% Close Brothers Group (CBG) 492.20p 3.14% International Workplace Group (IWG) 173.70p 3.02% Pennon Group (PNN) 610.00p 2.53% W.A.G Payment Solutions (WPS) 65.00p 2.52% Bellway (BWY) 3,100.00p 2.45% Dr. Martens (DOCS) 72.60p 2.41% Syncona Limited NPV (SYNC) 122.00p 2.34%

FTSE 250 - Fallers

IntegraFin Holding (IHP) 380.00p -1.55% Auction Technology Group (ATG) 438.00p -1.46% JPMorgan Indian Investment Trust (JII) 1,024.00p -1.35% Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 278.50p -1.24% Currys (CURY) 80.10p -1.06% Rathbones Group (RAT) 1,866.00p -1.06% Monks Inv Trust (MNKS) 1,166.00p -1.02% 3i Infrastructure (3IN) 342.50p -1.01% Harbour Energy (HBR) 280.40p -0.99% Allianz Technology Trust (ATT) 370.50p -0.93%