London midday: Stocks fall further as miners slump on China data

London stocks had fallen further by midday Monday, with miners under the cosh after weak Chinese data, ahead of a key week for central bank meetings.

The FTSE 100 was down 0.6% at 7,507.50.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 started the week on the back foot, dragged lower by the mining sector as figures from China over the weekend showed the economy swung deeper into deflation.

"An indicator of depressed domestic demand and a very different story to the inflationary pressures faced in the rest of the world, the data inevitably hit the miners given the world’s second largest economy is such a rapacious consumer of commodities.

"Later this week we have inflation figures from the US and a monthly GDP reading from the UK before the Federal Reserve and Bank of England deliver their latest decisions on interest rates on Wednesday and Thursday respectively.

"Both are widely expected to keep rates on hold so any interest is likely to be on the messaging which accompanies these decisions and if there are any split opinions. The market is now pricing in material rate cuts for 2024 - will Jerome Powell and his counterpart Andrew Bailey take the opportunity to temper these hopes?"

Earlier on Monday, the latest data from Rightmove revealed that the housing market showed tentative signs of stabilising in December despite a further slide in house prices.

According to the Rightmove house price index, house prices fell by 1.9% this month. Prices normally dip in December, due to seasonal factors, but this year’s fall was more than the previous 20-year average of a 1.5% decline.

Year-on-year, prices were just 1.1% lower, however.

The average asking price is now £355,177.

Rightmove said sellers were becoming more competitive with pricing as they looked to get homes sold in a "challenging" market.

But it also noted signs of more stable market conditions, as the market slowly shifted from "frenzy to normality", which should see more family movers returns. Many families shelved plans to move to bigger homes after last year’s disastrous mini-budget sent mortgage rates soaring.

The number of agreed sales was down 13% on the same period last year, which Rightmove said was better-than-expected given that the 2022 market was "much more frenetic".

Tim Bannister, director of property science at Rightmove, said: "We entered this year under a cloud of uncertainty, as the fallout from the autumn mini-budget filtered through to lower activity levels.

"High mortgage rates, which have added to already-stretched buyer affordability, have been a challenge throughout 2023, and this is likely to carry into next year.

"However, for now there appears to be more calm and certainty heading into 2024, and the annual fall of 1.1% in asking prices highlights the market’s much better-than-predicted resilience this year."

Average mortgage rates have been falling for the last four months, with the average 5-year fixed mortgage rate now 5.11%, compared to 6.11% in July.

In equity markets, heavily-weighted miners were among the worst performers on the top-flight index, with Antofagasta, Anglo American and Glencore all lower.

British Gas owner Centrica was under the cosh as Morgan Stanley cut its price target on the shares and said it was lacking near-term catalysts to drive a further re-rating.

On the upside, Rolls-Royce rallied after Citigroup lifted its price target on the stock following the engine maker’s capital markets day.

The bank said its earnings per share forecasts were up 27% in the near term and 52% in the long terms and the target price lifted, driven by "very strong" cash generation.

"In the near term, we believe cash flow will be helped by working capital unwind, but expect the medium term free cash flow of well over 30p per share (31p in 2025 rising to 38p in 2028) will be sustainable and should be valued accordingly," Citi said.

Market Movers

FTSE 100 (UKX) 7,507.50 -0.62%
FTSE 250 (MCX) 18,626.27 -0.40%
techMARK (TASX) 4,119.92 -0.24%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 295.30p 2.07%
Antofagasta (ANTO) 1,542.50p 1.88%
Anglo American (AAL) 1,835.20p 1.81%
Smurfit Kappa Group (CDI) (SKG) 3,064.00p 0.86%
BT Group (BT.A) 133.25p 0.83%
Barratt Developments (BDEV) 540.80p 0.78%
Associated British Foods (ABF) 2,439.00p 0.70%
DCC (CDI) (DCC) 5,558.00p 0.69%
Melrose Industries (MRO) 563.20p 0.68%
Hargreaves Lansdown (HL.) 753.40p 0.67%

FTSE 100 - Fallers

Centrica (CNA) 143.85p -3.75%
Glencore (GLEN) 443.85p -2.96%
Endeavour Mining (EDV) 1,714.00p -2.61%
British American Tobacco (BATS) 2,266.50p -2.16%
Standard Chartered (STAN) 647.60p -1.88%
Rio Tinto (RIO) 5,486.00p -1.74%
SSE (SSE) 1,851.00p -1.67%
International Consolidated Airlines Group SA (CDI) (IAG) 155.75p -1.67%
Lloyds Banking Group (LLOY) 45.59p -1.61%
NATWEST GROUP (NWG) 217.00p -1.59%

FTSE 250 - Risers

Plus500 Ltd (DI) (PLUS) 1,609.00p 2.48%
Watches of Switzerland Group (WOSG) 679.50p 1.49%
Bridgepoint Group (Reg S) (BPT) 246.00p 1.49%
QinetiQ Group (QQ.) 302.60p 1.48%
Senior (SNR) 172.40p 1.41%
British Land Company (BLND) 381.40p 1.38%
RHI Magnesita N.V. (DI) (RHIM) 3,126.00p 1.36%
Darktrace (DARK) 369.80p 1.18%
ITV (ITV) 61.56p 1.08%
Genuit Group (GEN) 356.00p 0.99%

FTSE 250 - Fallers

Helios Towers (HTWS) 72.20p -4.75%
Tritax Eurobox (GBP) (EBOX) 57.20p -4.03%
Genus (GNS) 1,961.00p -3.49%
Auction Technology Group (ATG) 470.00p -3.49%
Diversified Energy Company (DEC) 1,265.50p -2.73%
Aston Martin Lagonda Global Holdings (AML) 225.40p -2.59%
Future (FUTR) 599.50p -2.52%
FirstGroup (FGP) 163.60p -2.39%
Tyman (TYMN) 272.50p -2.15%
Redde Northgate (REDD) 363.50p -2.15%