16:38 , Daniel O’Boyle
The FTSE 100 closed at 7,327.39 today, up 0.5%, as it moved further away from the one-year lows it approached last week.
London’s top flight was up by almost 1% for most of the day, but faded slightly after US markets opened.
Airtel Africa and Pearson were top of the risers’ board with strong results day gains. Ocado was again the top faller.
City Voices: The pitfalls of the marathon mortgage
15:59 , Daniel O’Boyle
Craig Fish of Lodestone Mortgages explains the risks involved with 35-year mortgage terms
London continues to struggle with soaring property prices, and now we face a higher and uncertain interest rate landscape, there are a growing number of homeowners that are considering mortgages with terms in excess of 30 years.
These extended terms can be tempting, after all they offer lower monthly payments that make home ownership more affordable. However, its crucial to understand the pitfalls that come with these types of mortgages, especially in the current climate. Long terms mortgages seem to be an attractive option for many, primarily first-time buyers or those with tighter budgets.
Lower monthly payments can be a relief in a city where property prices continue to rise briskly, but it’s essential to be cautious and understand the potential downsides.
Read more here
City Comment: Japan’s lifetime mortgages used to make us laugh. Now they’re almost here
15:50 , Jonathan Prynn
Your starter for ten. When was the average interest rate on newly drawn mortgages last above 5%?
The answer is almost exactly 15 year ago in November 2008, half a generation ago. For the past seven years it has bounced along at around the 2% mark, hitting a historic low of 1.5% in November 2021. What a different world that was.
Since then the cost of taking out a mortgage has rocketed at a remarkable rate.
Today’s figure from the Bank show that they breached the 5% mark – 5.01% to be precise, in September.
Read more here
US market snapshot – modest gains on Wall Street
15:31 , Daniel O’Boyle
US stocks are up, but by less than expected, in early trading on Wall Street.
Big risers include pharma giant AbbVie and telecoms firms AT&T and Verizon.
Take a look at our US market snapshot.
Huge jump in young buyers on ‘marathon’ mortgages
15:17 , Daniel O’Boyle
Young Londoners desperate to get on the housing market are signing up at an alarming pace to “marathon mortgages” that last at least 35 years, warn financial advisers.
High numbers of under 30s are buying houses or more usually flats with mortgage deals that extend beyond a typical retirement age of 67 in the latest sign that there is a huge gap between demand and supply in the capital’s property market.
While the longer-term deals cut monthly repayments, they also hugely increase the size of the total debt in ways some warn could later be seen as a mis-selling scandal encouraged by big banks.
Read more here
Wall Street stocks to jump when markets open
14:21 , Daniel O’Boyle
Wall Street shares are set for a rebound when markets open, according to futures markets.
S&P 500 futures are up by 0.9% to 4,176.50, while Dow Jones futures are also up 0.5%, to 32,811.00. The Nasdaq is set for an even bigger rise, with futures up 1.3% to 14,443.25.
Big risers include online bank SoFi, set to rise more than 10% after reporting its results this morning.
Interest rates rising faster for savings than loans
14:17 , Daniel O’Boyle
Panmure Gordon economist Simon French points out that interest rates are continuing to rise more rapidly for savings than for loans.
City does not expect fireworks from Bank of England at November interest rate meeting
14:11 , Daniel O’Boyle
The City is not expecting any fireworks from the Bank of England at its early November interest rate meeting, amid signs inflation is falling alongside fears of a wider recession.
With the Monetary Policy Committee’s next vote due on Thursday, Square Mile experts are more-or-less united in expecting the base cost of borrowing to stay on hold at 5.25% for the second consecutive meeting.
The MPC held the rate which sets the price of variable mortgages and loans in September, ending a run of 14 consecutive hikes dating back to December 2021. The pause came amid signs that the BOE’s campaign to tame inflation is working and alongside fears that the UK’s flatlining economy could be in jeopardy of falling into recession.
Read more here
Market snapshot as FTSE 100 holds gains
13:16 , Daniel O’Boyle
The FTSE 100 has held onto its early gains, but gilt yields have risen back towards the highs reached last week.
Take a look at our lunchtime market snapshot.
Average value of a romance scam in June was nearly £70,000, says HSBC UK
12:53 , Daniel O’Boyle
The average value of a romance scam in June this year was nearly £70,000, according to cases seen by HSBC UK.
The bank said romance cons are often the highest-value for scammers, with criminals frequently spending months grooming their victims before they “show their true colours”.
In the third quarter of this year, the average romance scam value was £27,876, according to HSBC UK’s analysis of cases it has seen.
In the second quarter of 2023, the average value of romance scams had been even higher, at £40,537 per case.
Read more here
London house prices fall as UK market undergoes most dramatic slowdown since 2009
12:29 , Daniel O’Boyle
London house prices have fallen this year as rising mortgages and the cost of living crisis hampers sales, according to the latest data from Zoopla.
There were price drops across all boroughs, up to as much as 3 per cent in Croydon.
Along with Croydon, the boroughs with biggest falls in house prices were Harrow, at a 2.9 per cent drop, and Waltham Forest at 2.4 per cent.
Read more here
Mortgage approvals slump as ‘autumn housing market pick-up fails to materialise’
11:57 , Daniel O’Boyle
The number of mortgages approved to home buyers fell to the lowest level since January in September, while remortgage approvals slumped to a 24-year low, according to Bank of England figures.
In an indication of future borrowing, 43,300 mortgages were approved for house purchase in September, marking the lowest monthly total since January 2023, the Bank’s Money and Credit report showed.
And 20,600 remortgaging approvals were recorded in September – the lowest level since January 1999. The remortgaging figures only capture remortgaging with a different lender.
Read more here
Pearson and Airtel Africa rally after updates, FTSE 100 higher
10:26 , Graeme Evans
The FTSE 100 index today rallied by a better-than-expected 0.8% or 57.97 points to 7349.25, aided by share price gains of 2% for Diageo, Prudential and Flutter Entertainment.
The improved risk appetite follows a volatile run for global stock markets, with Wall Street’s S&P 500 index now in “correction” territory after finishing Friday’s session more than 10% below where it stood in July.
Updates from heavyweight stocks BP, GSK and BT Group and the latest monetary policy guidance from the Federal Reserve on Wednesday and Bank of England the following day will have the potential to test sentiment later in the week.
In the meantime, investors got a boost from education coursework publisher Pearson after it upgraded full-year guidance amid continued “strong operational momentum” in the third quarter. Shares lifted 15.2p to 934.4p.
Telecoms and mobile money provider Airtel Africa led the top flight, rising 9.1p to 118.9p after it accompanied half-year results with a 9% dividend hike.
Rightmove shares also attracted interest after their recent slide caused by fears over the impact of a potential new US owner for AIM-listed rival OnTheMarket.
The stock is down by more than 10% in recent sessions but today rallied 14.9p to 494.1p thanks to Berenberg analysts switching their rating to “buy” with 605p target price.
In contrast, NatWest shares continue to struggle after Friday’s worse than expected third quarter results. They fell another 2.4p to 179.6p after analysts at Jefferies slashed their price target to 150p and reset expectations for share buybacks in 2024 and 2025 from £3.2 billion to £1.7 billion.
The FTSE 250 index, which has been one of the worst hit benchmarks in the recent stock market sell-off, put back 0.9% or 152.68 points to 17,018.91. Recovering stocks included Wizz Air, which lifted 63.5p to 1613.5p.
Among those in focus on AIM, the eyewear designer and manufacturer Inspecs reported a 4.6% rise in nine-month revenues and said a new production facility in Vietnam remains on track to open in the first half of next year.
Shares rallied 4.8p to 74.8p but house broker Peel Hunt backed them to reach 215p after noting “good strategic progress” amid the tough consumer backdrop.
Household bank savings grow at slowest pace since records began as savers pour money into NS&I
10:04 , Daniel O’Boyle
UK household bank and building society savings grew at the slowest pace since records began in the 12 months to September as savers poured money into NS&I bonds instead, according to the Bank of England.
The Bank’s “household M4” measure – which includes cash and money held in bank and building society accounts with a maturity of five years or less – ticked up by only 0.8% in the last year, after household savings fell by £31.5 billion during September.
Much of the change was due to savers putting money into NS&I products, which are not counted in the “household M4 “ measure due to their longer maturity. A total of £7.7 billion was poured into NS&I instruments during September, the most since August 2020. The returns on NS&I bonds have soared as the Bank of England repeatedly hiked interest rates to their current level of 5.25%.
Read more here
Market snapshot – stocks rise
09:13 , Daniel O’Boyle
Take a look at today’s market snapshot as the FTSE 100 starts the week strong
FTSE 100 rallies, NatWest shares remain under pressure
08:46 , Graeme Evans
London shares have made a better-than-expected start to the week, helping the FTSE 100 index to rise 0.9% or 63.35 points to 7354.63.
Telecoms and mobile money firm Airtel Africa is the best performing blue-chip stock, up 5p to 114.8p on the back of its annual results.
Education coursework publisher Pearson also lifted 14.8p to 934p after upgrading full-year guidance and HSBC added 6.4p to 607.6p thanks to its latest share buyback announcement.
NatWest shares fell another 0.9p to 181.1p, with analysts at Jefferies adding to pressure after Friday’s sell-off by giving the state-backed lender an “underperform” recommendation and 150p target price.
Rightmove benefited from favourable broker comment, rising 13p to 492.2p as Berenberg switched its rating to “buy” with 605p target price.
The FTSE 250 index rallied 155.17 points at 17,021.40, led by events firm Ascential after it announced the sale of two of its businesses in deals worth a combined £1.4 billion. With £850 million of the proceeds set to be returned to investors, the shares jumped 36% or 78p to 293.6p.
HSBC misses City hopes, unveils $3bn buyback
07:59 , Graeme Evans
Profits at HSBC today missed City expectations after the Asia-focused lender reported a surplus of $7.7 billion for the three months to 30 September.
The figure compared with analysts’ estimates of $8.1 billion, but was a big improvement on $4.5 billion the year before due to higher interest rates and a write-down in 2022 caused by the sale of retail banking operations in France.
The bank offset the disappointment by announcing a third interim dividend of $0.10 a share and announcing plans for a further share buy-back of up to $3 billion, which will take place up until the company’s full-year results on 21 February.
At $1.1 billion, the charge for expected credit losses met expectations after including $500 million in relation to Chinese commercial real estate assets. The update comes a few days after shares in Standard Chartered fell sharply on a worse-than-expected profit performance.
Hargreaves Lansdown analyst Matt Britzman said: “There’s still a cloud of uncertainty hovering over the market, but investors will be happy to see no nasty surprises.”
Ascential to sell digital commerce and design businesses in deals worth a combined £1.4 billion
07:59 , Michael Hunter
The FTSE 250 company Ascential is selling two of its business in deals worth a combined £1.4 billion.
It will return £850 million of the proceeds to investors after is its digital commerce business goes to advertising giant Omnicom for in a sale worth £741 million and its product design business is snapped up by private equity group Apex for up to £700 million.
Ascential — best-known for its events business which runs the Cannes Lion festival and the Money 20/20 event — has been in the process of a “strategic review” of its three businesses for some time.
Scott Forbes, chairman, said:
“These actions are compelling in that they will enable us to achieve the objectives of the strategic review, addressing the distinct investment propositions of Ascential’s three businesses, while also better positioning each business to achieve their growth ambitions.”
Gold tops $2000 an ounce, FTSE 100 seen higher
07:24 , Graeme Evans
Gold today topped $2000 an ounce for the first time since May as Middle East developments prompt a continued flight to the safe haven asset.
The precious metal traded at $1981.94 on Friday, rising as far as $2008 early today before settling just below the $2000 threshold. Brent Crude oil today stood at $89.56 a barrel.
Asia stock markets are mixed this morning, with the Nikkei 225 down by more than 1% but the Hang Seng index in Hong Kong stands close to its opening mark.
On Friday, the S&P 500 index closed 0.5% lower to leave the key US benchmark in correction territory following a fall of 10% since late July.
The latest pressure came from the energy sector after earnings by Exxon Mobil and Chevron disappointed traders to leave their shares 2% and 7% lower respectively by the end of Friday’s session.
As well as more quarterly updates, the focus later this week will be on monetary policy announcements by the Federal Reserve on Wednesday and Bank of England the following day.
The FTSE 100 index fell 0.9% to 7291.28 on Friday but CMC Markets expects London’s top flight to steady in today’s session with a rise of 20 points to 7311 at the opening bell.
Recap: Friday’s top stories
Sunday 29 October 2023 22:25 , Simon Hunt
Good morning. Here’s a summary of our top headlines from Friday: