London close: FTSE ends above 7,500 on better China sentiment
London stocks closed in a mixed state on Tuesday, with the top-flight index maintaining most of its gains amid hopes that China would soon ease its strict Covid-19 restrictions.
The FTSE 100 ended the session up 0.51% at 7,512.00, while the FTSE 250 was down 0.55% at 19,186.16.
Sterling was in positive territory, last trading up 0.19% on the dollar at $1.1982, while it strengthened 0.12% against the euro to change hands at €1.1580.
“After a poor start to the week European markets have edged modestly higher today, except for the FTSE 100 which has moved above the 7,500 level, helped by a strong performance from HSBC, and a more positive vibe from Chinese markets,” said CMC Markets chief market analyst Michael Hewson.
“This outperformance has come about after Chinese health authorities signalled significant progress in pushing booster rates higher and pledging to try and push up vaccination rates in older people, helping to lift HSBC, Prudential and Standard Chartered.”
In economic news, official data released earlier showed mortgage approvals tumbling by more than expected in October, as the fallout from the mini-budget weighed heavily.
According to the Bank of England, there were 59,000 mortgage approvals for house purchases in October, down from 66,000 in September and below consensus expectations of around 60,000.
Net borrowing of mortgage debt by individuals was also lower, falling to £4bn from £5.9bn a month earlier.
The effective rate paid on newly-drawn mortgages - the actual interest rate paid - increased by 25 basis points to 3.09%.
Interest rates had jumped to 3% so far this year - the highest since 2008 - as the BoE looked to tackle historic levels of inflation.
But the rise in borrowing costs was exacerbated by the government’s ill-received mini-budget on 23 September.
The prospect of large, unfunded tax cuts alongside no spending plans or economic forecasts sparked market turmoil, sending mortgage rates sharply higher and leading to the temporary withdrawal of some offers.
“The relatively modest increase in the effective interest rate provides false comfort, as this is based on completed housing transactions, relating to mortgages agreed with lenders a few months ago,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
“The effective rate on new mortgages likely will soar to between 5.5% and 6.0% at the start of next year.”
On the continent, economic sentiment in the eurozone registered its first increase since February on the back of a rebound in consumer confidence, although industrial sentiment continued to decline.
The European Commission’s euro area economic sentiment index improved to 93.7 in November from a reading of 92.7 for October, above consensus expectations for 93.5.
Net revisions added 0.2 points to November's reading.
The cost of living in Germany surprised to the downside in November, meanwhile, as declines in energy and services inflation offset higher food prices.
According to a preliminary reading from the Destatis federal statistics office, the annual rate of increase in the consumer price index fell to 10% in November from 10.7% for October.
Economists had pencilled in a reading of 10.4%.
Across the pond, US consumer confidence dipped in November amid rising prices at the pump, although the outlook pointed to still "elevated" recession risks.
The Conference Board's consumer confidence index ebbed to 100.2 for November from an October print of 102.2, above consensus forecasts for 100.0.
“Consumer confidence declined again in November, most likely prompted by the recent rise in gas prices,” said Lynn Franco, senior director of economic indicators at the Conference Board.
“Consumer expectations regarding the short-term outlook remained gloomy.
“Indeed, the expectations index is below a reading of 80, which suggests the likelihood of a recession remains elevated.”
Staying stateside, US home price inflation continued to slow in September, dragged lower by fast-rising interest and mortgage rates.
The Federal Housing Finance Agency's house price index edged up at a seasonally-adjusted month-on-month pace of 0.1%, against expectations for 1.3%.
In annual terms, meanwhile, the rate of increase slowed to 11.0% from 11.9%.
Sentiment began the global day rosier after Chinese authorities moved to boost vaccination rates among the elderly, in a bid to pave the way for the eventual reopening of the country.
Beijing said it wanted to increase vaccinations among those aged over 80, adding that the gap between vaccinations and boosters would be reduced to three months.
On London’s equity markets, Asia-focused Prudential was up 3.92% and Standard Chartered jumped 5.04% following strong gains in Chinese equity markets.
HSBC shot 4.44% higher after it agreed to sell its Canadian business to Royal Bank of Canada in a $13.5bn cash deal.
Miners - which are heavily dependent on demand from China - also gained, with Rio Tinto Group up 3.73%, Anglo American rising 3.66%, Glencore ahead 2.32%, and Antofagasta 2.75% firmer.
West End landlord Shaftesbury advanced 1.45% after it swung to a full-year profit, as it returned to pre-pandemic occupancy.
On the downside, budget airline easyJet descended 2.57% even after it narrowed its full-year losses, saying it was ramping-up preparations for next summer as travellers looked for good value travel amid the cost-of-living crisis.
Energy industry engineering and consulting business John Wood Group tumbled 15.93% despite holding its full-year guidance, as it said trading in the first 10 months of the year was in line with expectations.
In broker note action, Admiral Group slipped 0.34% and Direct Line Insurance was 1.25% weaker after downgrades to ‘hold’ and ‘reduce’ respectively at HSBC, while Sage Group was 3.68% weaker after an initiation at ‘sell’ by Goodbody.
IMI was down 4.28% after a cut to ‘sell’ at UBS, but Rotork managed gains of 0.76% after an upgrade to ‘buy’ by the same outfit.
Reporting by Josh White for Sharecast.com. Additional reporting by Michele Maatouk, Frank Prenesti, Abigail Townsend and Alexander Bueso.
FTSE 100 - Risers
Standard Chartered (STAN) 609.00p 5.04%
HSBC Holdings (HSBA) 510.30p 4.44%
Prudential (PRU) 965.80p 3.92%
Rio Tinto (RIO) 5,563.00p 3.73%
Anglo American (AAL) 3,289.50p 3.66%
Airtel Africa (AAF) 124.20p 2.81%
Antofagasta (ANTO) 1,364.00p 2.75%
Glencore (GLEN) 550.80p 2.32%
NATWEST GROUP (NWG) 260.50p 2.32%
Barclays (BARC) 161.00p 1.78%
FTSE 100 - Fallers
Halma (HLMA) 2,128.00p -6.30%
Sage Group (SGE) 786.00p -3.68%
Croda International (CRDA) 6,712.00p -2.78%
Ocado Group (OCDO) 617.00p -2.65%
Experian (EXPN) 2,869.00p -2.61%
Rentokil Initial (RTO) 535.60p -2.48%
Intertek Group (ITRK) 3,944.00p -2.42%
Dechra Pharmaceuticals (DPH) 2,674.00p -2.34%
United Utilities Group (UU.) 1,026.00p -2.33%
Severn Trent (SVT) 2,714.00p -2.27%
FTSE 250 - Risers
4Imprint Group (FOUR) 4,100.00p 3.27%
Energean (ENOG) 1,423.00p 2.74%
Vietnam Enterprise Investments (DI) (VEIL) 572.00p 2.66%
Schroder Asia Pacific Fund (SDP) 508.00p 2.42%
Fidelity China Special Situations (FCSS) 215.00p 2.38%
Templeton Emerging Markets Inv Trust (TEM) 144.80p 2.26%
Diversified Energy Company (DEC) 124.80p 2.21%
Warehouse Reit (WHR) 113.60p 2.16%
C&C Group (CDI) (CCR) 182.20p 2.13%
Investec (INVP) 518.20p 2.05%
FTSE 250 - Fallers
Wood Group (John) (WG.) 134.00p -15.93%
Petrofac Ltd. (PFC) 84.05p -10.06%
Renishaw (RSW) 3,658.00p -8.41%
Genus (GNS) 2,916.00p -5.54%
TI Fluid Systems (TIFS) 125.00p -5.16%
Molten Ventures (GROW) 377.80p -4.31%
IMI (IMI) 1,363.00p -4.28%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,245.00p -3.23%
Moneysupermarket.com Group (MONY) 189.90p -3.16%
Cranswick (CWK) 3,108.00p -2.94%