London midday: Stocks maintain gains as Kingfisher, Kainos rally
London stocks were still firmly in the black by midday on Monday as investors brushed aside concerns about global growth and inflation, at least for now.
The FTSE 100 was 1% higher at 7,464.66
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "A note of resilience has struck the FTSE 100 and FTSE 250 as the flight away from more risky high growth stocks continues amid continued worries about high inflation.
"The fight being waged by central banks to limit the consequences of rampant inflation is playing on investors’ minds, and many are seeking out defensive positions in mining, energy and healthcare."
A survey out earlier form Rightmove showed that house prices continued to push higher in May, hitting a fresh record as lack of supply weighed heavily.
The average asking price of a property coming to market hit a fourth consecutive record in May, rising 2.1% on the previous month to £367,501, the highest for the time of year since May 2014. Year-on-year the price jumped 10.2%. In April, prices rose 1.6% month-on-month and 9.9% year-on-year.
Average asking prices have now risen by £55,551 in the past two years, Rightmove said, compared to a rise of just £6,218 in the two years leading up to the pandemic.
The property portal said the latest increase had been caused by supply failing to keep up with still buoyant demand. The number of buyers contacting estate agents in May was 31% higher than pre-pandemic levels, though it was down 14% year-on-year.
In contrast, the number of available properties was down 16% year-on-year, and tumbled 55% compared to 2019.
Tim Bannister, director of property science at Rightmove, said: "People may be wondering why the housing market is seemingly running in the opposite direction to the wider economy. What the data is showing us is that those who have the ability to do so are prioritising their home and moving, and the imbalance between supply and demand is supporting rising prices.
"We anticipate that the effects of the increase costs of living and rising interest rates will filter through to the market later in the year, and combination of more supply of homes and people weighting up what they can afford will help to moderate the market."
In equity markets, B&Q owner Kingfisher rallied after it reiterated annual guidance as it reported an expected fall in first-quarter sales and announced a £300m share buyback. The company said total group sales fell 5.8% to £3.2bn in the three months to April 22, in line with its expectations, against tough comparators last year when a DIY boom amid Covid lockdowns boosted revenues.
IT provider Kainos surged after its full-year results and following an upgrade to ‘buy’ from ‘hold’ at Canaccord.
Moonpig was also a high riser after agreeing to buy UK gifting group Buyagift for £124m.
Victoria Scholar, head of investment at Interative Investor, said: "Shares in Moonpig have jumped more than 13% as investors cheer the acquisition of this cash generative, high growth business. While Moonpig is best known for selling greetings cards online, its plans to expand further into gifts via this acquisition could help broaden its product offering and boost margins, particularly for some of the more expensive add-on products beyond its bread and butter.
"Moonpig is also likely to benefit from significant synergies as the two businesses overlap and come together to save costs. After an initial surge on IPO day last year, Moonpig shares have struggled alongside other UK tech companies like TGH. With shares down around 40% since the January high, today’s acquisition comes as a welcomed update for investors and arguably could mark the start of a more bullish phase for the online greetings cards business."
Flutter and Entain were both on the front foot after Australia's Crown Resorts agreed to be taken over by private equity firm Blackstone in a £5bn deal.
On the downside, Intertek was knocked lower by a downgrade to ‘hold’ at Stifel.
FTSE 100 - Risers
Dechra Pharmaceuticals (DPH) 3,570.00p 3.48%
Vodafone Group (VOD) 125.16p 3.35%
Anglo American (AAL) 3,635.50p 3.18%
Intermediate Capital Group (ICP) 1,440.00p 3.15%
Flutter Entertainment (CDI) (FLTR) 9,462.00p 2.98%
Entain (ENT) 1,443.00p 2.85%
Aveva Group (AVV) 2,239.00p 2.75%
Kingfisher (KGF) 253.20p 2.59%
3i Group (III) 1,253.00p 2.58%
Croda International (CRDA) 6,894.00p 2.44%
FTSE 100 - Fallers
Intertek Group (ITRK) 4,709.00p -3.88%
Smurfit Kappa Group (CDI) (SKG) 3,043.00p -1.71%
Rolls-Royce Holdings (RR.) 82.15p -1.39%
Sainsbury (J) (SBRY) 229.50p -1.38%
B&M European Value Retail S.A. (DI) (BME) 418.60p -0.90%
WPP (WPP) 953.20p -0.77%
Tesco (TSCO) 258.30p -0.77%
Imperial Brands (IMB) 1,779.50p -0.61%
Next (NXT) 6,094.00p -0.59%
Harbour Energy (HBR) 448.90p -0.58%
FTSE 250 - Risers
Kainos Group (KNOS) 1,266.00p 22.67%
Moonpig Group (MOON) 255.00p 8.51%
Syncona Limited NPV (SYNC) 187.60p 5.99%
Auction Technology Group (ATG) 956.00p 5.87%
Pantheon International (PIN) 295.50p 5.54%
Ninety One (N91) 231.60p 5.27%
Bridgepoint Group (Reg S) (BPT) 299.80p 5.19%
Virgin Money UK (VMUK) 147.25p 4.36%
Hochschild Mining (HOC) 110.40p 4.15%
Rank Group (RNK) 103.20p 4.14%
FTSE 250 - Fallers
Quilter (QLT) 120.92p -14.97%
Allianz Technology Trust (ATT) 213.00p -3.18%
Capricorn Energy (CNE) 198.70p -1.63%
Johnson Matthey (JMAT) 2,322.00p -1.61%
Marks & Spencer Group (MKS) 134.80p -1.53%
TUI AG Reg Shs (DI) (TUI) 198.60p -1.44%
Sirius Real Estate Ltd. (SRE) 112.40p -1.23%
Polar Capital Technology Trust (PCT) 1,866.00p -1.06%
Aston Martin Lagonda Global Holdings (AML) 662.80p -0.96%
Coats Group (COA) 74.70p -0.93%