London pre-open: Stocks seen up ahead of ECB announcement

by | Sep 14, 2023

(Sharecast News) – London stocks were set to rise at the open on Thursday as investors eyed the latest policy announcement from the European Central Bank.
The FTSE 100 was called to open around 15 points higher.

The ECB rate decision is due at 1315 BST. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: “Not earlier than the beginning of this week, the expectation for today’s European Central Bank (ECB) meeting was a no rate hike.

“Today, just a few hours before the meeting, the pricing is pointing at a 25bp hike as the most likely scenario; money markets are pricing in a 68% chance for a 25bp hike.”

On home shores, housebuilders were likely to be in focus as the latest Residential Market Survey form the Royal Institution of Chartered Surveyors showed that house prices fell sharply last month, with higher mortgage rates continuing to hit home.

The net balance for house prices fell from -55 in July to -68 last month, the most negative reading since February 2009.

New buyer enquiries slipped to -47 from -45, with new sale instructions falling to -26 from -17.

Respondents also reported a decline in newly agreed sales, from -45 to -47 – the weakest reading since the early stages of the pandemic.

Simon Rubinsohn, Rics’ chief economist, said: “The latest round of feedback from Rics members continues to point to a sluggish housing market with little sign of any relief in prospect.

“Buyer enquiries remain under pressure against a backdrop of economic uncertainty and the high cost of mortgage finance. Meanwhile, prices are continuing to slip, albeit that the relatively modest fall to date needs to be seen in the context of the substantial rise recorded during the pandemic.

“Critically, affordability metrics still remain stretch in many parts of the country.”

Looking ahead, respondents expected sales to remain subdued, although the balance did turn marginally less negative, at -38 compared to -45 a month previously.

In equity markets, online travel platform Trainline launched a £50m share buyback as ticket sales grew by almost a quarter in the first six months of its financial year.

Group net ticket sales grew 23% year-on-year to £2.6bn in the six months to August 31, driving growth in group revenue of 19% to £197m.

UK consumer net ticket sales were £1.7bn, up 19% as more people switched to digital ticketing and passenger numbers continued to recover after the Covid pandemic.

“Growth was tempered somewhat by ongoing industrial action in the UK, with 11 strike days in the first half – estimated gross ticket sales impact of £5-6m per strike day,” Trainline said.

Elsewhere, real estate group LondonMetric Property said it was selling four multi-let industrial estates in the East Midlands for £40.5m.

The portfolio, which consists of 435,000 square feet across 47 units in total, is part of the Mucklow group which LondonMetric acquired in 2019, at which time the four assets were valued at £30.9m. LondonMetric has now disposed of 35% of the original Mucklow portfolio.

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