The FTSE 100 was in the green on Wednesday in London, even as fresh data from online real estate portal Zoopla projected the biggest dip in housing sales for a decade in 2023.
The monthly monitor found that sales volumes were down 20% so far compared with 2022 and forecast sales to be the lowest since 2012 by the end of the year.
This has followed a dip in housing prices as mortgage rates ratchet up amid a period of persistently high inflation and central bank rate hikes.
“It is the number of sales that have been hit hardest by higher borrowing costs, especially amongst mortgage reliant buyers,” said Richard Donnell, executive director at Zoopla.
The report also found that house price growth has slowed to its lowest rate in 12 years as people are priced out of buying by rising mortgage rates. Buyer demand fell by more than a third in the four weeks to Aug 20, according to the data. That was compared to the same period over the last five years.
Meanwhile, fresh Bank of England data shows that mortgage approvals dipped 10% in July, to 49,400 from 54,600 in June. June saw mortgage rates hit fresh highs.
This came with a rise in the value of borrowing which hit £200m in July, up from June's £100m.
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Chris Beauchamp from IG gives his take on the chilled US markets:
Yesterday’s solid gains have given way to a more muted atmosphere today, but the sense of a slowing US jobs picture has been given a boost by the ADP report’s miss this afternoon. With GDP data also softer there has been a further strengthening of hopes that the Fed won’t be too keen to hike again this year, though any cuts in rates are still far off.
And a look-forward to September:
August could well go out with a whimper, but investors won’t be sad to see the month go. The trouble is that September isn’t often much better. After the solid gains of the year so far some more consolidation looks likely, especially in potentially-overstretched markets like the Nasdaq and the Nikkei, both of which have been among the big winners in 2023
Here's LaToya Harding with an update on our trending tickers for today
More on this morning's Zoopla data: London is leading house price falls, reports Rabina Khan --
Local housing markets across the South of England are leading on annual price falls, particularly in commuter areas close to London. Commuter areas close to London and the South of England have seen the largest house price falls. With Hertfordshire, Three Rivers (-2.5%), Hertsmere (-2.4%), Watford (-2.4%) and St Albans (-2.3%) losing up to £14,640 off the average sale price.
Here’s Zoopla’s 10 UK locations where house prices are falling the most in August 2023:
Airline stocks mostly steady despite travel chaos
Airline stocks have had an almost blasé reaction to mayhem in UK airports. A single corrupted flight plan caused the crash of the entire air traffic control system, meaning bevies of cancelled summer holidays.
Is crypto back?
Crypto prices are popping today after investment shop Grayscale took a step closer to clinching approval for a Bitcoin exchange-traded fund. The SEC had denied its application to convert the Grayscale Bitcoin Trust to an ETF.
A spot bitcoin ETF would be traded through a traditional stock exchange, although the bitcoin would be held by a brokerage, and would allow investors to gain exposure to the world’s biggest cryptocurrency without having to own the coin themselves. The SEC has only so far allowed crypto ETFs based on futures, as it says they are safer.
The SEC can still fight the decision by taking it to a full slate of judges on the DC Circuit Court of Appeals or the US Supreme Court for review.
Bitcoin (BTC-USD) was trading 5.6% higher by 9.40am in London, at around the $27,450 mark.
Bitcoin's 5-day price movements. Chart: Yahoo Finance UK
And it's not just Bitcoin that's up. As Bloomberg's Joe Weisenthal points out, it was a market-wide move yesterday:
Finalto's chief market analyst Neil Wilson has some words of caution on the sea of green in markets today:
Don‘t get too excited just yet - I refer to Jay Powell’s comments at Jackson Hole: “So far, job openings have declined substantially without increasing unemployment—a highly welcome but historically unusual result that appears to reflect large excess demand for labour”. But it probably means the Fed holds next month rather than feels pressured to hike again.
Joining the dots on employment and inflation, he also noted that “there is evidence that inflation has become more responsive to labour market tightness than was the case in recent decades.” Hence he can argue: “Evidence that the tightness in the labour market is no longer easing could also call for a monetary policy response”. In short, he’s looking at the labour market more closely than ever and this will not necessarily mean openings matter if unemployment stays as low as it is.
Prudential's (PRU.L) London listed stock headed higher on Wednesday morning in London following its results, as it said its exposure to the collapsed Silicon Valley Bank is minimum and had a small impact on its balance sheet.
Prudential 5-day look. Chart: Yahoo Finance
Meanwhile it benefitted from a rise in Chinese investors buying insurance products in Hong Kong. This wave sent first-half operating profit up 3.6%.
The profit numbers, which Jefferies analysts said came in slightly above consensus, drove Prudential's shares up 3.8% by mid-morning. It's currently the top performer in the FTSE.
Watch: Zoopla says number of UK property sales on track to fall to lowest level in a decade