FTSE 100 live: London markets end week on a high as Christmas run-up starts

The news moving markets in London today: The capital’s premier bluechip index climbed higher, as house prices increased again and manufacturing PMI data showed further recovery.

The FTSE 100 climbed over the one per cent mark by close of play, marking a good start to December, as Christmas is on the horizon.

London’s FTSE 250, which is more aligned with the UK domestic market, was up more than 0.8 per cent by close, ending the week similarly strongly.

Markets were encouraged by fresh manufacturing in the UK and China.

In Britain, the latest manufacturing PMI came in at at 47.2 in November. The figures showed that downturns in output and new orders eased, while cost-caution lead to lower employment.

Rob Dobson, Director at S&P Global Market Intelligence, said: “Although the downturn in production eased sharply in November, the latest PMI report brings little festive cheer when the finer details are considered.”

“With new order inflows and exports continuing to fall sharply, and clients destocking, a sustained meaningful growth revival still looks elusive.”

Meanwhile in China, the Caixin/S&P Global manufacturing purchasing managers’ index rose to 50.7 in November from 49.5 in October. This was above the 50.0 level that separates contraction from expansion and marked the fastest expansion in three months.

However, it contrasts with the official manufacturing PMI released on Thursday, which nudged down to 49.4 from 49.5. Capital Economics said: “At face value, the average of the two is consistent with factory activity remaining largely unchanged last month.

“But that may not be the case in practice – the hard data have held up better than survey-based measures lately.”

Market news

The headline on London’s markets this morning was the plummeting shares of Ceres Power, down more than 20 per cent after the open, and then 15 per cent by half-10. By close they had dropped below -10 per cent.

Ceres’ shares fell after a late update on Thursday evening in which it sneaked out a revenue warning.

It was a relatively quiet day on the corporate news front, but Nationwide’s latest house price index delivered good news, with Tesco being the biggest faller on the FTSE 100, down around 2.3 per cent.

After its shares plummeted yesterday, Dr Martens were up by more than six per cent.

House prices were up 0.2 per cent on the month following a 0.9 per cent increase in October. This was the third monthly rise in a row and ahead of expectations for a 0.4 per cent decline.

This will possibly give a new headache to the Bank of England’s rate-setters however, who are mulling when they should be cutting interest rates, as inflation continues to fall.

House prices continuing to increase despite higher rates, and therefore higher borrowing costs, will influence decision makers’ thinking. Any reduction in rates will likely encourage more Brits to buy property at a lower borrowing rate, which could increase prices further.

Nationwide chief economist Robert Gardner said: “There has been a significant change in market expectations for the future path of Bank Rate in recent months which, if sustained, could provide much needed support for housing market activity.”

“These shifts are important as they have led to a decline in the longer-term interest rates (swap rates) that underpin fixed rate mortgage pricing,” he said. “If sustained, this will help to ease the affordability pressures that have been stifling housing market activity in recent quarters, where the number of mortgage approvals for house purchases has been running at c.30% below pre-pandemic levels.”