FTSE 100 makes a positive start as inflation worries ease; miners lead the early charge

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  • The FTSE 100 was virtually unchanged
  • House prices booming
  • Berkeley Group the best performer in the housebuilding sector

The Halifax Price Index indicated UK house prices rose 1.4% in April, taking the annual increase in house prices to a five-year high of 8.2%.


The April rise follows a 1.1% increase in March, which in turn followed a zero-change month in February.


“The marked rise in house prices in April reported by Halifax ties in with stronger data from Nationwide. Nationwide reported that house prices rose 2.1% month-on-month in April, to record the largest monthly increase since February 2004. This followed a dip of 0.3% month-on-month in March. House prices had previously bounced back 0.7% month-on-month in February after a dip of 0.1% month-on-month in January, which had been the first monthly fall in house prices since last June. The year-on-year change in house prices rebounded to a four-month high of 7.1% in April after moderating to 5.7% in March from 6.9% in February and a peak of 7.3% in December, which had been the highest since November 2014,” said Howard Archer, the chief economic advisor to the EY ITEM Club.


“The housing market had been coming off the boil early in 2021 after gaining substantial momentum during the second half of 2020. The Bank of England reported that mortgage approvals for house purchases fell back to an eight-month low of 82,735 in March from 87,385 in February, 96,645 in January, 100,546 in December and 103,126 in November, which had been the highest level since August 2007. Approvals had previously risen for six successive months through to November’s more-than 13-year high from a record low of 9,486 in May 2020,” he added.


“The Chancellor announced new supportive measures for the housing market in the Budget at the start of March and latest survey evidence suggests that this has given the housing market renewed life,” Archer added.


The FTSE 100 was virtually unchanged after a solid start.


Berekeley Group Holdings PLC (LON:BKG), up 1.9% at 4,841p, was the best performing stock of the housebuilders.




8.30am: Miners lead the advance


The FTSE 100 made a tentative, but positive start to proceedings as the immediate threat from inflation evaporated with the release of Friday’s worse-than-expected employment figures.


“In an example of bad news being good news, the lower figure calmed the inflation and interest rate fears which had been overshadowing the markets’ recent progress,” said Richard Hunter, head of markets at Interactive Investor.


“Indeed, there may be evidence of a labour supply shortage in addition to blocks in the supply chain, both of which indicate that the strength of the recovery is encountering pressure points as it may be outpacing the availability of materials and workers.”


That said, the commodity traders of Asia didn’t seem to get the memo.


Regional prices for items such as rebar, the reinforced steel bar beloved by the Chinese construction industry, iron ore and copper were indicative of a super-hot recovery.


On the equity market here in the UK, the miners led the charge.


Anglo American (LON:AAL) topped the Footsie risers with a 3.3% gain followed by majors BHP (LON:BHP), Rio Tinto (LON:RIO) and Antofagasta (LON:ANTO), the Chilean copper digger. Prices were up between 2.6% and 3%.


International travel concerns grounded stock in the airlines with easyJet (LON:EZJ) off 3.7%, followed by Wizz Air (LON:WIZZ) and BA owner IAG (LON:IAG).


6.50 am: Footsie expected to open in the green


The FTSE 100 appears likely to open in the green, taking its cue from Asia’s main bourses.


Perversely, Friday’s lacklustre US employment data appeared to provide the buy signal with the economic hiccup easing inflationary fears haunting international markets.


On the commodities market, the price of a barrel of West Texas crude edged up to US$65 a barrel following a cyber attack on the software controlling one of America’s most important oil pipelines.


Shanghai Steel rebar futures opened 10% higher, iron ore was 7.7% higher, while copper gained 2%.


“So, while the US Non-Farm Payrolls post-mortems continue, as far as Asia is concerned, the global recovery is Thunderbirds Are Go,” said Jeffrey Halley, analyst at the forex group ONANDA.


Closer to home, Scottish National Party secured a resounding victory in the polls.


However, it was still not enough to win an overall majority at Holyrood.


The pound rose strongly against international currencies as the forex markets decided that independence had become harder for Nicola Sturgeon and her team to win.


Looking ahead, and it is expected to be another busy week for corporate news – both here at home and in the US.


Upcoming are figures from BT Group (LON:BT.A), Burberry (LON:BRBY), Greggs (LON:GRG), TUI (LON:TUI) and Disney (NYSE:DIS).


Around the markets


  • Pound US$1.404 (+0.43%)
  • Bitcoin US$59,118.40 (+1.43%)
  • Gold US$1,834.00 (+0.15%)
  • Brent crude US$68.69 (+0.41%)

6.50am: Early Markets – Asia / Australia


Stocks in the Asia-Pacific region were mixed on Monday as iron ore futures in Singapore jumped more than 10% to hit a fresh record high of US$226 a tonne while gold climbed to a three-month high of US$1840 an ounce.


The Hang Seng index in Hong Kong dipped 0.45% while the Shanghai Composite in China slipped 0.37%.


In Japan, the Nikkei 225 rose 0.47% and South Korea’s Kospi jumped 1.59%.


Shares in Australia advanced, with the S&P/ASX 200 trading 0.95% higher near its record high.


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Proactive Australia news:


Brookside Energy Ltd (ASX:BRK) (OTCMKTS:RDFEF) has passed a major milestone with Jewell Well in the SWISH Area of Interest (AOI) of Oklahoma’s world-class Anadarko Basin successfully spudded on the evening of May 8, 2021, by Latshaw Rig 14 after completion of rig-up and equipment testing.


Rimfire Pacific Mining NL (ASX:RIM) has drilled a diamond hole at the Transit prospect in central NSW to follow up an intersection of 61 metres at 10 g/t gold from 60 metres returned in a reverse circulation (RC) hole.


Kingston Resources Ltd (ASX:KSN) (FRA:RZZ) has received encouraging new gold and silver results from an ongoing 8,000-metre resource drilling program at Kulumalia, at the southern end of the main Umuna orebody of its flagship 3.6 million ounce Misima Gold Project in PNG.


Pantoro Limited’s (ASX:PNR) (FRA:RKN) ongoing drilling at Scotia Mining Centre within the Norseman Gold Project has returned several deep high-grade intersections from inside and outside of the inferred mineral resource envelope.


Matsa Resources Limited (ASX:MAT) (FRA:KB2) samples have revealed extensive gold anomalism with a peak value of 10.95 g/t gold at Devon Prospect within Lake Carey Gold Project in Western Australia.


Twenty Seven Co Ltd (ASX:TSC) has closed its partially-underwritten renounceable rights issue strongly oversubscribed, raising around $2.7 million.


Perpetual Resources Ltd (ASX:PEC) has signed a memorandum of understanding (MoU) with a supplier of end product inputs to a range of high-end glass producers in China for the purchase of 400,000 tonnes per annum of high-grade silica sand from the Beharra Project in Western Australia.


Comet Resources Ltd (ASX:CRL) has received a drilling permit for the Santa Teresa Gold Project in Baja California, Mexico, paving the way for the start of a proposed 2,000-metre diamond drilling program later this quarter.


Castillo Copper Ltd (ASX:CCZ) (LON:CCZ) (FRA:7OR) is set to begin its aggressive 2021 exploration program at Mt Oxide Copper Project in northwest Queensland coinciding with a “massive global transformation” in the copper market.

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