FTSE 100 Live 07 April: Federal Reserve minutes chill markets, house price growth continues

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US indexes open lower on Fed concerns

US stock indices dipped lower on Thursday, as concerns over a more hawkish Federal Reserve position on inflation and the ongoing conflict in Ukraine dampened growth.

The Dow Jones Industrial Average fell 57.3 points, or 0.17%, to 34,439.24, before sliding lower to 34,370.18 in the first hour of trading.

Both the S&P 500 and the Nasdaq Composite also opened lower, but recovered slightly, with the S&P trading 1.33 points higher at 4482.48 and the Nasdaq up 4.29 points at 13,893.11.

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FTSE trading lower as housebuilders and oil stocks dip

The FTSE is trading 11 points lower this lunchtime, at 7,576.65, with housebuilders among the highest fallers.

News that a number of developers had put more than £ 1 billion aside to cover fire safety remediation work pushed Barrett and Persimmon down 3.24% and 1.52% respectively.

Redrow shares were down 0.65% and Bellway fell 0.9% during the morning’s trading.

Meanwhile, the energy sector was in the red, as Shell’s $ 5billion hit from its withdrawal from Russia weighed on oil producers.

In the US, futures on the S&P 500 rose 0.2% and futures on the Nasdaq 100 rose 0.3%, with futures on the Dow Jones Industrial Average remaining steady, suggesting the market will open higher this morning.

The euro rose 0.2% to $ 1.09, while the pound rose 0.1% to $ 1.31.

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888 negotiates lower fee for William Hill’s UK business

Betting firm 888 Holdings has knocked £ 250 million off the price it is willing to pay for the European arm of rival William Hill, citing “changes in the macro economic and regulatory environment” and the looming UK gambling license review.

The company announced on Thursday morning that it now valued William Hill’s assets at between £ 1.95 billion and £ 2.05 billion, down from the £ 2.2 billion 888 had initially agreed to pay last September.

Read more.

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CBI calls for help on energy bills

Business chiefs have called on the government to provide immediate cash to help cut energy bills for consumers ahead of the publication of its long-awaited energy strategy.

The Confederation of British Industry said while the energy strategy, which is expected to be unveiled later today, will address some long term issues, ministers need to address immediate problems of energy affordability.

Rain Newton-Smith, chief economist at the CBI, said the government should cut bills for energy intensive industries to maintain competitiveness.

“Kickstarting an ambitious national program for household energy efficiency upgrades should follow this strategy too – making people’s bills more affordable and cutting carbon across the country,” she added.

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PwC cuts UK growth forecast as Deutsche Bank warns of recession risk

UK growth forecasts were slashed today as a top investment bank warned Britain could be heading for recession.

PricewaterhouseCoopers (PwC) said UK economic growth is now expected to be 3.8% this year, revised down from 4.5% projected before the Russian invasion of Ukraine.

The average UK household is set to be £ 900 worse off this year, with the lowest earners facing a £ 1300 cut to income as real wages fall about 2%.

Separately, Deutsche Bank warned the risk of a recession in the UK was rising. It estimates the UK economy will contract by 0.2% in the April to June quarter, rebound in the third quarter, then flatline by the end of the year as energy bills rise.

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FTSE 100 falls, Countryside shares slide after warning

House prices are still rising, but investors hoping to see building firms reap the benefits continue to be frustrated amid a challenging few months for the sector.

Valuations are being depressed by the interest rate outlook and cladding remediation costs, with shares in housebuilders Vistry and Bellway both lower today after becoming the latest firms to commit to the government’s fire safety pledge.

Their share price falls were small compared to another big slide for urban regeneration business Countryside Partnerships, which slid 12% after including a profits warning alongside the results of a review of its 128 operational sites.

Stand-in boss John Martin said: “Management has identified a number of areas where we can raise our game and our team is moving quickly to improve performance.”

He said there remained significant market demand for the company’s homes, adding that large parts of the group continue to trade strongly.

Countryside’s previous boss left in January in the wake of a 50% drop in first quarter profits. Shares today fell 32.4p to 246.2p and are down 46% this year.

They topped the fallers board in the FTSE 250 index, which stood 20.79 points lower at 21,079.94. Other stocks on the back foot included paving business Marshalls after raising £ 187 million from investors at a discount of 6% to last night’s closing price.

The proceeds are being used to fund its move into the roofing market after agreeing to buy Marley for £ 535 million. Analysts at Davy called the deal transformational both financially and strategically, but shares still dipped 41p to 651.5p.

The FTSE 100 index fell 16.42 points to 7571.28, not helped by interest rate rise expectations in the US and a number of stocks trading without the right to the latest dividend.

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FTSE 100 lower, gaming firm 888 surges 28%

The FTSE 100 index is 18.25 points lower at 7569.45, not helped by several blue-chip stocks trading without the right to their latest dividend.

The ex-dividend stocks on the FTSE 100 fallers board include Aviva, Lloyds Banking Group, Abrdn and Mondi.

Ladbrokes gaming business Entain also fell 31.5p to 1590p, despite a first quarter update in which chief executive Jette Nygaard-Andersen reported a good performance across all areas of the business.

The biggest risers in London’s top flight included Airtel Africa and Sainsbury’s with gains of 2%, while AstraZeneca continued its strong recent performance by adding another 1% to 10,606p.

The FTSE 250 index fell 16.33 points to 21,084.40, but 888 Holdings surged 28% after it secured a reduced price for the UK assets of bookmaker William Hill.

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Will rate rises tip US into recession?

Wall Street is now pricing in a more than 80% chance that the Federal Reserve will raise rates by half a percentage point at its May meeting, the first time it has moved by such a large amount since 2000.

UBS Global Wealth Management notes that futures markets are pointing to 220 basis points of rate rises this year, on top of the quarter point increase from March.

However, the bank’s chief investment officer Mark Haefele does not believe the rate rises will tip the US into recession.

He said: “We expect the Fed to hike at 50 base points at each of the next two meetings. Beyond that, we think it will become apparent that inflation is slowing, allowing the Fed to hike at a more gradual pace.

“Household balance sheets are strong, and we still see momentum from an end to Covid-19-related restrictions.”

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Average house price up 1.4% in March

Average UK house prices rose again in March for the ninth month in a row, with the 1.4% increase of £ 3,860 reported by Halifax today the biggest jump since last September.

The annual rate of house price inflation of 11% continues to track around its highest level since mid-2007, leaving the average of £ 282,753 up some £ 28,113 on a year ago.

Halifax managing director Russell Galley said: “The story behind such strong house price inflation remains unchanged: limited supply and strong demand, despite the prospect of increasing pressure on households’ finances.”

Today’s figures show that the South West has overtaken Wales as the UK area with strongest annual house price inflation, at 14.6%.

The South East also recorded a big increase, with growth at 11.6% and an average price of £ 385,790. Prices in the region have now risen by £ 40,177 over the last year, the first time any English region outside of London has ever posted a £ 40,000-plus rise over 12 months.

London continued its recent upward trend, with prices now up by 5.9% year-on-year to an average price of £ 534,977.

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