London midday: Stocks flat ahead of key US, UK earnings

The FTSE 100 was steady at 7,911.46.

Russ Mould, investment director at AJ Bell, said: “One of the key issues is the gloomier picture for corporate earnings growth. Earnings drive share prices and the prospect of slower growth and/or squeezed margins doesn’t bode well for equities.

“In the US, all eyes are on the big tech names which report earnings throughout the week. Tuesday sees Microsoft, Alphabet and Visa report numbers, with Meta Platforms on Wednesday, and Amazon and Mastercard on Thursday. Cost-cutting has been a key driver for many of their share prices in recent months, yet investors will want to know that underlying business is still healthy otherwise the recent rally in US tech names could grind to a halt.”

“We’re also getting updates from companies that provide popular food and drink products, namely Coca-Cola which reports today and PepsiCo and McDonald’s tomorrow. They are expected to have seen resilient demand given their low-price points.”

On home shores, investors were mulling the latest house price index from Rightmove, which showed that house prices eased in April.

On a monthly basis, average asking prices rose by just 0.2% to £366,247, down from 0.8% growth in March and lower than the average of 1.2% at this time of year.

Rightmove said the unseasonal pricing restraint “is a sign that many new sellers are taking note of the economic headwinds and the transitioning of the housing market to a slower pace and more normal activity levels, last seen in the pre-pandemic market of 2019”.

On a year-over-year basis, meanwhile, prices were up 1.7% in April, down from 3% growth a month earlier.

The average asking price for first-time buyers rose 0.2% on the month in April and 2% on the year to a record £224,963.

Tim Bannister, Rightmove’s director of property science, said: “Agents are reporting that many sellers have transitioned out of the frenzied multi-bid market mindset of recent years and understand the new need to tempt Spring buyers with a competitive price.”

“The current unexpectedly stable conditions may tempt more sellers to enter the market who had been considering a move in the last few years but had been put off by its frenetic pace. Buyers may have struggled to find a home that suited their needs in the stock-constrained market of recent years and will now find more choice available.”

“However, those who have now decided to make a move should not wait around too long to make an enquiry if they see the right home for sale, as not only is the number of sales agreed now back to pre-pandemic levels, but homes are also on average selling twelve days more quickly than at this time in 2019.”

In equity markets, online fashion retailer ASOS (LON:ASOS) was under the cosh after it emerged that ShadowFall had built a £4m short position in the company.

On the upside, retailers gained, with JD Sports (LON:JD), Burberry (LON:BRBY) and Next (LON:NXT) all higher.

Wizz Air (LON:WIZZ) flew higher after a rating upgrade by Citi, while homeware retailer Dunelm (LON:DNLM) was lifted by an upgrade at Stifel.