The average UK house price has risen above £300,000 for the first time, according to figures by mortgage lender Halifax.
The milestone was reached after a bigger-than-expected 0.7% month-on-month increase.
The FTSE 100 index is mixed amid more Wall Street tech weakness, particularly for Amazon after quarterly results.
FTSE 100 Live Friday
- House price milestone
- Amazon shares slide
- AI-disrupted stocks fall
Market update: Lenders support FTSE 100, data sell-off continues
09:58 , Graeme EvansAI disruption fears lingered over Relx and other data-led stocks today as the FTSE 100 index ended a record-breaking week in lacklustre fashion.
London’s top flight peaked at 10,481.54 on Wednesday, only to fall 0.9% yesterday and as far as 10,253.15 in today’s early dealings as investors reacted to fresh Wall Street tech sector jitters.
The FTSE 100 later stood 6.15 points higher at 10,315.37, with Barclays and Centrica among those offering support after gains of 1.5%.
Lloyds Banking Group and NatWest also put back 1.2p to 107p and 7.8p to 657.8p after falling yesterday on expectations for more Bank of England interest rate cuts.
They were given a further lift by signs of new year resilience in the house market as lender Halifax said the average UK price rose by a monthly 0.7% to top £300,000 for the first time.
The risk-averse handover from Wall Street followed a 1.2% fall for the S&P 500 and the post-bell reaction to Amazon results after it said it intended to increase capital expenditure to about $200 billion this year.
That was much higher than expected and meant that current quarter guidance for operating income between $16.5 billion and $21.5 billion was short of hopes.
Shares fell 11% in extended dealings, having fallen by 4% ahead of the closing bell as concerns continued to mount about AI valuations within the S&P 500.
The biggest fallers in London were financial data and software firms as they suffered more worries over a hit to earnings if clients switch to third party AI tools.
LexisNexis owner Relx, which has been one of the best performing stocks during four decades of the FTSE 100, fell by 5% or 112p to 2137p as it extended losses for the week to about 18%.
Accounting software group Sage dropped 4% or 33.4p to 837.8p, financial data firm Experian by 62p to 2559p and London Stock Exchange by 2% or 132p to 7454p.
Elsewhere in the FTSE 100, miner Glencore put back 5.1p to 480.35p after shares fell 7% yesterday on the collapse of Rio Tinto merger talks. Rio, which is prevented from making another approach for six months, dipped 21p to 6805p.
Glencore shares steady after Rio Tinto talks collapse
09:27 , Graeme EvansGlencore shares today steadied at 472.5p, having fallen by more than 7% yesterday on the disclosure that it is no longer in merger talks with Rio Tinto.
The Switzerland-based mining firm said Rio wanted to keep both the chairman and chief executive roles as part of its bid, which it said “significantly undervalued” its contribution to the combined group.
It also said it felt the potential offer did not adequately value its copper business and its potential for growth.
Glencore is a big producer of copper as well as other metals like cobalt and nickel while Rio Tinto is a major iron ore producer and also focuses on metals and minerals including diamonds and aluminium.
UK takeover rules prevent Rio Tinto from making another approach for the next six months, unless Glencore requests a lifting of the standstill.
City bank Berenberg said today: “While Rio Tinto has stepped away, we do not consider this situation to be over, and remain of the view that Rio Tinto could come back for Glencore, or BHP could table a bid, with Glencore’s copper business the key driver of the deal.
“We remain comfortable buyers of Glencore at current levels, and believe that the company must now “walk the walk” to deliver its targeted doubling of copper volumes to 1.6 million tonnes per annum.”
AI disruption fears continue to weigh on data stocks
08:51 , Graeme EvansData, advertising and software-related companies have suffered this week as investors fear a big hit to earnings if clients switch to third party AI tools.
Casualties have included London Stock Exchange, financial data firm Experian, accounting software business Sage and the LexisNexis owner Relx. Their shares fell by between another 2% and 4% in today’s session.
LSEG and Relx will have the opportunity to address the City’s concerns when they present annual results on 26 February and next Thursday respectively.
Dan Coatsworth, AJ Bell head of markets, said: “There are reasons why AI might not simply upturn all these industries in one fell swoop.
“A lack of trust in the accuracy of AI-sourced information is one reason. Relx and Sage, among others, already have customers’ trust and they’re deploying AI in their own businesses to make their lives, and clients’, easier.
“Another reason why third-party AI may not instantly destroy companies is the fact names like Relx have proprietary information that won’t suddenly be fed into AI models for anyone to view.”
TSB profits rise ahead of Santander takeover
08:19 , Graeme EvansBanking group TSB today said annual profits rose by a fifth ahead of its near-£3 billion takeover by rival Santander.
The surplus of £350.4 million came as costs fell and its income rose, but loans to customers dipped 0.2% to £36.3 billion in a “challenging lending market”.
TSB announced last night that chief executive Marc Armengol is to step down to head up its current Spanish owner Sabadell.
The move is set to coincide with TSB being bought by Santander, which the firms expect to happen during the first half of this year.
FTSE 100 falls, data stocks back under pressure
08:12 , Graeme EvansThe FTSE 100 index has followed yesterday’s decline of 0.9% with a fall of 0.4% or 41.73 points to 10,267.49.
Software and data stocks are back under pressure after last night’s US tech weakness, with LexisNexis business Relx down 3% or 74p to 2175p,
London Stock Exchange has fallen 4% or 311p to 7268p while Sage is down 3% or 27.2p to 844p.
The stocks were badly hit earlier this week amid fears over the impact of AI on data and software business models.
Software sell-off deepens, Wall Street seen lower
07:58 , Graeme EvansAbout $1 trillion has been wiped from the market value of the S&P 500 software index after it posted a fall of 21% from its 200-day average, IG said today.
The decline extended its seventh straight session last night as fears grow that new AI tools could disrupt business models.
IG added in its morning note to clients: “Investors continued to rotate out of expensive growth stocks into more defensive, value-oriented sectors such as consumer staples, energy and industrials, with rising short interest and falling hedge fund exposure adding to pressure.”
The platform said futures point to a slightly weaker start for Wall Street when trading resumes later today.
Amazon shares under pressure, Bitcoin steadies
07:51 , Graeme EvansAmazon shares are poised to open sharply lower after the tech giant said it intended to increase capital expenditure to about $200 billion this year.
That was much higher than Wall Street expected and meant current quarter guidance for operating income between $16.5 billion and $21.5 billion was short of hopes.
Shares fell 11% in extended dealings, having fallen by 4% ahead of the closing bell as concerns continued to mount about AI valuations within the S&P 500 index.
The benchmark fell for a third successive session, although support from outside the tech sector means it is still close to last month’s record high.
The risk-averse mood has also impacted Bitcoin, which yesterday suffered its worst session since the end of 2022 after a decline of 13%. It slid to $60,000 at one point but has since rallied to $65,062.
Average house price tops £300,000 amid regional variations
07:16 , Graeme EvansMortgage lender Halifax today said the UK’s average property price topped £300,000 for the first time in January.
The milestone for its house price index was reached after a better-than-expected 0,7% monthly increase, which followed a fall of 0.5% in December.
Annual growth in prices now stands at 1%, up from the previous month’s 0.4% to stand at an average £300,077. Nationwide recorded an average house price of £270,873 in its most recent report.
Over the past three years, Halifax said property prices had risen by 5.7%, or around £16,000, as higher interest rates and stretched affordability have kept growth muted.
By contrast, the three years from 2020 to 2023 saw prices climb nearly 19% or over £44,000, driven by ultra-low borrowing costs and the ‘race for space’.
Amanda Bryden, Halifax head of mortgages, said that activity levels show a resilient market but that affordability remains a challenge for many would-be buyers.
She added: “Broader economic conditions continue to provide some support. Wage growth has been outpacing property price inflation since late 2022, steadily improving underlying affordability.
“That’s a positive trend for buyers, and the long-term health of the market.
“And we’re now seeing more mortgage deals below 4%. If inflation continues to ease, there should be further gradual reductions as the year goes on.
“All in all, we still think house prices are likely to edge up between 1% and 3% this year.”
Halifax added that regional differences in house price performance have become more pronounced, with the South East, South West, London and Eastern England all seeing annual declines of more than 1%.
FTSE 100 seen lower, Bitcoin 5% higher but below $70,000
07:01 , Graeme EvansThe FTSE 100 index is set to remain in the red after Wall Street markets closed sharply lower last night.
Tech sector weakness meant the S&P 500 index posted a third consecutive decline with a fall of 1.2% and the Nasdaq Composite lost another 1.6%.
Amazon shares fell 4% and then shed another 11% in extended trading after its earnings and current quarter guidance disappointed investors.
The FTSE 100 index fell 0.9% or 93.12 points from Wednesday’s record to close at 10,309.22, with Glencore down 7.5% after the collapse of Rio Tinto merger talks.
The outlook for interest rate cuts beginning as soon as next month weighed on lenders as NatWest and Lloyds fell by more than 5%.
Commodity price volatility has continued, with gold at $4870 an ounce and silver 5% higher at $74.70. Bitcoin is at $65,949, having rallied 5% in Asia trading hours after yesterday’s worst session in three years saw a decline of 13%.
