(Sharecast News) - London stocks rose in early trade on Friday following solid gains on Wall Street, as investors continued to cheer an easing in US inflation.
At 0845 GMT, the FTSE 100 was up 0.6% at 7,676.70.
Richard Hunter, head of markets at Interactive Investor, said: "The personal consumption expenditures price index is the Federal Reserve's preferred inflation measure and revealed the slowest annual increase for almost three years in January. The core monthly increase of 0.4% led to an annual rate of 2.8%, down from a previous 2.9% and excluding food and energy prices. Meanwhile, the headline numbers were both in line with estimates, rising by 0.3% and 2.4% respectively.
"The figures were met with some relief, especially given recent CPI and PPI readings which came in hotter than expected, thus igniting fears of a reacceleration of inflation. The news provides the potential for an interest rate cut in June to still be on the table, even if at the broadest level there are few signs of a weakening US economy, let alone one which is veering towards recession. The situation therefore remains finely balanced, and the Fed's previous mantra of 'higher for longer' looks increasingly prescient given the current showings from economic data."
On home shores, data released earlier by Nationwide showed that annual house prices returned to growth in February for the first time in more than a year following a dip in borrowing costs.
House prices rose by 1.2% on the year following a 0.2% decline in January.
On the month, prices were up 0.7%, the same as in January, with the average price of a home standing at £260,420, versus £257,656.
Nationwide said house prices are now around 3% below the all-time highs recorded in the summer of 2022, after taking account of seasonal effects.
Nationwide chief economist Robert Gardner said: "The decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market. Indeed, industry data sources point to a noticeable increase in mortgage applications at the start of the year, while surveyors also reported a rise in new buyer enquiries.
"Nevertheless, near-term prospects remain highly uncertain, in part due to ongoing uncertainty about the future path of interest rates. After falling sharply in late December, swap rates, which underpin fixed rate mortgage pricing, have drifted back up.
"Borrowing costs remain well below the highs recorded last summer but, if the recent upward trend is sustained, it threatens to restrain the pace of any housing market recovery.
"While the squeeze on household budgets is easing, with wage growth now outstripping inflation by a healthy margin, it will take time to make up for the ground lost over the past few years, especially given consumer confidence remains fragile."
Separate figures showed that retail footfall plunged last month as the unusually wet weather kept shoppers at home.
According the latest BRC-Sensormatic IQ Footfall Monitor, footfall slumped 6.2% in February, compared to a 2.8% decline a month earlier.
Within that, high streets recorded the biggest decline, with footfall down 9.3% from a more modest 2.3% fall in January.
But shopping centres and retail parks were also affected, with footfall off 7% and 5.8% respectively.
According to the Met Office, nearly a third more rain than usual fell in February, with some parts of the country experiencing record-breaking levels.
Helen Dickinson, chief executive of the British Retail Consortium, said: "Footfall experienced its biggest fall since the pandemic. One of the wettest Februarys on record, exacerbated by train strikes at the start of the month, meant shoppers visited fewer stores, with high streets one of the most significant declines.
"London, where footfall had been outperforming other major cities in the UK, saw one of the most significant declines."
In equity markets, education publisher Pearson rallied as it said it expected 2024 earnings to be in line with expectations after reporting a rise in annual profits driven by strong demand for its English language courses and extending its share buyback by £200m.
ITV surged to the top of the FTSE 250 after the broadcaster said it had sold its entire 50% stake in streaming service BritBox International to its joint venture partner BBC Studios for £255m in cash.
On the downside, Rightmove slumped as the property portal warned that customer numbers were likely to decline this year amid uncertainty about interest rates and mortgage borrowing costs.
Specialist engineer IMI lost ground even as it reported a 12% jump in 2023 profits and forecast higher earnings this year, driven by a strong order book.
Market Movers
FTSE 100 (UKX) 7,676.70 0.61%
FTSE 250 (MCX) 19,150.12 0.50%
techMARK (TASX) 4,375.61 0.15%
FTSE 100 - Risers
Pearson (PSON) 991.00p 3.16%
Vodafone Group (VOD) 71.00p 2.72%
SEGRO (SGRO) 862.80p 2.06%
Lloyds Banking Group (LLOY) 47.52p 2.04%
International Consolidated Airlines Group SA (CDI) (IAG) 150.20p 2.00%
Entain (ENT) 930.60p 1.93%
Anglo American (AAL) 1,729.80p 1.69%
Airtel Africa (AAF) 96.40p 1.63%
Barclays (BARC) 167.08p 1.59%
Glencore (GLEN) 381.10p 1.59%
FTSE 100 - Fallers
Rightmove (RMV) 546.40p -3.57%
IMI (IMI) 1,703.00p -1.73%
Mondi (MNDI) 1,395.50p -0.92%
Relx plc (REL) 3,433.00p -0.81%
Frasers Group (FRAS) 802.50p -0.80%
Ocado Group (OCDO) 507.60p -0.74%
Smurfit Kappa Group (CDI) (SKG) 3,354.00p -0.71%
GSK (GSK) 1,655.00p -0.58%
Marks & Spencer Group (MKS) 236.10p -0.30%
Unite Group (UTG) 958.00p -0.21%
FTSE 250 - Risers
ITV (ITV) 63.92p 14.27%
Dr. Martens (DOCS) 99.00p 4.10%
LXI Reit (LXI) 102.00p 2.98%
Future (FUTR) 628.00p 2.53%
Bank of Georgia Group (BGEO) 4,825.00p 2.44%
HGCapital Trust (HGT) 450.00p 2.27%
Pagegroup (PAGE) 462.60p 2.25%
Shaftesbury Capital (SHC) 126.50p 2.10%
TBC Bank Group (TBCG) 3,020.00p 2.03%
Pennon Group (PNN) 674.00p 1.89%
FTSE 250 - Fallers
Essentra (ESNT) 162.40p -2.52%
Oxford Instruments (OXIG) 2,135.00p -2.29%
Marshalls (MSLH) 293.20p -2.07%
SThree (STEM) 410.00p -1.91%
Indivior (INDV) 1,683.00p -1.87%
Spectris (SXS) 3,448.00p -1.63%
Syncona Limited NPV (SYNC) 123.00p -1.60%
Rathbones Group (RAT) 1,532.00p -1.54%
Hilton Food Group (HFG) 786.00p -1.50%
Playtech (PTEC) 437.00p -1.44%