1st Jul 2025 12:04
(Alliance News) - London's stocks were mostly a notch lower at midday on Tuesday, dragged down by housebuilders after a soft UK house price reading, and as industrial firms brace for the introduction of a new business rates levy.
The FTSE 100 index was down 14.49 points, 0.2%, at 8,746.47. The FTSE 250 was down 23.51 points, 0.1%, at 21,602.75, and the AIM All-Share was up 3.33 points, 0.4%, at 773.98.
The Cboe UK 100 was down 0.3% at 872.02, the Cboe UK 250 was down 0.1% at 19,138.20, and the Cboe Small Companies was down 0.6% at 17,460.09.
"Housebuilders retreated after disappointing housing data from Nationwide which said average UK prices fell by 0.8% month-on-month in June," commented AJ Bell analyst Dan Coatsworth.
"Housebuilders have been pinning their hopes on a more robust property market driven by lower mortgage rates. Changes to stamp duty in April might have simply caused a short-term blip in activity and it certainly doesn't look as if the property market is going into a major decline."
Across the UK, the typical property value in June was GBP271,619, Nationwide Building Society said. The annual rate of house price growth slowed to 2.1% in June, from 3.5% in May.
Barratt Redrow was down 2.7% around midday, while Persimmon fell 2.2% and Taylor Wimpey was 2.4% lower.
Meanwhile, industrial firms in the UK are to be hit with nearly GBP700 million in new property taxes, offsetting some of the UK government's move to slash their energy bills to boost competitiveness, experts have warned.
Just a week after the government's industrial strategy revealed electricity costs for about 7,000 energy-intensive businesses would be cut by scrapping green levies, estimates suggest many of the larger firms are set to see their business rates bill soar.
Around 4,300 large-scale industrial properties in England – across manufacturing sectors such as automotive, aerospace and chemicals – will face a new business rates levy costing them around GBP685 million a year, according to tax and software firm Ryan.
The levy, which comes into effect in April, is part of next year's business rates revaluation and is being used to fund tax breaks for high street retail, leisure and hospitality sectors, Ryan said.
In European equities on Tuesday, both the CAC 40 in Paris and the DAX 40 in Frankfurt faded 0.4%.
The pound was quoted higher at USD1.3781 at midday on Tuesday in London, compared to USD1.3701 at the equities close on Monday. The euro stood at USD1.1812, up from USD1.1747. Against the yen, the dollar was trading lower at JPY142.93 compared to JPY144.31.
The UK manufacturing sector remained in contraction territory in June, numbers on Tuesday showed, though the downturn eased to its least negative reading in five months.
The S&P Global UK manufacturing purchasing managers' index picked up to 47.7 points in June, from 46.4 points in May, though it remained below the 50-point neutral mark. The reading was unchanged from last week's flash estimate.
Output, new orders and employment all contracted, but the rates of decline eased. Business optimism also improved to a four-month high.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.6%, the S&P 500 index up 0.5%, and the Nasdaq Composite also 0.5% higher.
The yield on the US 10-year Treasury was quoted at 4.20%, narrowing from 4.27%. The yield on the US 30-year Treasury was quoted at 4.74%, narrowing from 4.82%.
XTB analyst Kathleen Brooks commented: "Trump threatened to increase tariffs saying that Japan remained unwilling to accept US rice exports. This is a sign that the US president is willing to play hardball with trading partners, even though we are days away from the 9th July deadline to reach agreements. So far, there are no signs that Japan will cave in to the US demands.
"The White House has said that it will 'set the rate' for countries that do not come to the negotiating table in good faith. However, there are reasons for optimism. On Tuesday, the EU said that it would accept a 10% universal tariff on most of its exports, although it was looking for exemptions on autos, steel and aluminium. Reports suggest that an interim agreement between the currency bloc and the US will be completed in time before the deadline, which would allow discussions to continue."
Gold was quoted up at USD3,348.19 an ounce at midday in London on Tuesday against USD3,286.04 late Monday.
Brent oil was quoted higher at USD66.78 a barrel from USD66.42.
Britain's energy watchdog on Tuesday gave the provisional green light to an initial GBP24 billion of investment to upgrade UK energy infrastructure over the RIIO-3 period between 2026/27 and 2030/31.
Over GBP15 billion will ensure the continued safe operation of Great Britain’s gas transmission and distribution networks, Ofgem said.
A further GBP8.9 billion is set to be committed to the nation's high-voltage electricity network, which Ofgem said will power the biggest expansion of the grid since the 1960s, with another GBP1.3 billion being earmarked.
This includes GBP4.2 billion for National Grid and GBP3.1 billion for SSE, Ofgem said.
National Grid said it will review the draft determination to assess whether it delivers an "investable overall financial package."
The firm continues to expect to invest around GBP60 billion over the five years to March 2029 across the group.
But SSEN Transmission, which is 75%-owned by SSE, felt the draft determination did "not go far enough" to deliver the framework required to unlock the "unprecedented levels of investment needed to deliver lower and more stable bills."
SSE said the approach to setting baseline total expenditure allowances fails to fund the investment required for a clean power system by 2030.
National Grid was up 1.9% around midday in London, while SSE edged up 1.5%.
Burford Capital rose 18%.
The litigation finance provider with offices in London and New York highlighted "two significant developments" on Tuesday. First, Burford noted the US Senate Parliamentarian on Monday ruled that proposed tax provisions relating to litigation finance are not eligible for inclusion in the budget reconciliation bill.
Also on Monday, Burford had noted the US District Court for the Southern District of New York ordered Argentina to transfer its class D shares in energy company YPF SA, around 51% of YPF's outstanding shares, to a global custody account at Bank of New York Mellon Corp within 14 days and to instruct BNYM to transfer those shares to Petersen Energia Inversora SA and Eton Park Capital Management LP within one business day. Petersen and Eton Park are plaintiffs represented by Burford.
The claims relate to Argentine government-controlled energy company YPF, of which a majority of 51% was renationalised in 2012 after having conducted an initial public offering. "While this is a positive development in the enforcement campaign against Argentina, it is entirely possible that it will be the subject of further judicial proceedings," Burford allowed.
At the other end, Standard Chartered was among the FTSE 100's biggest losers, slipping 2.9%.
The London-based, Asia and Africa-focused lender faces a lawsuit filed in Singapore on Monday that seeks more than USD2.7 billion from the bank over its alleged role in the theft of funds from Malaysia's sovereign wealth fund, the Financial Times reported on Tuesday.
The company is accused by liquidators of 1MDB of failing to conduct required anti-money laundering checks, the FT said, citing "people with knowledge of the claim". The lawsuit claims that between 2009 and 2013, StanChart permitted more than 100 intra-bank transfers that helped to conceal the flow of billions of dollars of funds stolen from 1MDB.
The FT said StanChart told it in a statement that it had not yet received the claim documents and it "emphatically rejects any claims" by the 1MDB companies.
Still to come on Tuesday's economic calendar, the US manufacturing PMI at 1445 BST.
By Emily Parsons, Alliance News reporter
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