London Midday: FTSE Pushes Higher as Banks Rally

Stocks

Summary:

London stocks rose at midday as major banks rallied after passing the Bank of England’s stress tests, lifting the FTSE 100 by 0.4%. Fresh Nationwide data showed UK house prices continued to grow in November, while retailers cut prices ahead of Black Friday.

London stocks had pushed higher by midday on Tuesday, with banks leading the gains after they cleared the Bank of England’s stress tests.

The FTSE 100 was up 0.4% at 9,740.07, following a flat start to the session.

Investors were mulling the latest data from Nationwide, which showed house prices continued to rise in November, although the pace of growth eased slightly.

House prices grew by 1.8% year-on-year, down on October’s 2.4% spike but ahead of expectations for a 1.4% uplift.

Month-on-month, seasonally adjusted growth was 0.3%, also ahead of consensus, for 0%.

The average house price now stands at £272,998.

Robert Gardner, Nationwide’s chief economist, said: "Against a backdrop of subdued consumer confidence and signs of weakening in the labour market, this performance indicates resilience, especially since mortgage rates are more than double the level they were before Covid, and house prices are close to all-time highs."

In last month’s Budget, chancellor Rachel Reeves announced a council tax surcharge for properties valued at more than £2m.

However, Gardner said the so-called mansion tax was unlikely to have a "significant" impact on the housing market.

"The surcharge, which is not being introduced until April 2028, will apply to less than 1% of properties in England, and around 3% in London," he noted.

Looking forward, Nationwide said housing affordability was set to to improve "modestly", should income growth continue to outpace house price growth, as expected.

Gardner said: "Borrowing costs are likely to moderate a little further, if Bank Rate is lowered again in the coming quarters.

"This should support buyer demand, especially since household balance sheets are strong."

Investors were also digesting the latest shop price monitor from the British Retail Consortium and NIQ, which showed that shop prices fell in November as retailers started to launch their Black Friday deals and promotions.

In equity markets, Lloyds, Barclays, Standard Chartered and NatWest were among the top performers after the Bank of England said all seven of the biggest lenders passed its stress tests.

In its half-year Financial Stability Report, the Bank flagged increased risks to the UK’s financial system, including sky-high valuations of tech companies, while also trimming the amount of capital banks need to hold in reserve.

However, despite the heighted risk climate, the BoE opted to cut capital requirements for the UK’s biggest banks after they passed its latest stress tests.

It found that the sector was well capitalised, and that UK household and corporate aggregate indebtedness remained low. As a result, the BoE lowered the appropriate benchmark for the level of Tier 1 capital requirements to 13% from 14%, the equivalent to a CET1 ratio of around 11%. Analysts had been largely expecting the reduction.

Russ Mould, investment director at AJ Bell, said: "The UK banking sector has passed the Bank of England’s stress test with flying colours.

"The industry and authorities learned some valuable lessons from the global financial crisis in 2008 and banks have subsequently become stronger entities. No-one wanted a repeat of what happened 17 years ago when various banks had to be bailed out. That crisis led to UK banks being pushed to have more capital to withstand any shocks.

"The latest stress test means that major UK banks would be able to cope with a severe decline in the economy and provide ongoing support to consumers and businesses.

"Importantly, the stress test results have given the Bank of England confidence to cut its estimate of how much capital banks need to hold. The government will no doubt welcome this news, given its desire to encourage more lending to drive economic growth."

Elsewhere, Ladbrokes owner Entain rose after an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan.

Persimmon and Taylor Wimpey were both high risers after an upgrade to ‘outperform’ from ‘sector perform’ by RBC Capital Markets. In a broader note on the UK housebuilding sector, RBC said the vital statistics of the UK housing market are in good shape.

"Mortgage approvals for house purchase and housing transaction levels suggest a normal market and house prices are surprisingly stable," it said. "The UK housing market, like many of us, has been fitter in the past, but it is certainly a long way from being on life support."

British Land advanced after Panmure Liberum upgraded the shares to ‘buy’ from ‘hold’ and lifted the price target to 490p from 424p, citing rent reversion upside.

Victrex shot to the top of the FTSE 250 as the polymers group said it has launched a "profit improvement plan" targeting £10m of savings, after underlying earnings dropped 21% over the 12 months to 30 September.

On the downside, Berkeley and Barratt Redrow lost ground after RBC Capital downgraded the stocks to ‘underperform’ from ‘outperform’ and to ‘sector perform’ from ‘outperform’, respectively.

Source: Sharecast

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Winkelmann

Commodity

Economic

The European steel industry is positioned for a significant 2026 rebound after bottoming in 2025, with benchmark hot rolled coil (HRC) prices forecast to reach $750/t, up more than $100/t from third quarter lows of $650/t, according to analysts at Jefferies in a note dated Tuesday.

The brokerage projects diversified steel giant ArcelorMittal will achieve €8.3 billion EBITDA in 2026 versus €8.2 billion consensus, Swedish specialty steelmaker SSAB SEK13.2 billion versus SEK13.1 billion consensus, and Austrian steel and technology group Voestalpine €1.7 billion versus €1.72 billion consensus.

This follows 2025 trough levels of €6.6 billion, SEK10.2 billion, and €1.5 billion respectively for the three producers.

The recovery hinges on the European Commission's October 7 proposal to slash steel import quotas by 50% to 18.3mT and double tariffs on non-quota volumes to 50% from 25%, effective July 2026.

This should reduce import penetration from 25% back toward 15% and boost domestic production by 10mT, driving industry operating rates up more than 10% from current 65-67% toward targeted 80-85% levels.

ArcelorMittal cited potential reductions of 8mT in flat steel imports and 2mT in long steel imports.

The Carbon Border Adjustment Mechanism (CBAM) beginning January 2026 will add €40–70/t to import prices, while Germany's €500 billion infrastructure program should boost demand 1-2% annually from 2027.

Every €50/t price increase would boost 2026 EBITDA by 20% for ArcelorMittal, 13% for SSAB, 15% for Voestalpine, 57% for German producer Salzgitter, and 24% for industrial conglomerate ThyssenKrupp.

A 5% volume increase would add 5-18% to EBITDA, with Salzgitter seeing the greatest upside at 18%.

Current pricing shows US HRC at $981.1/t, EU HRC at $712.7/t, and China export HRC at $457.0/t as of December 1.

Raw materials stand at iron ore $90.6/t and premium hard coking coal $172.6/t. ArcelorMittal has already raised December delivery prices to €630/t from July's €560/t trough.

However, European steel stocks already rallied substantially in 2025, with ArcelorMittal up 41.3% year-to-date, SSAB up 50.7%, Salzgitter up 65.2%, and Voestalpine up 58.5%, compared to the Stoxx600's 14% gain.

Valuation multiples re-rated by more than 1 turn to approximately 5x EV/EBITDA from 3.5x, now exceeding the 10-year average of 4.5x.

Jefferies cautioned that with 2026 forecasts broadly in-line with consensus, the market already assumes recovery reflecting more than $100/t price increases and 3-5% volume growth.

EU steel stocks are broadly pricing recovered 2026 and mid-cycle EBITDA on 10-year average multiples, the brokerage said.

For shares to work from current levels, actual volume and price-driven EBITDA upgrades need to materialize. The brokerage prefers SSAB in carbon steel and Spanish stainless producer Acerinox for 2026.

Source: Investing

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Gerik

Economic

Sharp Sales Decline Highlights Sector Fragility

China’s embattled real estate market is still in search of a floor, with November data pointing to a worsening slump. Industry figures revealed that the top 100 developers recorded a 36% year-on-year drop in property sales value. The magnitude of this decline illustrates the prolonged contraction in housing demand and reflects weakened buyer confidence, despite repeated policy support efforts.

Morgan Stanley further emphasized the severity of the downturn, estimating that average sales among 25 major developers declined by 42% compared to the same period last year. These figures suggest not just seasonal weakness but a deep-rooted structural deterioration that continues to weigh on the broader economy.

Analysts Sound Alarm Over Deteriorating Conditions

Hui Shan, chief China economist at Goldman Sachs, described the worsening property data as “real and concerning.” Her assessment underscores the causal relationship between persistent financial instability among developers, suppressed consumer sentiment, and delayed investment in residential property.

Despite multiple rounds of policy easing including interest rate cuts, relaxed home purchase restrictions, and liquidity support for developers the market has failed to respond in a meaningful way. The lack of recovery suggests that regulatory measures, while necessary, have yet to restore confidence or solve underlying imbalances in the housing sector.

A Market Bottom Remains Elusive

The continued slide in sales points to a protracted correction phase rather than a quick rebound. Key problems such as high developer debt, oversupply in lower-tier cities, and declining population growth compound the difficulty of restoring equilibrium in the sector. These issues contribute to a feedback loop of falling prices, eroded trust, and sluggish investment.

Without a visible turnaround in buyer sentiment or a breakthrough in developer financing, the market remains at risk of further decline. The downward trend in November sales extends a multi-year downturn that began in 2021, when policy tightening triggered the collapse of major property firms like Evergrande.

China’s property market, once a cornerstone of national economic growth, continues to contract under the weight of debt, oversupply, and policy fatigue. While stimulus efforts have provided temporary relief, the November data highlight a persistent lack of demand and entrenched investor pessimism. Until fundamental confidence is restored, the market is unlikely to find a firm bottom, posing continued headwinds to China's broader economic recovery.

Source: CNBC

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Gerik

Economic

Inflation Ticks Higher, Testing ECB’s Rate Cut Outlook

According to flash data from Eurostat, euro zone headline inflation reached 2.2% in November, slightly up from October’s 2.1% and above the 2% target of the European Central Bank (ECB). The figure marginally exceeded market expectations of 2.1% and signals that inflationary pressures, while moderating overall, have not fully subsided.

This modest increase follows months of deceleration from the peak inflation levels observed in 2022 and 2023. The uptick presents a challenge for the ECB’s easing trajectory, which began earlier this year after rates peaked at a record 4% in 2024.

Core Inflation Holds Steady, But Services Remain Elevated

Core inflation which strips out volatile components like energy, food, alcohol, and tobacco remained stable at 2.4% in November. This stability suggests that underlying price pressures are not intensifying, aligning with the ECB’s earlier assertion that inflation is gradually cooling.

However, a closer look at inflation components shows persistent pressure in the services sector, which recorded an annual increase of 3.5%, up from 3.4% in October. This marginal rise in service inflation reflects ongoing wage dynamics and demand resilience, and could be a key factor preventing more aggressive rate cuts. The causal link between higher labor costs and service inflation underscores why the ECB remains cautious despite progress in headline inflation.

ECB Sticks to a Measured and Data-Driven Path

The ECB has maintained its deposit facility rate at 2% for the third consecutive meeting, signaling a pause in its rate-cutting cycle. The last cut, executed in June 2025, followed inflation’s brief drop to the 2% target. Since then, policymakers have opted for a meeting-by-meeting approach, citing the need to remain data-dependent amid lingering uncertainties.

ECB President Christine Lagarde recently emphasized that the euro zone is in a "good place" in terms of monetary policy. However, she noted that the outlook is not fixed, and the ECB will act as necessary to maintain stability. This nuanced stance indicates that the bank sees the current level of interest rates as broadly appropriate but remains open to further adjustments based on incoming data.

Policy Outlook: Balanced Between Optimism and Vigilance

While the November inflation reading does not suggest a reversal in the broader disinflation trend, it highlights the delicate balance the ECB must strike. The slight increase in headline inflation, coupled with stubborn service sector prices, may delay further easing unless clear evidence of deceleration emerges in early 2026.

The causal relationship between inflation stickiness and ECB policy inertia is becoming more evident. With core inflation still above target and service inflation climbing, any hopes for near-term rate cuts may be premature.

Although inflation in the euro area remains close to the ECB’s target, the November data serve as a reminder that the path to price stability is not linear. As long as service inflation remains high and core prices resist further declines, the central bank is likely to tread carefully. Investors should brace for a prolonged period of policy watchfulness, where inflation metrics not forward guidance will determine the pace and scope of future rate moves.

Source: CNBC

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Michelle

Political

Commodity

India's imports of Russian oil may decline for only "a brief period" as Moscow plans to boost supplies, using sophisticated technology to avert the impact of Western sanctions, Kremlin spokesperson Dmitry Peskov said on Tuesday.

His remarks came ahead of President Vladimir Putin's two-day visit to New Delhi from Thursday, looking to restore defence and energy ties as the South Asian nation is set to trim its Russian oil purchases this month to at least a three-year low.

Russia's top buyer of seaborne oil, India has cut crude imports from Moscow under pressure from Western sanctions, particularly by Washington on Moscow's top oil producers Rosneft (ROSN.MM), opens new tab and Lukoil (LKOH.MM), opens new tab.

"There can be, for a very brief period of time, insignificant decreases in the volume of oil trade," Peskov told Indian journalists, in response to a question about the impact of sanctions.

WORKING TO BUILD THE NECESSARY ENVIRONMENT FOR BUYERS

Russia is the top oil supplier to India, the world's third biggest oil importer and consumer.

Moscow is working to build the "necessary environment" for buyers who seek its oil, Peskov said, speaking by video link organised by Russia's Sputnik news agency.

"We have deep experience in performing under regime of these illegal sanctions," Peskov added.

"We have our own technologies in doing that. We will continue to make those technologies more sophisticated should this practice of sanctions continue."

Trade between Russia and India should be secured from pressure from third countries, he said, adding that payment methods would feature in the leaders' talks.

ACTIVITIES OF INDIAN REFINERS

Indian refiners, such as Mangalore Refinery and Petrochemicals Ltd (MRPL.NS), opens new tab, Hindustan Petroleum Corp (HPCL.NS), opens new tab and HPCL-Mittal Energy Ltd, have stopped buying Russian oil.

State-run Indian Oil Corp (IOC.NS), opens new tab has placed orders to buy Russian oil from non-sanctioned entities, while Bharat Petroleum Corp is in an advanced stage of negotiations for Russian oil imports.

Russia-backed Indian refiner Nayara Energy, partly owned by Rosneft, is exclusively processing Russian oil after other suppliers pulled back, following British and EU sanctions.

Russia wants India to continue to provide support to Nayara to boost its local sale and capacity use.

Reliance Industries Ltd (RELI.NS), opens new tab, formerly Russia's top Indian client, has said it loaded Russian oil cargoes "precommitted" by October 22, and will process any arriving after November 20 at its refinery geared to domestic supply.

Source: Reuters

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Warren Takunda

Economic

The pair fell from 1.1380 to 1.1360 in the minutes following news HICP inflation for November came in slightly higher than expected at 2.2%, up from 2.1% in October.

This is ahead of consensus expectations for an unchanged reading. Core inflation held steady as expected at 2.4%.

The data underscores the European Central Bank's commitment to keeping interest rates unchanged for the foreseeable future, which offers the euro a fundamental source of support against currencies belonging to central banks where rates will be lowered.

The Bank of England is expected to cut interest rates in December and once again before April, creating an interest rate convergence between the EU and UK that weighs on pound-euro.

"In the UK, we expect rates to be 1% lower by the end of 2026, whereas market pricing looks for a 60bp fall. The UK has more room to cut rates than others and is likely to use it, which won’t help the pound in 2026," says Kit Juckes, chief FX analyst at Société Générale.

The details of the Eurozone's inflation report are what probably clinched the FX reaction, as they suggest there's an element of stickiness in the services sector that risks keeping inflation above the ECB's 2.0% target.

"The upside surprise was driven by somewhat less of a drag from energy than expected, which came in at -0.5% y/y (our forecast: -0.8%), while services was also slightly higher than expected at 2.5%," notes Bill Diviney, Senior Eurozone Economist at ABN AMRO.

The euro has started the week on the offensive against the pound and dollar, but analysts at Barclays think the 2025 selloff in GBP/EUR is set to reverse.

They say "last week's budget generates scope for an, at least partial, unwind of the pound's fiscal risk premium."

It adds that "a relatively warm reception" by the Labour party to the budget is important to consider, in that it allays near-term risks of political instability.

"The back-loading of fiscal tightening implies execution and credibility risks, but we think these are already adequately priced," says Barclays.

Importantly, Barclays also doesn't see the Bank of England cutting more than two more times in the current cycle, whereas the more bearish views on GBP rest with a belief the Bank will cut further.

"Terminal rate pricing of just under 3.5% for Bank Rate (including a 25bp cut in December) also remains appropriate, in our view, as the macro outlook over the Bank's policy horizon is largely unchanged," says Barclays.

Source: Poundsterlinglive

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Glendon

Cryptocurrency

Bitcoin's support weakens below $83,300, crucial levels await near $66,900.
UTXO data highlights Bitcoin's vulnerability beneath critical $83,300 price point.
Bitcoin faces potential struggles as support dips below key thresholds.

Bitcoin's price dynamics show critical support levels may be far below current market levels. Recent data suggests that under the price of $83,300, the cryptocurrency faces a significant lack of support, with the next potential floor lying around $66,900.

Lack of Support Below $83,300

Recent insights into Bitcoin's price behavior reveal that there is minimal UTXO (Unspent Transaction Output) activity below the $83,300 range. The UTXO Realized Price Distribution (URPD) data, partitioned by past all-time highs, reveals a notable concentration of Bitcoin transactions in the higher price ranges. This suggests that market participants holding Bitcoin at lower levels might be less inclined to sell, leading to a possible price vacuum below this critical threshold.

According to @ali_charts, Bitcoin's market might encounter resistance and struggle to maintain its value until it hits $66,900, where more substantial support might exist. This observation comes from the distribution of Bitcoin transactions at various price points, where it's clear that after $83,300, there is a noticeable drop in activity until the $66,900 level.

The UTXO data, broken down by previous ATH prices, shows that Bitcoin transactions above the $83,000 mark were significantly more active, leading to higher liquidity at those levels. However, below that point, the bars representing UTXO volume shrink drastically. As Bitcoin approaches this price zone, there are fewer buyers or holders ready to defend the asset at these lower levels.

Key Price Points for Bitcoin's Market Stability

What is evident from the UTXO Realized Price Distribution is that Bitcoin's value is vulnerable when it falls below certain thresholds. While there has been strong support at previous ATH levels, the absence of similar support beneath $83,300 raises concerns. Should Bitcoin dip into the lower price levels, reaching closer to $66,900, it could be met with more substantial buying interest, stabilizing its price.

Bitcoin's price behavior is shaped by the concentration of UTXOs at specific price points. Understanding these dynamics is crucial for market participants looking to forecast price movements. The current analysis suggests that Bitcoin may face some challenges in the short term unless it maintains momentum above the $83,300 mark.

The current market sentiment reflects the concerns of investors as they weigh the risk of falling below critical support levels. Bitcoin has historically shown strong recovery from dips, but with less support below certain thresholds, any future price movements will depend heavily on the market's reaction to these critical levels.