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Highlights:
- London Stocks Set for Decline: The FTSE 100 is expected to open lower as investors analyze revised UK GDP growth of 0.5% for Q2.
- Housing Market Shows Resilience: Nationwide reports house prices rose by 3.2% annually in September, marking the fastest growth in two years.
- Corporate Developments: Weir Group secures a £25 million contract for phosphate projects, while QinetiQ plans a £112 million site sale, improving net debt.
London's stock market is anticipated to open lower on Monday, as investors digest the latest data on UK GDP and house prices. The FTSE 100 index is projected to open approximately 10 points down, reflecting concerns over the slower economic growth reported for the second quarter of the year.
Recent figures from the Office for National Statistics revealed that the UK economy grew by 0.5% in the three months leading up to June, a downward revision from the previous estimate of 0.6%. This adjustment highlights the challenges the economy faces as it navigates through a period of uncertainty, influencing market sentiment as investors react to the slower-than-expected growth.
In contrast to the subdued GDP figures, the latest survey from Nationwide showed a more optimistic trend in the housing market. House prices in the UK increased at their fastest annual rate in two years during September, rising by 3.2% year-on-year. This growth follows a 2.4% increase in August and marks the highest rate since November 2022. Month-on-month, house prices also saw a 0.7% rise, recovering from a 0.2% decline the previous month. The average house price stood at £266,094 in September, up from £265,375 in August.
Robert Gardner, Nationwide's chief economist, noted that income growth has continued to outpace house price growth, while borrowing costs have declined. This trend suggests that potential homebuyers are finding improved affordability, leading to a modest uptick in housing activity and prices, although both remain below historic averages.
In corporate news, Weir Group (LSE:WEIR) announced a significant contract win, securing a £25 million agreement to provide services for the next phase of OCP's Benguerir and Louta greenfield phosphate projects in Morocco. This contract aims to support the ongoing construction of the Louta project and significantly increase production at the Benguerir site.
Additionally, QinetiQ (LSE:QQ) revealed plans to sell its 407-acre freehold site at Cody Technology Park to a fund managed by Tristan Capital Partners for £112 million. The transaction is expected to enhance QinetiQ's net debt position by approximately £65 million, though it will also result in a one-off non-cash accounting loss of around £30 million due to lease accounting adjustments.
