What to watch: Housing stocks up, markets slide, IAG and NatWest results

Tom Belger
·Finance and policy reporter
·4 min read
EMBARGOED TO 0001 FRIDAY OCTOBER 30 File photo dated 01/02/18 of houses under construction. The number of new homes registered to be built by the UK's housebuilders in the first three-quarters of 2020 was down by 30% on the same period last year, according to an industry body.
The number of new homes registered to be built by the UK's housebuilders in the first three-quarters of 2020 was down by 30% year-on-year. Photo: PA

Here are some of the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

Housebuilders leap as UK property prices jump

Stocks in leading housebuilders jumped on Friday as UK house price growth hit a five-year high in October, despite the wider economy losing steam.

According to data released on Friday from Nationwide, the average property sold for £227,826 ($294,031) in October, up 0.8% month-on-month and 5.8% year-on-year — the biggest leap since January 2015.

It came as a leading industry body said registrations of planned new homes in the third quarter were down only 4% on a year earlier.

Warranty and insurance provider the National House Building Council (NHBC) said registrations in the nine months to the end of September were down 30%, however.

Housebuilders Persimmon (PSN.L) and Barratt Developments (BDEV.L) were among the biggest risers on the FTSE 100 (^FTSE) in early trading on Friday, up 1.6% and 0.7% respectively.

Watch: Why are house prices rising during a recession?

Better-than-expected European GDP data limits market losses

European stocks were trading lower and Wall Street looked set for fresh declines on Friday, with stronger-than-expected GDP data in Europe only partially offsetting coronavirus concerns.

Futures contracts shortly before European markets opened suggested leading indices were set for a continued rout, but better-than-expected flash estimates for third-quarter GDP reined in losses.

France, Italy, Germany and Spain all saw quarter-on-quarter growth beating analysts’ expectations in figures released on Friday morning in Europe.

The FTSE 100 (^FTSE) in London and the DAX (^GDAXI) in Frankfurt were both down 0.1% in London after opening 0.7% and 1% lower respectively. The CAC 40 (^FCHI) dropped by 0.8% at the open in Paris, but was up 0.4% by mid-morning as third-quarter GDP surged 18.2% quarter-on-quarter.

WATCH: Strong GDP data limits European sell-off

European markets had seen a calmer day on Thursday after three days of declines. European Central Bank (ECB) policymakers signalled there was fresh stimulus to come in December. Its governing council had said it would “recalibrate its instruments, as appropriate, to respond to the unfolding situation.”

But president Christine Lagarde acknowledged the eurozone economy was “losing momentum more rapidly than expected,” and tighter restrictions sparked a market sell-off as they were announced in Germany, France, and Switzerland on Wednesday.

The market rout had continued in Asia overnight. China’s Shanghai Composite (000001.SS) shed 1.5%. Japan’s Nikkei (^N225) fell 0.8%, ending its worst week in three months. Hong Kong Hang Seng (^HSI) lost 0.5%.

US futures pointed to a renewed sell-off on Wall Street. The S&P 500 (ES=F) and Dow Jones indices (YM=F) were both down 1.3% and the tech-heavy Nasdaq (NQ=F) was down 1.8% at around 9.30am in the UK.

NatWest CEO promises dividends 'as soon as possible'

The boss of NatWest Group (NWG.L) has signalled the bank will hand cash to shareholders as soon as regulators allow it.

“We have very strong capital ratios,” Alison Rose told journalists. “It’s my intent to start paying dividends as soon as possible.”

Rose’s promise came as third quarter results at the bank showed bumper capital reserves. The bank’s CET1 ratio — a key measure of cash and cash equivalents on the balance sheet — was 18.2% in the quarter, up from 16.2% a year earlier. The ratio was well above the market average.

NatWest reported better-than-expected third quarter results on Friday, sending shares surging to the top of the FTSE 100 (^FTSE).

Pandemic plunges British Airways owner IAG to £5bn loss this year to date

The owner of British Airways has nosedived to a €6.2bn (£5.6bn, $7.2bn) pre-tax loss for the first nine months of the year, compared with a profit of €2.3bn a year ago, as the pandemic continues to create turbulence in the travel industry.

International Consolidated Airlines Group (IAG.L) has so far slashed 10,000 jobs across the company in a cost-cutting exercise, with most of the losses occurring across British Airways and Aer Lingus. The group also owns Iberia and Vueling.

The FTSE 100 company said the results were “significantly impacted by the outbreak of COVID-19, which has had a material impact on the global airline and travel sectors, particularly from late February 2020 onwards and with no immediate signs of recovery.”

The group added that passenger capacity in its third quarter was 78.6% from last year, and 64.3% lower for the nine month period compared to 2019.

WATCH: ECB chief Christine Lagarde prepared to boost stimulus