London close: Fed, BoE nerves set as stocks finish flat

Stocks finished Tuesday's trading session flat as another jump in oil prices added to nerves ahead of monetary policy meetings at the Federal Reserve and Bank of England in the coming days.

London's FTSE 100 finished under 0.1% higher after struggling for direction for most of the day.

The Federal Open Market Committee is to meet later this evening and due to announce its interest-rate decision on Wednesday afternoon. While they are widely expected to keep rates unchanged, given recent data showing a slight cooling of the US economy, markets will be on the lookout for any indication of future monetary policy.

The Bank of England will follow suit on Thursday, and is predicted to hike rates a further 25 basis points to 5.5%, though it remains to be seen whether this will be the peak for rates in the current cycle.

Consumer price index data out on Wednesday will be closely watched, and any upside surprise could reignite fears of rates staying higher for longer.

Oil prices jump... again

The recent surge in oil prices is a big cause for concern for policymakers, with inflation still trending substantially higher than their targets. Brent crude was up 1.1% at $95.36 a barrel as it nears its 52-week high of $99.56.

Recent extensions to production cuts in Russia and Saudi Arabia, along with heightened demand from China, has triggered a near-30% jump in the price of oil over the past three months.

"At a time when central banks are starting to see the light at the end of the inflation tunnel, $100+ oil will be incredibly unwelcome and unhelpful," said analyst Craig Erlam from Oanda.

"I'm not sure there's much economic sense in tipping the global economy into recession if OPEC+ persevered with these cuts, which makes me question how high the price will go and how sustainable it will be."

Kingfishers sink on profit warning

B&Q and Screwfix owner Kingfisher lost more than a tenth of its market value on Tuesday after the DIY retail conglomerate warned shareholders that it would have to scale back profit guidance this year.

The company, which owns a host of DIY brands across Europe, said full-year adjusted profit before tax is now likely to be in the region of £590m, down from a previous target of £634m and significantly lower than the £758m reported a year earlier. The group cited worsening conditions in Poland as well as continued struggles in France.

Not even the announcement of a £300m new share buyback programme could please the market, with shares down 12% at 208p by the close – its lowest level in nearly a year.

Other retailers were also struggling on the FTSE 100, including JD Sports Fashion and B&M.

Hargreaves Lansdown jumped 5% after the savings and investment company reported a 50% surge in yearly profits to £402.7m, along with an 8% increase in assets under administration to £134bn.

Other financial services stocks were in demand, with Phoenix Group rebounding after underwhelming the market with its half-year results on Monday. Lloyds was also on the up.

Online grocer and technology company Ocado rose 1% after maintaining annual guidance following a rise in third-quarter retail revenues. The company, 50% owned by Marks & Spencer, said retail sales came in at £569.6m from £531m a year earlier, with a return to positive volume growth in the last month of the quarter.

Market Movers

FTSE 100 (UKX) 7,658.45 0.07%
FTSE 250 (MCX) 18,433.21 -0.09%
techMARK (TASX) 4,345.40 -0.28%

FTSE 100 - Risers

Hargreaves Lansdown (HL.) 802.60p 4.92%
Marks & Spencer Group (MKS) 228.80p 2.83%
3i Group (III) 2,085.00p 1.86%
Phoenix Group Holdings (PHNX) 535.00p 1.63%
Lloyds Banking Group (LLOY) 42.84p 1.61%
WPP (WPP) 764.40p 1.57%
Centrica (CNA) 172.65p 1.56%
Ocado Group (OCDO) 799.20p 1.55%
Associated British Foods (ABF) 2,085.00p 1.31%
Land Securities Group (LAND) 582.00p 1.29%

FTSE 100 - Fallers

Kingfisher (KGF) 208.00p -11.71%
Burberry Group (BRBY) 2,058.00p -4.37%
Convatec Group (CTEC) 215.60p -2.44%
Entain (ENT) 1,088.00p -2.38%
Antofagasta (ANTO) 1,421.50p -2.30%
Croda International (CRDA) 4,850.00p -1.96%
JD Sports Fashion (JD.) 133.40p -1.95%
Halma (HLMA) 2,070.00p -1.90%
BT Group (BT.A) 116.00p -1.86%
B&M European Value Retail S.A. (DI) (BME) 555.00p -1.74%

FTSE 250 - Risers

Ceres Power Holdings (CWR) 366.00p 7.58%
C&C Group (CDI) (CCR) 139.20p 5.45%
SThree (STEM) 374.50p 4.32%
NCC Group (NCC) 105.00p 3.96%
Bridgepoint Group (Reg S) (BPT) 195.10p 3.39%
TBC Bank Group (TBCG) 2,970.00p 3.13%
Hipgnosis Songs Fund Limited NPV (SONG) 84.40p 2.93%
TUI AG Reg Shs (DI) (TUI) 479.80p 2.74%
W.A.G Payment Solutions (WPS) 93.80p 2.40%
Lancashire Holdings Limited (LRE) 610.50p 1.92%

FTSE 250 - Fallers

Marshalls (MSLH) 260.00p -3.70%
888 Holdings (DI) (888) 115.70p -3.58%
IWG (IWG) 155.30p -3.36%
Essentra (ESNT) 144.40p -3.09%
easyJet (EZJ) 421.90p -2.81%
Bytes Technology Group (BYIT) 473.20p -2.63%
Genuit Group (GEN) 316.50p -2.62%
Wizz Air Holdings (WIZZ) 1,938.50p -2.61%
Target Healthcare Reit Ltd (THRL) 75.90p -2.57%
Digital 9 Infrastructure NPV (DGI9) 58.00p -2.52%