London close: Markets finish higher as UK inflation slows
London stocks finished in the green on Wednesday, recovering from heavy losses in the previous session despite a continued slump in oil prices, as investors mulled the latest UK inflation data.
The FTSE 100 ended the session up 2.3% at 5,770.63, and the FTSE 250 was 1.21% firmer at 15,586.14.
Sterling was stronger against both of its major trading pairs, rising 0.22% on the dollar to $1.2316, and adding 0.51% against the euro to €1.1378.
Investors spent much of the session poring over the latest inflation figures from the Office for National Statistics, which showed UK consumer price growth fell to 1.5% in March from 1.7% the month before, as fuel and clothing prices fell in the run-up to the coronavirus lockdown.
The data was in line with expectations.
“Clothing prices normally rise between February and March as new year discounting ends,” said ONS head of inflation Mike Hardie.
“However, this year the price of clothes has eased due to some retailers offering discounts due to decreased footfall in stores before the lockdown started.
“The cost of raw materials for manufacturers fell significantly over the year, driven by a global fall in the price for crude oil, which is at its lowest level since early 2016.”
Meanwhile, oil prices remained firmly in focus after Brent crude fell below $16 a barrel, hitting the lowest level since 1999.
“Oil futures prices should turn around once demand picks up for the physical product but that looks a couple of months away given the gradual lockdown easing policies afflicting most economies," said London Capital Group analyst Jasper Lawler.
Prices were picking up towards the end of the session, however, with Brent crude last up 5.29% at $20.41 per barrel, and West Texas Intermediate 16.52% higher at $13.86, in volatile trading.
In equity markets, building materials group CRH was up 6.7% after reporting a rise in first-quarter like-for-like sales and announcing a series of cost-cutting measures, including 25% pay cuts for leadership teams and board members.
It also reaffirmed its final dividend of 63 euro cents a share.
Power generation company Drax Group surged 15.97% after saying that core profit for 2020 should be in line with market expectations despite a potential £60m hit from the coronavirus pandemic, although the customer business is expected to make a loss.
On the downside, British Gas owner Centrica was knocked 3.67% lower by a downgrade to ‘hold’ from ‘buy’ at Jefferies, while Sage was off 0.57% after a downgrade to ‘sell’ at Goldman Sachs.
Market Movers
FTSE 100 (UKX) 5,770.63 2.30%
FTSE 250 (MCX) 15,586.14 1.21%
techMARK (TASX) 3,485.80 0.61%
FTSE 100 - Risers
Ashtead Group (AHT) 1,803.50p 7.64%
CRH (CRH) 2,292.00p 6.70%
Polymetal International (POLY) 1,627.50p 6.48%
Antofagasta (ANTO) 777.00p 6.32%
Intermediate Capital Group (ICP) 980.50p 6.17%
BP (BP.) 310.75p 6.00%
Royal Dutch Shell 'A' (RDSA) 1,385.20p 5.74%
Fresnillo (FRES) 759.60p 5.50%
Taylor Wimpey (TW.) 135.10p 5.22%
National Grid (NG.) 939.60p 4.94%
FTSE 100 - Fallers
BAE Systems (BA.) 510.40p -4.53%
easyJet (EZJ) 585.40p -3.97%
Centrica (CNA) 30.21p -3.67%
Burberry Group (BRBY) 1,349.00p -2.88%
Pearson (PSON) 450.00p -2.74%
British Land Company (BLND) 382.50p -2.05%
International Consolidated Airlines Group SA (CDI) (IAG) 224.70p -1.83%
DCC (DCC) 5,300.00p -1.63%
Rightmove (RMV) 453.20p -1.50%
Phoenix Group Holdings (PHNX) 557.20p -1.17%
FTSE 250 - Risers
Drax Group (DRX) 228.80p 15.97%
Premier Oil (PMO) 23.73p 13.16%
Centamin (DI) (CEY) 155.60p 10.08%
Cineworld Group (CINE) 58.86p 9.16%
Cairn Energy (CNE) 98.60p 8.65%
Future (FUTR) 1,038.00p 8.24%
Ninety One (N91) 164.60p 7.86%
Airtel Africa (AAF) 39.15p 7.64%
Helios Towers (HTWS) 129.80p 7.63%
Watches of Switzerland Group (WOSG) 216.50p 7.18%
FTSE 250 - Fallers
Aston Martin Lagonda Global Holdings (AML) 48.00p -9.43%
Provident Financial (PFG) 150.20p -6.59%
TUI AG Reg Shs (DI) (TUI) 303.30p -5.78%
Ascential (ASCL) 208.40p -4.84%
QinetiQ Group (QQ.) 318.00p -4.39%
Marston's (MARS) 33.42p -4.13%
Hammerson (HMSO) 60.90p -3.88%
Mediclinic International (MDC) 241.20p -3.67%
PPHE Hotel Group Ltd (PPH) 1,180.00p -3.67%
Capita (CPI) 30.97p -3.46%