London close: Stocks close higher as UK inflation improves

London stocks finished slightly higher on Tuesday as data revealed an improvement in UK inflation in January.

The UK consumer price index rose 0.3% last month compared to a year ago, as expected by analysts, up from December’s 0.2% increase, the Office for National Statistics revealed. The improvement came as the fall in oil prices eased, although inflation remains well below the Bank of England’s 2% target.

“If the recent oil price rally is sustained, we could see inflation continue to tick upwards in the coming months, though the Bank of England said earlier this month that inflation would likely undershoot the 2% target until 2018,” said Ben Brettell, senior economist at Hargreaves Lansdown.

Oil prices reversed gains earlier in the session after Russia and Saudi Arabia dashed hopes of an agreement to cut production to address the supply glut.

Saudi Arabian oil minister Ali al-Naimi met with his Russian counterpart Alexander Novak and representatives from Venezuela and Qatar in Doha on Tuesday where they agreed to freeze oil production at January levels.

Brent crude fell 2.4% to $32.59 per barrel and West Texas Intermediate dropped 2.4% to $29.01 per barrel at 1617 GMT.

In China, data showed banks extended 2.51trn yuan of new loans in January, beating analysts’ estimates of 19.0trn yuan. The previous month banks granted 597.8bn yuan of new loans. The growth suggested Beijing is keeping monetary policy loose to turn around the economic slowdown.

Across the Atlantic, the US equities market resumed trading after being closed on Monday for President’s Day.

The New York Federal Reserve revealed business conditions in the region remained in negative territory. The Empire State manufacturing index for February rose to negative 16.6 from negative 19.4 in January. Analysts had predicted a reading of negative 10.0.

Activity in the US housing market cooled slightly in February, according to a widely-followed survey for the sector. The National Association of Home Builders/Wells Fargo Housing Market Index retreated from a reading of 61 points in January to 58 in February.

On the corporate front, shares in International Consolidated Airlines jumped after Merrill Lynch upgraded it to ‘buy’ from ‘underperform’, as the shares have over-shot on the downside.

Anglo American rebounded from earlier lows after the miner posted a pre-tax loss of $5.5bn after $3.8bn of write-downs since the half year, as it unveiled its promised "radical" overhaul of the business to counter crumbling commodity prices, with more than 6,500 job cuts expected.

Merlin Entertainments gained as it appointed Anne-Françoise Nesmes to its board as chief financial officer from 1 August.

Standard Chartered was under the cosh after Investec downgraded the stock to ‘hold’ from ‘buy’ in light of the very recent share price performance.

Spectris climbed after positing full-year results that revealed mixed global conditions made 2015 a rocky ride, showing increased sales, but depressed earnings.

Market Movers

FTSE 100 (UKX) 5,854.42 0.52%
FTSE 250 (MCX) 15,693.57 -0.22%
techMARK (TASX) 3,004.56 0.40%

FTSE 100 - Risers

Merlin Entertainments (MERL) 415.00p 3.29%
Rolls-Royce Holdings (RR.) 631.50p 2.68%
International Consolidated Airlines Group SA (CDI) (IAG) 517.50p 2.58%
Royal Mail (RMG) 441.10p 2.08%
British American Tobacco (BATS) 3,844.00p 1.83%
Ashtead Group (AHT) 836.50p 1.83%
Relx plc (REL) 1,183.00p 1.81%
Berkeley Group Holdings (The) (BKG) 3,218.00p 1.80%
easyJet (EZJ) 1,535.00p 1.79%
DCC (DCC) 5,480.00p 1.76%

FTSE 100 - Fallers

Standard Chartered (STAN) 428.90p -5.33%
Shire Plc (SHP) 3,725.00p -1.90%
Dixons Carphone (DC.) 430.60p -1.49%
Schroders (SDR) 2,390.00p -1.36%
Hikma Pharmaceuticals (HIK) 1,852.00p -1.07%
Aberdeen Asset Management (ADN) 226.50p -1.01%
SSE (SSE) 1,354.00p -0.95%
Prudential (PRU) 1,183.50p -0.88%
Hammerson (HMSO) 555.00p -0.80%
Land Securities Group (LAND) 1,016.00p -0.78%

FTSE 250 - Risers

Spectris (SXS) 1,648.00p 8.78%
BGEO Group (BGEO) 1,837.00p 6.43%
Cable & Wireless Communications (CWC) 68.70p 6.26%
International Personal Finance (IPF) 242.90p 6.16%
Just Retirement Group (JRG) 125.80p 4.40%
Telecom Plus (TEP) 864.50p 4.28%
Ladbrokes (LAD) 121.10p 3.77%
Fidessa Group (FDSA) 2,058.00p 3.68%
Interserve (IRV) 374.60p 3.37%
Dunelm Group (DNLM) 946.00p 2.83%

FTSE 250 - Fallers

Amec Foster Wheeler (AMFW) 350.70p -7.30%
Lookers (LOOK) 146.70p -5.05%
Genus (GNS) 1,386.00p -4.22%
Jardine Lloyd Thompson Group (JLT) 778.00p -3.83%
Euromoney Institutional Investor (ERM) 855.00p -3.82%
Spire Healthcare Group (SPI) 330.30p -3.73%
Enterprise Inns (ETI) 77.05p -3.69%
Jimmy Choo (CHOO) 120.40p -3.60%
Savills (SVS) 656.00p -3.46%
Ophir Energy (OPHR) 75.25p -3.34%