London close: Stocks drift lower as investors digest corporate updates

London stocks drifted lower on Wednesday, but airlines got a boost after an upbeat update from easyJet.

The FTSE 100 drifted down by 0.16% to 7,744.87 while the FTSE 250 dipped 0.26% to 19,804.04.

"The FTSE 100 is just one of a swathe of indices in the red in Europe and the US this afternoon. For the UK’s main index, the past week has been one of losses overall, which is perhaps not surprising following the recent four-year high," said IG chief market analyst Chris Beauchamp.

"Trading statements from UK plc this week have been ‘OK’, but not of the kind to really fire up enthusiasm in investors to chase the index at its current levels.

"For the FTSE 250, JD Wetherspoon’s numbers point towards the problem of investing in the UK economy at present – inflation is entrenched and consumer spending is constrained, which is hardly the kind of backdrop to tempt in fresh money to UK stocks."

In the meantime, data released earlier by the Office for National Statistics showed that producer price inflation slowed in December as cost pressures eased.

Producer input prices rose by 16.5% in the year to December, down from 18% in the year to November and 20.2% in October. Input prices, which hit a record high of 24.6% last June, are the prices businesses pay for materials and other goods

Factory gate prices rose by 14.7%, down from 16.2% in November and 17.5% in October.

The ONS said inputs of other parts and equipment, and petroleum products, provided the largest downward contributions to input and output inflation respectively. Metals and non-metallic minerals provided the largest upwards contribution to input PPI.

However, despite December’s fall, producer price inflation remains near record highs. Before Russia invaded Ukraine, which caused energy and good prices to soar, it averaged 2.4% between 1985 and 2020.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "The falling costs of parts, equipment and fuel prices are all helping, and the overall trend is encouraging, showing inflation is heading in a downwards direction.

"But it’s clear that producers are still grappling with the high cost of doing business while attempting to keep a lid on price increases for customers."

Elsewhere, the latest retail industry research showed that footfall in the UK saw strong growth during 2022, although it remains below pre-pandemic levels.

According to retail consultancy Springboard, footfall fell 14.2% in 2022 compared to 2019. Within that, high streets saw a 16.9% decline and shopping centres a 18.8% slide. Footfall eased 3.7% in retail parks.

Compared to 2021, overall footfall sparked 42%, with a 51.2% jump on high streets, a 52% increase in shopping centres and a 11.7% improvement in retail parks. However, while 2022 was the first restriction-free year since the start of the pandemic, in 2021 the UK was in lockdown for the first four months of the year with all bar essential retail closed.

In equity markets, budget airline easyJet flew higher after saying it expects to beat full-year profit expectations, as it narrowed losses in the first quarter and forward bookings into the summer surged. British Airways and Iberia owner IAG and Wizz Air also rallied.

Ascential popped after saying that full-year revenues and adjusted EBITDA were set to be ahead of market expectations, and announcing the planned separation of its digital assets, sending its shares up against their 50-week moving average.

Insurer Aviva traded higher after it maintained its dividend guidance and capital returns outlook for the year.

JD Wetherspoon was down after it reported a jump in first-half sales, although they remain below pre-pandemic levels.

In broker note action, Entain was knocked lower by a downgrade to ‘neutral’ at Exane, while Experian fell after a downgrade to ‘neutral’ at Credit Suisse.

Dr Martens was hit by a downgrade to ‘hold’ at HSBC, while Direct Line was weaker after a downgrade to ‘hold’ at Berenberg. Darktrace was boosted by an upgrade to 'overweight' at Morgan Stanley.

Market Movers

FTSE 100 (UKX) 7,744.87 -0.16%
FTSE 250 (MCX) 19,804.04 -0.26%
techMARK (TASX) 4,424.05 -0.69%

FTSE 100 - Risers

Aviva (AV.) 455.70p 3.26%
International Consolidated Airlines Group SA (CDI) (IAG) 169.72p 2.04%
United Utilities Group (UU.) 1,078.00p 1.84%
Severn Trent (SVT) 2,833.00p 1.72%
Prudential (PRU) 1,334.00p 1.64%
Lloyds Banking Group (LLOY) 50.95p 1.64%
Antofagasta (ANTO) 1,786.00p 1.30%
GSK (GSK) 1,403.60p 1.20%
Unite Group (UTG) 990.50p 1.12%
NATWEST GROUP (NWG) 302.00p 1.10%

FTSE 100 - Fallers

Ocado Group (OCDO) 697.00p -4.94%
Experian (EXPN) 2,852.00p -3.71%
Scottish Mortgage Inv Trust (SMT) 742.80p -2.93%
Croda International (CRDA) 6,832.00p -2.65%
Spirax-Sarco Engineering (SPX) 11,310.00p -2.25%
Fresnillo (FRES) 860.20p -2.09%
Convatec Group (CTEC) 238.60p -2.05%
Melrose Industries (MRO) 142.05p -1.83%
Entain (ENT) 1,531.50p -1.80%
Abrdn (ABDN) 205.10p -1.72%

FTSE 250 - Risers

Ascential (ASCL) 262.00p 25.96%
easyJet (EZJ) 513.40p 9.70%
Tullow Oil (TLW) 38.50p 5.89%
Discoverie Group (DSCV) 827.00p 4.42%
Wizz Air Holdings (WIZZ) 3,012.00p 4.22%
Baltic Classifieds Group (BCG) 157.00p 3.97%
Dechra Pharmaceuticals (DPH) 2,774.00p 3.35%
Tritax Big Box Reit (BBOX) 153.40p 3.16%
Pennon Group (PNN) 946.50p 2.99%
TBC Bank Group (TBCG) 2,420.00p 2.98%

FTSE 250 - Fallers

Wetherspoon (J.D.) (JDW) 449.40p -6.18%
Molten Ventures (GROW) 364.40p -6.03%
Mitchells & Butlers (MAB) 163.40p -4.44%
FDM Group (Holdings) (FDM) 762.00p -4.39%
Bridgepoint Group (Reg S) (BPT) 235.40p -3.92%
CMC Markets (CMCX) 234.50p -3.70%
Digital 9 Infrastructure NPV (DGI9) 88.60p -3.70%
National Express Group (NEX) 132.90p -3.70%
Dr. Martens (DOCS) 134.20p -3.45%
Volution Group (FAN) 371.00p -3.13%