London close: Stocks slump on UK inflation, Middle East concerns

London stocks closed lower on Wednesday, influenced by a higher-than-anticipated UK inflation figure and concerns stemming from ongoing tensions in the Middle East.

The FTSE 100 index experienced a decline of 1.14%, closing at 7,588.00 points, while the FTSE 250 fared even worse, dropping by 1.62% to reach 17,403.46 points.

In currency markets, sterling was last down 0.11% against the dollar, trading at $1.2169, while it strengthened 0.16% on the euro, reaching €1.1536.

"European markets are on the back foot today as the political temperature in the Middle East ratchets up further in the wake of the hospital bombing in Gaza," said CMC Markets chief market analyst Michael Hewson

"With evidence starting to emerge that Israel may not have been responsible for the blast, the reality is that this may no longer matter given the heat already generated by last night’s horrific events.

*A lot of people have already made up their minds and aren’t likely to be dissuaded from their initial views, which could well mean that it is going to be very hard for cooler heads to prevail.

"Sentiment hasn’t been helped by reports of airport shutdowns in France due to terror threats which are weighing on the airline sector with losses for easyJet, IAG, Wizz Air and Ryanair."

UK inflation remains largely in line as house prices stagnate

In economic news, September's UK Consumer Price Index (CPI) headline rate of inflation remained largely as anticipated.

According to figures released earlier by the Office for National Statistics, consumer price inflation stuck at 6.7%, versus consensus expectations for it to ease to 6.6%.

Core CPI - which strips out energy, food, alcohol and tobacco - rose 6.1% in the 12 months to September.

That was down from 6.2% a month earlier but a touch higher than expectations of 6.0%.

Separately, the Office for National Statistics (ONS) reported that house prices in the UK remained relatively stagnant in August, influenced by the continued rise in mortgage rates, which subdued demand.

According to the ONS's seasonally-adjusted UK house price index, average prices inched up by a mere 0.2% over the 12 months leading to August, reaching £291,000.

That marked a slowdown from the 0.7% increase observed in July.

The growth rate represented the slowest annual increase in over a decade, although it did slightly surpass the consensus forecast, which had expected no change.

On a month-to-month basis, house prices did experience a slight uptick, rising by 0.3% in August.

At the same time, investors were keeping a close eye on economic data emanating from China, which indicated that the nation's economy expanded at a faster pace than initially projected during the third quarter.

Gross domestic product (GDP) rose by 4.9% year-on-year in Q3, surpassing expectations and building on the 6.3% growth recorded in the second quarter.

Industrial production in September mirrored the prior month, growing at a rate of 4.5% year-on-year, in line with consensus estimates.

Meanwhile, retail sales in China increased by 5.5%, outpacing the 4.6% growth witnessed in August and surpassing expectations for 4.9% growth.

Airlines slump, Whitbread manages rise

In equity markets, Barratt Developments faced a substantial decline of 5.14%.

The company stated that it remains on course to achieve its targeted home completions but acknowledged the prevailing uncertainty in the outlook for the year.

Airlines also experienced a downturn, with International Airlines Group (IAG), the parent company of British Airways (BA) and Iberia, seeing a 3.01% decrease.

Additionally, Wizz Air saw a significant drop of 4.75%, while easyJet lost 4.17%.

The decline was precipitated by United Airlines' announcement of weaker earnings projections for the fourth quarter, attributing it to increased costs.

Wizz Air faced additional pressure due to a rating downgrade from Citi.

William Hill and Mr Green owner 888 registered a 3.56% slump in its stock price.

The company reported a 10% decline in third-quarter revenues, citing the impact of new gambling regulations and customer-friendly outcomes as contributing factors.

On a more positive note, Whitbread exhibited a 2.5% rally.

The owner of Premier Inn reported a remarkable 44% surge in interim adjusted pre-tax profit, accompanied by a dividend hike and the announcement of a £300 million share buyback.

Finally, Marshalls bucked the trend with a 4.47% increase in its stock value.

Despite reporting a decrease in revenue for the nine months ending in September, the company expressed confidence in meeting its full-year expectations.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,588.00 -1.14%
FTSE 250 (MCX) 17,403.46 -1.62%
techMARK (TASX) 4,121.82 -1.28%

FTSE 100 - Risers

Centrica (CNA) 160.35p 1.46%
Reckitt Benckiser Group (RKT) 5,950.00p 1.33%
Whitbread (WTB) 3,366.00p 1.29%
Coca-Cola HBC AG (CDI) (CCH) 2,131.00p 0.85%
BT Group (BT.A) 118.30p 0.81%
M&G (MNG) 200.00p 0.76%
British American Tobacco (BATS) 2,506.50p 0.60%
BP (BP.) 558.00p 0.54%
Endeavour Mining (EDV) 1,684.00p 0.36%
United Utilities Group (UU.) 1,033.00p 0.34%

FTSE 100 - Fallers

AstraZeneca (AZN) 10,612.00p -5.84%
Barratt Developments (BDEV) 402.10p -5.14%
Taylor Wimpey (TW.) 107.00p -4.25%
CRH (CDI) (CRH) 4,590.00p -4.08%
Rolls-Royce Holdings (RR.) 207.80p -3.62%
International Consolidated Airlines Group SA (CDI) (IAG) 141.50p -3.08%
Anglo American (AAL) 2,199.50p -3.00%
Mondi (MNDI) 1,333.00p -2.95%
Antofagasta (ANTO) 1,354.00p -2.90%
Ashtead Group (AHT) 4,801.00p -2.85%

FTSE 250 - Risers

Hipgnosis Songs Fund Limited NPV (SONG) 73.00p 5.80%
Just Group (JUST) 78.70p 5.21%
Marshalls (MSLH) 205.40p 3.74%
Digital 9 Infrastructure NPV (DGI9) 41.05p 2.11%
Pantheon International (PIN) 305.00p 1.67%
Hiscox Limited (DI) (HSX) 980.50p 1.24%
Energean (ENOG) 929.50p 1.14%
W.A.G Payment Solutions (WPS) 95.00p 1.06%
The Renewables Infrastructure Group Limited (TRIG) 103.00p 0.98%
CAB Payments Holdings (CABP) 219.00p 0.92%

FTSE 250 - Fallers

Persimmon (PSN) 997.40p -6.74%
Quilter (QLT) 78.70p -6.42%
Hammerson (HMSO) 23.60p -5.98%
Bellway (BWY) 2,116.00p -5.82%
Foresight Group Holdings Limited NPV (FSG) 358.00p -5.79%
Crest Nicholson Holdings (CRST) 164.00p -5.75%
Ceres Power Holdings (CWR) 238.40p -5.68%
Volution Group (FAN) 351.80p -5.38%
TUI AG Reg Shs (DI) (TUI) 424.00p -5.36%
Ibstock (IBST) 128.90p -5.15%