London close: Stocks still positive after US inflation reading

London markets posted modest gains on Wednesday, following a key US inflation reading that showed relative stability in price rises in October.

The FTSE 100 index climbed 0.2% to close at 8,274.75 points, while the FTSE 250 advanced 0.16% to 20,601.63 points.

In currency markets, sterling was last up 0.94% on the dollar to trade at $1.2687, while it edged 0.1% higher against the euro, changing hands at €1.1995.

“The calm prevailing on the London exchange contrasts with the ongoing turmoil in France, where the CAC 40 has hit a fresh four-month low while government borrowing costs soar,” said IG chief market analyst Chris Beauchamp.

“French politics has been out of the headlines for a while, but the government looks at risk as it attempts to pass a budget.

“European stocks as a whole have failed to keep pace with the US of late, but in France the poor performance of the luxury sector and worries about the political outlook have caused the gap to become a chasm.”

Beauchamp noted that a repeat of the eurozone crisis was “unlikely”, but added that ECB intervention seemed to be a likelihood if the situation worsened.

“As Americans look forward to Thanksgiving, the Dow has crossed yet another milestone.

“The index briefly traded above 45,000, less than a month after hitting the 44,000 level for the first time.

“But further weakness in the semiconductor index has hit the Nasdaq, and signs of core PCE stabilising has investors concerned that the Fed may have to pause its easing policy sooner than expected.”

US inflation remains stable in October

In economic news, inflation in the United States showed steady momentum in October, as the personal consumption expenditures (PCE) price index rose 0.2% for the second consecutive month, according to the Commerce Department.

Year-on-year, the PCE index advanced to 2.3% from September’s 2.1%, while the core measure - excluding food and energy - rose 0.3% monthly and 2.8% annually.

Meanwhile, revised data confirmed that the US economy grew by 2.8% in the third quarter, supported by robust consumer spending and stronger exports, although the pace moderated from the second quarter's 3% expansion.

Consumer spending, which accounts for over two-thirds of economic activity, rose 3.5%, while inventory accumulation and business investment provided additional support.

The US labour market meanwhile remained historically strong, with initial jobless claims holding steady at 213,000 for the week ended 23 November, defying expectations of a slight rise.

The four-week moving average fell to 217,000, suggesting continued strength despite recent monetary tightening.

However, outstanding claims climbed to 1.9 million, the highest since November 2021, hinting at potential labour market cooling.

Closer to home, consumer sentiment faltered on the continent, with Germany’s GfK consumer climate indicator falling to a seven-month low of -23.3 for December, driven by fears of recession and unemployment.

That marked a sharp decline from November’s -18.4 and missed expectations of -18.6.

In France, consumer confidence hit a five-month low, with the INSEE index falling to 89.9 in November from 93.4 in October, as households grew more pessimistic about finances and living standards.

Earlier in the day, the Reserve Bank of New Zealand cut its official cash rate by 50 basis points to 4.25%, its second consecutive half-point reduction.

Governor Adrian Orr signalled the potential for further cuts in February, contingent on economic conditions.

With 125 basis points in cuts since August, New Zealand’s central bank has adopted one of the most aggressive easing paths globally, projecting a gradual return to a 3.83% rate by mid-2025.

Auction Technology surges on results, Pets at Home sinks

On London’s equity markets, Auction Technology Group surged 15.1% after releasing well-received full-year results and offering an upbeat outlook.

Housebuilder Vistry Group climbed 4.18% amid reports of potential bid interest, with speculation fueled by a social media post highlighting takeover possibilities following a recent drop in its share price.

BT Group added 1.92% after announcing a leadership transition in its consumer division.

Marc Allera would step down as chief executive officer in March, with Claire Gillies set to take over as CEO-designate in December.

Water utility Pennon Group rose 3.79%, recovering from earlier losses, despite reporting a first-half loss attributed to restructuring and investment costs.

Mitchells & Butlers gained 1.63% following better-than-expected annual profits, with the pub group also noting a 4% rise in like-for-like sales in the first seven weeks of the new financial year.

Aviva advanced 1.56%, bolstered by an analyst upgrade to "outperform" from KBW.

On the downside, Pets at Home plummeted 14.37% after cutting its full-year outlook, citing a subdued market environment.

Johnson Matthey fell 9.58% as it reported a decline in sales and profits for the six months ending September, citing macroeconomic challenges.

Carmaker Aston Martin Lagonda slid 5.28% following news of a £210m capital raise through share and private debt placements.

The move, intended to support growth and stabilise its balance sheet, came a day after the company issued its second profit warning in two months.

Elsewhere, easyJet reversed earlier gains to close down 0.59%, despite reporting a 34% rise in full-year pre-tax profit to £610m and raising its dividend to 12.1p per share from 4.5p, driven by strong summer demand and narrowing winter losses.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,274.75 0.20%
FTSE 250 (MCX) 20,601.63 0.16%
techMARK (TASX) 4,694.68 -0.04%

FTSE 100 - Risers

Airtel Africa (AAF) 105.00p 5.16%
Vistry Group (VTY) 675.00p 2.66%
LondonMetric Property (LMP) 194.30p 2.26%
Marks & Spencer Group (MKS) 384.30p 2.23%
Tesco (TSCO) 357.90p 2.14%
BT Group (BT.A) 159.35p 2.05%
Intermediate Capital Group (ICG) 2,094.00p 1.95%
British Land Company (BLND) 390.40p 1.88%
Rightmove (RMV) 637.80p 1.63%
Intertek Group (ITRK) 4,736.00p 1.59%

FTSE 100 - Fallers

Smurfit Westrock (DI) (SWR) 4,274.00p -3.19%
Entain (ENT) 783.20p -2.61%
Smith (DS) (SMDS) 582.00p -2.02%
Flutter Entertainment (DI) (FLTR) 21,650.00p -1.46%
CRH (CDI) (CRH) 8,056.00p -1.42%
Kingfisher (KGF) 248.80p -1.23%
easyJet (EZJ) 533.80p -1.22%
Croda International (CRDA) 3,483.00p -1.22%
Whitbread (WTB) 2,843.00p -1.22%
Rentokil Initial (RTO) 398.40p -1.07%

FTSE 250 - Risers

Auction Technology Group (ATG) 503.00p 14.19%
Ithaca Energy (ITH) 120.20p 5.62%
Pennon Group (PNN) 602.00p 3.79%
Quilter (QLT) 146.10p 3.47%
PayPoint (PAY) 845.00p 3.17%
ITV (ITV) 71.85p 3.08%
Bakkavor Group (BAKK) 138.50p 2.97%
Close Brothers Group (CBG) 212.20p 2.81%
Keller Group (KLR) 1,496.00p 2.47%
Crest Nicholson Holdings (CRST) 160.30p 2.43%

FTSE 250 - Fallers

Pets at Home Group (PETS) 230.00p -16.97%
Johnson Matthey (JMAT) 1,330.00p -10.92%
Kainos Group (KNOS) 769.00p -5.88%
Aston Martin Lagonda Global Holdings (AML) 102.00p -5.47%
Wood Group (John) (WG.) 53.50p -2.82%
Allianz Technology Trust (ATT) 394.00p -2.72%
PZ Cussons (PZC) 79.80p -2.68%
Wizz Air Holdings (WIZZ) 1,280.00p -2.51%
Victrex plc (VCT) 864.00p -2.37%
Burberry Group (BRBY) 904.20p -2.33%