London midday: Shares extend gains after EZ PMI data pleases

UK stocks extended gains on Wednesday as eurozone PMI data indicated the recession may not be as deep as expected and investors awaited the latest minutes from the Federal Reserve for any hints on the path of interest rates.

The FTSE 100 was up 0.59% at 1200 GMT after a strong Tuesday session where shares kicked off 2023 with a 1.4% gain. Sentiment was slightly tempered by a fall in US shares overnight.

Oil edged lower after slumping in the previous session, weighed down by concerns about weak demand due to the state of the global economy and China's rising Covid cases.

Brent futures for March delivery fell 43 cents to $81.67 a barrel, a 0.5% loss, by 0700 GMT. US crude dropped 39 cents, or 0.5%, to $76.54 per barrel. Both benchmarks plunged more than 4% on Tuesday, with Brent suffering its biggest one-day loss in more than three months. The news hit FTSE 100 heavyweights Shell & BP, while lower gas prices saw British Gas owner Centrica and SSE fall for the second successive day.

There was no major corporate news to drive trade, but the latest British Retail Consortium-NielsenIQ tracker, revealed that food inflation rose to 13.3% in December, from 12.4% a month earlier.

The BRC warned 2023 would be “another difficult year for consumers and businesses as inflation shows no immediate signs of waning”.

“Retailers will continue to work hard to support their customers and keep prices low. However, further high investment in prices may no longer be viable once the government's energy bill support scheme for business expires in April," said BRC chief executive Helen Dickinson.

Separate data from Kantar showed the impact of inflation on take-home grocery sales, which hit £12.8bn for the four weeks to 25 December 2022, driven by higher prices rather than increased spending.

"Shop price inflation is still uncomfortably higher despite the slight drop in December. Geopolitical uncertainty around the war in Ukraine continues to put upward pressure on food prices, adding to the cost-of-living squeeze on households by making essential goods much more expensive," said Interactive Investor analyst Victoria Scholar.

"The BRC figures for December highlight why many families opted for a slimmed down Christmas this festive period, given the inflated cost of food and drinks when combined with expensive energy bills and increasing mortgage rates on top. Looking ahead, the Bank of England’s rate hiking path and the softening demand outlook should hopefully ease some of these inflationary pressures later this year.”

In equity news, Burberry shares gained as the high-end fashion chain was boosted by hopes of a re-opening of its key Chinese market.

Low-cost airline Ryanair reported a 21% rise in passenger numbers for December as travel rebounded from the Covid pandemic.

Ryanair said it carried 11.5 million passengers compared with 9.5 million a year earlier. On a rolling basis, Ryanair said 160.4m passengers flew its routes in 2022, up 121%. The December load factor was up 11% to 92% year on year.

Rival Wizz Air gained 5% on a read-across of the data.

Market Movers

FTSE 100 (UKX) 7,601.24 0.62%
FTSE 250 (MCX) 19,308.96 0.91%
techMARK (TASX) 4,469.72 0.93%

FTSE 100 - Risers

Ocado Group (OCDO) 697.40p 7.52%
Fresnillo (FRES) 946.60p 4.99%
Burberry Group (BRBY) 2,165.00p 4.74%
B&M European Value Retail S.A. (DI) (BME) 441.30p 4.03%
Sainsbury (J) (SBRY) 233.00p 3.60%
Admiral Group (ADM) 2,239.00p 3.51%
CRH (CDI) (CRH) 3,523.00p 3.42%
Prudential (PRU) 1,217.00p 3.40%
Smurfit Kappa Group (CDI) (SKG) 3,243.00p 3.38%
Smith (DS) (SMDS) 338.00p 3.24%

FTSE 100 - Fallers

Centrica (CNA) 86.96p -5.42%
Glencore (GLEN) 520.50p -4.39%
Anglo American (AAL) 3,188.50p -2.40%
BP (BP.) 472.05p -2.34%
Shell (SHEL) 2,318.50p -2.05%
Rolls-Royce Holdings (RR.) 97.61p -1.31%
Antofagasta (ANTO) 1,543.00p -1.22%
SSE (SSE) 1,644.50p -1.14%
BAE Systems (BA.) 852.80p -1.09%
Melrose Industries (MRO) 135.75p -0.44%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 2,011.00p 5.95%
888 Holdings (DI) (888) 92.30p 4.83%
Tritax Eurobox (GBP) (EBOX) 67.00p 4.20%
Currys (CURY) 59.10p 3.96%
ASOS (ASC) 553.50p 3.94%
RHI Magnesita N.V. (DI) (RHIM) 2,322.00p 3.94%
Molten Ventures (GROW) 390.00p 3.78%
Volution Group (FAN) 389.50p 3.73%
Ashmore Group (ASHM) 252.40p 3.44%
Marks & Spencer Group (MKS) 131.00p 3.43%

FTSE 250 - Fallers

Drax Group (DRX) 636.50p -5.21%
Harbour Energy (HBR) 278.40p -4.98%
Energean (ENOG) 1,228.00p -4.21%
Aston Martin Lagonda Global Holdings (AML) 150.50p -3.03%
Ferrexpo (FXPO) 158.20p -2.83%
Apax Global Alpha Limited (APAX) 182.60p -2.35%
Keller Group (KLR) 832.00p -2.00%
Tullow Oil (TLW) 35.64p -1.93%
Diversified Energy Company (DEC) 112.00p -1.84%
Capricorn Energy (CNE) 247.60p -1.82%

Reporting by Frank Prenesti for Sharecast.com