London midday: Stocks dip following CPI data at 40-year high

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Sharecast News | 17 Aug, 2022

London stocks were lower on Wednesday as investors mulled the latest UK inflation data which showed consumer prices climbed at their fastest clip in 40 years in July.

At 1218 BST, the FTSE 100 was down 0.41% at 7,505.03, while sterling was roughly flat against the dollar at 1.2099.

In parallel, the yield on the benchmark 10-year Gilt was 13 basis points higher to 2.261%.

"Double-digit inflation was inevitable but it has come earlier than expected which will leave households and businesses worrying about what that ultimately means for peak inflation later this year and how sustained it will be," said Craig Erlam, senior market analyst, UK&EMEA, OANDA.

"The data today has probably locked in a 50 basis point hike from the Bank of England as a minimum, especially when combined with yesterday's wage growth numbers."

Figures released earlier by the Office for National Statistics showed that the Consumer Price Index surpassed analysts' expectations as food and energy prices jumped.

Consumer price inflation rose to 10.1% from 9.4% in June. That marked the highest rate since February 1982 and was above the analyst consensus of 9.8%. Core CPI, which excludes food and energy costs, increased to 6.2% from 5.8% a month earlier, coming in above forecasts of 5.9%.

Food inflation accelerated in July to 12.6% - its highest rate since August 2008 - from 9.8%.

Still ahead, investors were waiting on a reading for US retail sales in July and the release of the minutes of the US central bank's 26-27 July policy meeting.

Banks and Balfour Beatty shine in down market

In equity markets, banks were among the top performers, with Lloyds and NatWest trading up amid the prospect of more Bank of England rate hikes.

Construction firm Balfour Beatty gained as it upgraded full-year guidance after interim profits more than doubled and new orders rose 10%.

On the downside, Ladbrokes owner Entain retreated after it was fined £17m by the Gambling Commission for social responsibility and anti-money laundering failures.

Housebuilder Persimmon dropped as it posted a fall in interim profits, but reiterated completion guidance and said price rises were offsetting cost inflation.

Cineworld crashed after saying it was mulling a restructure of its finances as a lack of blockbuster films from Hollywood had hit ticket sales.

Market Movers

FTSE 100 (UKX) 7,511.88 -0.32%
FTSE 250 (MCX) 20,212.41 -0.61%
techMARK (TASX) 4,361.82 -0.70%

FTSE 100 - Risers

B&M European Value Retail S.A. (DI) (BME) 438.80p 1.53%
Coca-Cola HBC AG (CDI) (CCH) 2,064.00p 1.28%
Admiral Group (ADM) 2,315.00p 1.18%
British American Tobacco (BATS) 3,446.00p 1.16%
Burberry Group (BRBY) 1,826.50p 1.11%
Fresnillo (FRES) 730.00p 1.00%
Diageo (DGE) 3,883.50p 0.92%
NATWEST GROUP PLC ORD 100P (NWG) 263.20p 0.84%
Reckitt Benckiser Group (RKT) 6,610.00p 0.79%
Airtel Africa (AAF) 147.00p 0.75%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 83.17p -3.18%
Antofagasta (ANTO) 1,128.00p -3.13%
Prudential (PRU) 958.40p -3.09%
Entain (ENT) 1,367.00p -2.81%
Melrose Industries (MRO) 149.10p -2.71%
Persimmon (PSN) 1,800.00p -2.65%
Anglo American (AAL) 2,929.00p -2.45%
Schroders (SDR) 2,920.00p -2.28%
International Consolidated Airlines Group SA (CDI) (IAG) 120.26p -2.23%
Abrdn (ABDN) 168.95p -2.06%

FTSE 250 - Risers

Balfour Beatty (BBY) 314.20p 8.64%
Polymetal International (POLY) 230.00p 4.55%
Carnival (CCL) 814.80p 4.49%
Darktrace (DARK) 535.00p 3.84%
Bank of Georgia Group (BGEO) 1,986.00p 3.22%
JTC (JTC) 784.00p 1.55%
Watches of Switzerland Group (WOSG) 911.50p 1.50%
Auction Technology Group (ATG) 939.00p 1.40%
TBC Bank Group (TBCG) 1,764.00p 1.38%
Royal Mail (RMG) 276.00p 1.32%

FTSE 250 - Fallers

ASOS (ASC) 888.50p -7.40%
Hochschild Mining (HOC) 76.35p -6.09%
Essentra (ESNT) 243.00p -4.52%
888 Holdings (DI) (888) 151.00p -4.43%
Aston Martin Lagonda Global Holdings (AML) 514.40p -3.71%
TUI AG Reg Shs (DI) (TUI) 149.05p -3.68%
Chrysalis Investments Limited NPV (CHRY) 90.50p -3.31%
Johnson Matthey (JMAT) 2,211.00p -3.03%
Tullow Oil (TLW) 49.20p -2.86%
easyJet (EZJ) 412.10p -2.78%

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