London midday: Stocks maintain gains as Whitbread rallies

London stocks were still in the black by midday on Tuesday, with Whitbread surging ahead after well-received first-quarter results.

The FTSE 100 was up 0.4% at 8,178.36, having taken its opening cue from a solid close on Wall Street, which saw the S&P 500 and Nasdaq set new record highs.

Data released earlier by Eurostat confirmed that eurozone annual inflation was 2.6% in May, up from 2.4% in April and in line with the flash estimate.

Core inflation - which strips out energy, food, alcohol & tobacco - came in at 2.9%, up from 2.7% and also in line with the flash estimate.

Ahead of a policy announcement on Thursday from the Bank of England, investors were digesting the Reserve Bank of Australia’s decision to leave its cash rate unchanged at a 12-year high of 4.35%, as expected.

Oxford Economics said: "Despite the RBA’s hawkish tone this month, we do not expect to see any more rate hikes. Another hike would represent a big departure from their current reaction function.

"We expect rates will stay on hold through 2024, with the first cut to come in early 2025."

On home shores, data from Kantar showed that grocery inflation eased to 2.1% in the four weeks to 9 June, from 2.4% in May.

Nevertheless, Fraser McKevitt, head of retail and consumer insight at Kantar, said the cost-of-living crisis is far from over.

"22% of households say they’re struggling, meaning that they aren’t able to cover their expenses or are just making ends meet," he said.

"However, there are positive signs that many of us no longer feel the need to restrict our spending quite so much, with lower inflation helping to ease the pressure on people’s pockets. In May, we recorded the largest jump in the number of comfortable households since January 2023, rising by two percentage points on February 2024’s figure. Costs are falling in nearly one third of the grocery categories we track, including toilet tissues, butter and milk. That’s a big increase from last year, when just 1% of markets were declining."

In equity markets, Ocado jumped to the top of the FTSE 100 after the Kantar data showed it was the fastest growing grocer for the fourth month, increasing sales by 10.7% over the 12 weeks to 9 June. This was ahead of the total online market, which saw sales rise 4%.

Premier Inn owner Whitbread rallied as it said it was confident on its full year outlook despite flat first quarter sales. Hotel sales were boosted by a strong performance in Germany, where they rose 15%, offsetting zero growth in the UK.

InterContinental Hotels also rose.

Equipment rental firm Ashtead fell, however, as its fourth-quarter profits came in shy of expectations and the company pointed to a further moderation of growth in the coming year.

Kathleen Brooks, research director at XTB, said: "It is the worst performer on the FTSE 100 so far on Tuesday after it reported revenue that was weaker than expected, and its forward guidance was disappointing.

"This is a toxic mix for a stock in the current environment, as investors are laser focused on corporate results and are willing to punish those who fall short. The upside is that the company did not mention anything about moving its listing to the US, where it does the bulk of its business. Prior to these earnings, the market had thought that it would follow the likes of Flutter and dual list its shares on the US market."

Telecom Plus reversed earlier gains to trade down despite posting better-than-expected full-year pre-tax profit as customer and service numbers continued to grow.

Outside the FTSE 350, XP Power tumbled after Denver-based Advanced Energy Industries said it does not plan to make a takeover offer for the group as it has not been able to access the due diligence necessary.

Market Movers

FTSE 100 (UKX) 8,178.36 0.44%
FTSE 250 (MCX) 20,303.00 0.71%
techMARK (TASX) 4,779.03 -0.04%

FTSE 100 - Risers

Ocado Group (OCDO) 358.10p 3.05%
Whitbread (WTB) 2,982.00p 2.72%
InterContinental Hotels Group (IHG) 8,320.00p 2.26%
Beazley (BEZ) 687.50p 2.08%
SSE (SSE) 1,772.00p 1.90%
Informa (INF) 858.80p 1.87%
Bunzl (BNZL) 2,952.00p 1.86%
Rightmove (RMV) 556.40p 1.79%
RS Group (RS1) 717.50p 1.77%
DCC (CDI) (DCC) 5,615.00p 1.72%

FTSE 100 - Fallers

Ashtead Group (AHT) 5,304.00p -3.74%
Fresnillo (FRES) 539.00p -0.74%
Rio Tinto (RIO) 5,148.00p -0.64%
AstraZeneca (AZN) 12,362.00p -0.53%
London Stock Exchange Group (LSEG) 9,412.00p -0.23%
Coca-Cola HBC AG (CDI) (CCH) 2,682.00p -0.22%
Airtel Africa (AAF) 120.20p -0.17%
Reckitt Benckiser Group (RKT) 4,400.00p -0.16%
Burberry Group (BRBY) 984.40p -0.14%
Unilever (ULVR) 4,429.00p -0.11%

FTSE 250 - Risers

Investec (INVP) 581.50p 6.50%
CMC Markets (CMCX) 265.50p 4.53%
Carnival (CCL) 1,124.00p 4.17%
Ninety One (N91) 167.10p 4.11%
Energean (ENOG) 1,023.00p 3.70%
Patria Private Equity Trust (PPET) 560.00p 3.13%
RIT Capital Partners (RCP) 1,800.00p 2.62%
Paragon Banking Group (PAG) 775.00p 2.51%
W.A.G Payment Solutions (WPS) 68.20p 2.40%
Urban Logistics Reit (SHED) 122.00p 2.35%

FTSE 250 - Fallers

Me Group International (MEGP) 164.00p -2.15%
Telecom Plus (TEP) 1,846.00p -1.49%
Wizz Air Holdings (WIZZ) 2,314.00p -1.28%
Ferrexpo (FXPO) 42.50p -1.16%
PureTech Health (PRTC) 216.50p -1.14%
Foresight Solar Fund Limited (FSFL) 87.70p -0.90%
IP Group (IPO) 45.00p -0.88%
SSP Group (SSPG) 163.80p -0.85%
GCP Infrastructure Investments Ltd (GCP) 76.60p -0.78%
Finsbury Growth & Income Trust (FGT) 836.00p -0.71%