London midday: Stocks push higher as investors mull inflation data

London stocks hit a hit a three-week high just before midday on Tuesday, while the pound briefly popped up following the release of in-line inflation data.

The FTSE 100 was up 0.6% to 7,392.43, around its highest level since 21 March, while sterling was flat against the dollar at 1.2424.

Data from the Office for National Statistics showed UK inflation eased slightly on a monthly basis in March but remained above the Bank of England's 2% target rate for a second month, with a rise in food prices offset by lower air fares due to a later Easter this year.

The Bank of England's Monetary Policy Committee is keeping a close eye on inflation as it weighs various economic factors in determining whether to lift interest rates from their historic low.

The headline consumer prices index for March remained 2.3% higher than last year for a second consecutive month, as forecast. On a monthly basis CPI rose 0.4%, down from the 0.7% jump in February but more than the 0.3% increase the market expected.

Core CPI, which excludes more volatile prices like fuel and food, eased off to 1.8% from 2% a month ago. Food price inflation rose to 1.6% from 0.3%.

CPIH, the newly favoured official ONS figure, which includes owner-occupiers’ housing costs, also stood fast at 2.3% as predicted.

“Today’s inflation figures don’t show the kind of overshoot that might prompt a sea change in the outlook for monetary policy in the UK or for sterling," said analyst Ranko Berich at Monex Europe, though he noted that the trend for accelerating inflation is likely to continue in the coming months.

He added: “Much of this change is due to pass through effects from the massive sterling depreciation seen over the last year, and it is these ‘transitory’ bits of inflation that the Bank of England has promised to look through. Of course, tomorrow’s wage figures are another story – if the increase in inflation over the last year is beginning to clearly filter through to wage negotiations, we’re likely to see an about-turn from the Bank of England and a change in the outlook for sterling.”

Other data from the ONS showed average house prices in the UK rose 5.8% in the year to February, up from 5.3% in the year to January but still below the average annual growth of 7.3% in 2016. Economists had been expecting a 6.1% jump in house prices.

Geopolitical tensions continued to build after North Korea denounced the US deployment of a navy strike group to the Korean Peninsula. Meanwhile, US President Donald Trump and UK Prime Minister Theresa May agreed there is a "window of opportunity" to persuade Russian to ditch its support for Syria's Bashar al-Assad.

Miners provided a large chunk of the upside, with Randgold Resources, Antofagasta, Rio Tinto, and Fresnillo racking up solid gains.

JD Sports Fashion surged after it reported annual profits before tax and exceptional items up 56% to £244.8m on revenue up 31% to £2.4bn.

Burberry got a boost after peel LVMH Moet Hennessy Louis Vuitton posted a 15% rise in first-quarter sales.

British Airways and Iberia parent International Consolidated Airlines Group was lifted by a positive note from Exane BNP Paribas, which rates the stock at 'outperform'.

Recruiter Robert Walters was on the front foot as it posted a 33% jump in net fee income for the first quarter, noting an upturn in financial services recruitment activity in London. Peers Hays and Michael Page also gained ground.

Banknote printer De La Rue rallied after saying full-year operating profit is expected to be above the top end of market consensus, driven by good growth in Identity Systems and Product Authentication & Traceability product lines.

Balfour Beatty was lifted by an upgrade to 'buy' from 'neutral' from Bank of America Merrill Lynch.

Vedanta Resources reversed earlier losses to trade higher as it said it achieved record levels of aluminium, zinc, silver and copper production at its India mines in the fourth quarter.

Market Movers

FTSE 100 (UKX) 7,392.43 0.59%
FTSE 250 (MCX) 19,368.67 0.54%
techMARK (TASX) 3,452.90 0.48%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 543.50p 2.84%
Fresnillo (FRES) 1,622.00p 2.46%
Burberry Group (BRBY) 1,798.00p 2.10%
Rio Tinto (RIO) 3,330.00p 2.08%
Randgold Resources Ltd. (RRS) 7,375.00p 2.01%
Antofagasta (ANTO) 868.00p 2.00%
Associated British Foods (ABF) 2,625.00p 1.82%
easyJet (EZJ) 1,073.00p 1.61%
Rolls-Royce Holdings (RR.) 809.50p 1.57%
Aviva (AV.) 521.00p 1.56%

FTSE 100 - Fallers

Hikma Pharmaceuticals (HIK) 1,914.00p -1.64%
Next (NXT) 4,084.00p -0.63%
Provident Financial (PFG) 3,149.00p -0.35%
Pearson (PSON) 634.00p -0.24%
Sky (SKY) 969.00p -0.15%
Royal Bank of Scotland Group (RBS) 238.80p -0.08%
Mediclinic International (MDC) 724.00p -0.07%
BT Group (BT.A) 314.95p -0.02%
Vodafone Group (VOD) 203.90p -0.00%
CRH (CRH) 2,786.00p 0.04%

FTSE 250 - Risers

JD Sports Fashion (JD.) 455.60p 12.05%
Balfour Beatty (BBY) 284.00p 4.95%
Pagegroup (PAGE) 451.60p 3.96%
Just Eat (JE.) 577.00p 3.41%
Hays (HAS) 162.70p 3.11%
Dairy Crest Group (DCG) 583.00p 2.91%
Hochschild Mining (HOC) 284.50p 2.71%
Rightmove (RMV) 4,118.00p 2.44%
Debenhams (DEB) 54.15p 2.36%
NMC Health (NMC) 1,884.00p 2.22%

FTSE 250 - Fallers

Tullow Oil (TLW) 230.10p -3.68%
Aldermore Group (ALD) 230.90p -2.53%
Ibstock (IBST) 201.60p -2.37%
Cairn Energy (CNE) 209.20p -1.97%
Northgate (NTG) 529.50p -1.67%
Jardine Lloyd Thompson Group (JLT) 1,125.00p -1.14%
Supergroup (SGP) 1,518.00p -0.98%
Sophos Group (SOPH) 327.00p -0.91%
Card Factory (CARD) 297.20p -0.83%
Pennon Group (PNN) 872.00p -0.80%