London midday: Stocks slip as European gas futures spike

London stocks were trading lower at the start of the week as natural gas futures jumped after Russia said the Nordstream 1 pipeline would be closed for three days of maintenance and as investors eyed next Friday’s Jackson Hole central banking symposium.

"Last week brought an end to the late summer winning streak that saw stock markets recover a significant - and some would argue overly so - portion of the losses endured this year. And it seems that has set the tone going into this week, with Asia and Europe posting losses of more than 1% and US futures pointing to a similar open," said Craig Erlam, senior market analyst at Oanda.

"Naturally, all eyes are on Jackson Hole later in the week and in particular, the appearance of Fed Chair Jerome Powell."

At 1203 BST, the FTSE 100 was edging lower by 0.22% at 7,534.11, while the FTSE 250 index was retreating by 1.37% to 19,615.69.

In parallel, Dutch TTF gas futures were spiking by almost 41% to €285.5/MWh.

Sterling was only a shade weaker, drifting down by 0.19% to 1.1809.

Over the weekend, Russian state-owned gas giant Gazprom announced that gas flows through NS1 would be halted for three days between 29 August and 2 June for regular maintenance, but markets obviously were obviously fearful of the worst outcomes.

Economists at Citi raised their forecasts for the peak in UK inflation to 18% in the wake of the additional 25% rally in UK gas prices and 7% rise in electricity costs over the previous week.

The new peak, which the broker expected would be reached in January, was based on the assumption of a £300 policy offset applied to household energy bills from next October through to 2023, Dow Jones Newswires reported.

For their part, economists at Barclays Research said that US central bank chairman, Jerome Powell, was likely to use the Jackson Hole venue to "reinforce the FOMC's intention to guide policy to a restrictive position, amid lingering risks of sustained high inflation.".

On a related note, they added that "Last week, CPI data for the UK and EU showed that price pressures remain intense.

"We now expect more aggressive tightening from the BoE, with a 50bp hike in September and 25bp in November."

Shares under selling pressure

In equity markets, Cineworld was under the cosh again after it confirmed it is considering filing for bankruptcy in the US as it looks to access near-term liquidity. Shares in the company - which owns Regal Cinemas in the US - tanked on Friday following a press report that it was preparing to file for bankruptcy within weeks after struggling to rebuild attendance from pandemic lows.

Shares of Hungary-based Wizz Air flew lower as the carrier said chief financial officer Jourik Hooghe has decided to step down to pursue opportunities outside of the company. He will be succeeded by Ian Malin, who will join the airline on 1 October.

Elsewhere, Vodafone reversed early gains following the announcement that it was planning to sell its Hungary business to 4iG and Corvinus, a Hungarian state holding company, for €1.8bn. Vodafone's shared services business in Hungary - VOIS - is not included in the transaction perimeter and it will continue to provide services to Vodafone's other operating companies, the company said.

Market Movers

FTSE 100 (UKX) 7,526.91 -0.31%
FTSE 250 (MCX) 19,609.11 -1.40%
techMARK (TASX) 4,307.63 -0.79%

FTSE 100 - Risers

Harbour Energy (HBR) 405.90p 2.14%
Haleon (HLN) 261.30p 2.03%
Standard Chartered (STAN) 591.60p 1.51%
AstraZeneca (AZN) 11,408.00p 1.40%
BP (BP.) 451.40p 0.80%
National Grid (NG.) 1,176.50p 0.68%
SSE (SSE) 1,851.00p 0.52%
Centrica (CNA) 83.02p 0.41%
Compass Group (CPG) 1,958.00p 0.38%
Reckitt Benckiser Group (RKT) 6,698.00p 0.36%

FTSE 100 - Fallers

Ocado Group (OCDO) 835.20p -4.77%
Smurfit Kappa Group (CDI) (SKG) 2,949.00p -3.56%
Hargreaves Lansdown (HL.) 920.60p -3.36%
St James's Place (STJ) 1,180.50p -3.32%
Smith (DS) (SMDS) 273.00p -3.19%
Scottish Mortgage Inv Trust (SMT) 835.80p -3.06%
Mondi (MNDI) 1,524.00p -2.93%
International Consolidated Airlines Group SA (CDI) (IAG) 109.46p -2.75%
Aveva Group (AVV) 2,225.00p -2.67%
Spirax-Sarco Engineering (SPX) 10,890.00p -2.64%

FTSE 250 - Risers

Supermarket Income Reit (SUPR) 126.00p 2.02%
HGCapital Trust (HGT) 376.50p 1.76%
Abrdn Private Equity Opportunities Trust (APEO) 442.00p 1.61%
Energean (ENOG) 1,310.00p 1.39%
Hilton Food Group (HFG) 1,032.00p 0.78%
Apax Global Alpha Limited (APAX) 184.60p 0.76%
FirstGroup (FGP) 108.80p 0.65%
BH Macro Ltd. GBP Shares (BHMG) 4,560.00p 0.55%
Caledonia Investments (CLDN) 3,675.00p 0.41%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 496.00p 0.40%

FTSE 250 - Fallers

Hammerson (HMSO) 21.97p -16.24%
Wizz Air Holdings (WIZZ) 2,174.00p -6.66%
Countryside Partnerships (CSP) 253.20p -5.66%
Bridgepoint Group (Reg S) (BPT) 244.00p -4.98%
888 Holdings (DI) (888) 142.00p -4.83%
Redde Northgate (REDD) 357.00p -4.80%
Domino's Pizza Group (DOM) 254.40p -4.72%
Network International Holdings (NETW) 227.40p -4.69%
Allianz Technology Trust (ATT) 242.00p -4.35%
Hochschild Mining (HOC) 69.35p -4.34%