London midday: Stocks stay down as investors eye more Fed speeches

London stocks were still in the red by midday on Tuesday as investors mulled the latest comments from US Federal Reserve officials and looked ahead to more speeches later in the day.

The FTSE 100 was down 0.4% at 8,390.17.

Russ Mould, investment director at AJ Bell, said: "Investors want the Federal Reserve to say inflation is comfortably on track to hit its 2% target and that interest rates will undergo a series of cuts.

"However, the central bank is loathed to make such a commitment and so we’ve got underlying uncertainty in the market even though data points are supportive to this line of thinking.

"Comments from Fed Vice Chair Philip Jefferson at a conference in New York triggered a sense of nervousness in the market as he played down talk of imminent rate cuts. European markets weren’t impressed and opened Tuesday mostly in the red."

Looking ahead to the rest of the day, investors were eyeing speeches from Federal Reserve officials John Williams, Thomas Barkin, Michael Barr, Raphael Bostic and Christopher Waller.

On home shores, Bank of England governor Andrew Bailey is due to give a speech at 1800 BST. Investors were also looking ahead to Wednesday’s UK inflation data.

Data released earlier by Kantar showed that UK grocery price inflation fell for the fifteenth month in a row in the four weeks to 12 May, to 2.4% - its lowest level since October 2021.

This was down from 3.2% in the previous four-week period. Grocery price inflation is now just 0.8 percentage points higher than the 10-year average of 1.6% between 2012 and 2021, which is just before prices began to climb.

The figures also showed that take-home grocery sales rose by 2.9% over the four weeks.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: "Typically, an inflation rate of around 3% is when we start to see marked changes in consumers’ behaviour, with shoppers trading down to cheaper items when the rate goes above this line and vice versa when the rate drops.

"However, after nearly two and a half years of rapidly rising prices, it could take a bit longer for shoppers to unwind the habits they have learnt to help them manage the cost of living crisis. Own-label lines are proving resilient, for example, and they are still growing faster than brands, making up over half (52%) of total spending. Sales of premium own label ranges continue to increase too, up by 9.9% compared with a year ago."

In equity markets, Fresnillo lost its shine as the precious metals miner reported increased silver production and gold output in line with guidance, despite the nearing end of the Noche Buena mine, although its gross profit took a hit in 2023.

Pennon was under the cosh after the South West Water owner slashed its dividend by £2.4m following a record fine for illegally dumping sewage into rivers and the sea. United Utilities and Severn Trent also fell.

Upper Crust and Ritazza owner SSP was lower as as it reinstated its interim dividend but posted a drop in first-half profits.

Cranswick also lost ground even as the food producer reported a jump in full-year profit and revenue as its investment programme bears fruit.

B&Q owner Kingfisher retreated after it said first-quarter like-for-like sales were down on last year on the back of weakness in France, but full-year expectations were unchanged.

On the upside, AstraZeneca rallied as it laid out plans to hit $80bn in revenue by 2030.

Big Yellow rallied after full-year results late on Monday, in which it posted robust revenue growth and increased profitability.

Market Movers

FTSE 100 (UKX) 8,390.17 -0.40%
FTSE 250 (MCX) 20,775.44 -0.47%
techMARK (TASX) 4,857.18 0.99%

FTSE 100 - Risers

AstraZeneca (AZN) 12,276.00p 1.49%
Reckitt Benckiser Group (RKT) 4,589.00p 1.17%
Schroders (SDR) 374.20p 1.03%
Flutter Entertainment (DI) (FLTR) 16,430.00p 0.74%
Next (NXT) 9,426.00p 0.62%
London Stock Exchange Group (LSEG) 9,370.00p 0.45%
Imperial Brands (IMB) 1,947.00p 0.39%
Centrica (CNA) 146.65p 0.31%
Whitbread (WTB) 3,140.00p 0.29%
Tesco (TSCO) 311.20p 0.26%

FTSE 100 - Fallers

Fresnillo (FRES) 624.00p -2.42%
Burberry Group (BRBY) 1,043.00p -2.25%
United Utilities Group (UU.) 1,070.00p -2.15%
Smith (DS) (SMDS) 368.00p -2.13%
GSK (GSK) 1,741.50p -1.89%
easyJet (EZJ) 466.10p -1.85%
Scottish Mortgage Inv Trust (SMT) 873.20p -1.80%
Hikma Pharmaceuticals (HIK) 1,938.00p -1.77%
Severn Trent (SVT) 2,588.00p -1.71%
Ocado Group (OCDO) 348.40p -1.67%

FTSE 250 - Risers

Big Yellow Group (BYG) 1,256.00p 6.44%
Safestore Holdings (SAFE) 875.50p 2.58%
Kainos Group (KNOS) 1,278.00p 2.57%
BH Macro Ltd. GBP Shares (BHMG) 359.50p 2.13%
TBC Bank Group (TBCG) 2,740.00p 2.05%
Patria Private Equity Trust (PPET) 555.00p 1.83%
W.A.G Payment Solutions (WPS) 75.80p 1.61%
Discoverie Group (DSCV) 747.00p 1.36%
Bank of Georgia Group (BGEO) 4,250.00p 1.07%
Bluefield Solar Income Fund Limited (BSIF) 106.40p 0.95%

FTSE 250 - Fallers

Pennon Group (PNN) 661.00p -7.75%
SSP Group (SSPG) 194.70p -6.75%
Ferrexpo (FXPO) 44.75p -3.45%
Cranswick (CWK) 4,300.00p -2.82%
Close Brothers Group (CBG) 491.80p -2.81%
Domino's Pizza Group (DOM) 340.60p -2.01%
GCP Infrastructure Investments Ltd (GCP) 76.00p -1.81%
Abrdn (ABDN) 150.40p -1.76%
Future (FUTR) 1,009.00p -1.75%
Aston Martin Lagonda Global Holdings (AML) 137.90p -1.71%