London midday: Stocks stay down; Flutter Entertainment takes a hit

London stocks were still a little weaker by midday on Tuesday, as investors mulled the latest shop price inflation data.

The FTSE 100 was down 0.2% at 8,299.84.

Guy Lawson-Johns, equity analyst at Hargreaves Lansdown, said: "Last week’s election announcement is causing some short-term volatility in the markets, but longer-term investors can usually take this as background noise. Rishi Sunak is betting on a £2.4bn tax break to win the support of pensioners as he fights to stay in office. Meanwhile, the National Service pitch appears to be a defensive strategy to shore up core Tory voters as the Conservatives look set to gain an unprecedentedly low number of seats.

"Overnight, the European Central Bank sent a clear signal that interest rates will be cut from their record highs next week. This comes amid warnings that cutting rates aggressively ahead of the Fed could cause the euro to depreciate and inflation to flare up as imports become more expensive.

"In the US, despite bright spots and a booming Memorial Day weekend for travel, the usual summer slowdown in stock markets may be more pronounced this year. Inflation concerns and an early presidential debate could weigh on a rally that has pushed the S&P 500 near record highs. With the S&P 500 trading at a premium compared to historical norms and few catalysts for further gains, the traditionally slow summer season could be more turbulent than usual."

Investors were mulling the latest shop price index from the British Retail Consortium and NeilsenIQ, which showed that shop price inflation slowed to 0.6% in May from 0.8% in April.

This marked the lowest rate of shop price inflation since November 2021, and brought inflation below the three-month average of 0.9%.

Non-food prices continued to deflate, with an annual rate of -0.8% in May, compared to -0.6% in April.

That was the lowest deflation rate since October 2021, and was also below the three-month average, which was -0.4%.

Helen Dickinson, chief executive of the BRC, noted that shop price inflation had returned to normal levels, aided by a reduction in food inflation, particularly in fresh food.

"Meanwhile, ambient food inflation remained stickier, especially for sugary products which continued to feel the effects of high global sugar prices," she said.

"In non-food, retailers cut furniture prices in an attempt to revive subdued consumer demand for big-ticket items, and football fans have been able to grab some bargains on TVs and other audio-visual equipment ahead of this summer’s Euros."

In equity markets, DraftKings and FanDuel owner Flutter Entertainment was under the cosh after the Illinois Senate passed a bill that would make Illinois the second most expensive state for wagers to do business in, with companies having to pay a top rate of 40% tax.

Persimmon fell following a report the housebuilder is exploring a £1bn takeover bid for Cala Group, a rival player in the sector which has been put up for sale. According to Sky News, Persimmon is leaning towards submitting an offer for Cala ahead of a bid deadline next week.

Insiders expect Cala, which is being auctioned by Legal & General, to command a price tag of about £1bn. L&G shares were trading higher.

Great Portland Estates tumbled as the shares went ex-rights.

On the upside, investment firm Intermediate Capital Group rallied as it said profits more than doubled in the year ended 31 March and reported a huge increase in performance fee income while assets under management rose by nearly a quarter.

Market Movers

FTSE 100 (UKX) 8,299.84 -0.21%
FTSE 250 (MCX) 20,854.29 0.40%
techMARK (TASX) 4,851.43 -0.05%

FTSE 100 - Risers

Ocado Group (OCDO) 405.80p 8.56%
JD Sports Fashion (JD.) 127.55p 5.02%
Intermediate Capital Group (ICG) 2,392.00p 3.10%
RS Group (RS1) 761.00p 2.77%
Unite Group (UTG) 942.50p 2.17%
Ashtead Group (AHT) 5,834.00p 2.10%
Antofagasta (ANTO) 2,292.00p 2.05%
easyJet (EZJ) 465.80p 1.81%
Legal & General Group (LGEN) 252.00p 1.65%
Fresnillo (FRES) 605.50p 1.59%

FTSE 100 - Fallers

Flutter Entertainment (DI) (FLTR) 15,305.00p -4.28%
United Utilities Group (UU.) 975.80p -3.15%
Severn Trent (SVT) 2,380.00p -2.82%
Persimmon (PSN) 1,458.00p -1.55%
Diageo (DGE) 2,653.00p -1.49%
Intertek Group (ITRK) 4,960.00p -1.29%
InterContinental Hotels Group (IHG) 7,838.00p -1.23%
Halma (HLMA) 2,288.00p -1.17%
Compass Group (CPG) 2,196.00p -1.13%
Admiral Group (ADM) 2,695.00p -1.10%

FTSE 250 - Risers

Octopus Renewables Infrastructure Trust (ORIT) 69.50p 5.30%
PZ Cussons (PZC) 116.60p 5.05%
IP Group (IPO) 54.60p 5.00%
Indivior (INDV) 1,413.00p 4.13%
Mobico Group (MCG) 59.55p 4.02%
Barr (A.G.) (BAG) 619.00p 3.69%
Tritax Eurobox (GBP) (EBOX) 57.80p 3.58%
Close Brothers Group (CBG) 479.60p 3.54%
Helios Towers (HTWS) 122.00p 3.39%
Essentra (ESNT) 171.80p 3.25%

FTSE 250 - Fallers

Great Portland Estates (GPE) 360.50p -14.17%
Ferrexpo (FXPO) 46.00p -3.16%
Pennon Group (PNN) 589.50p -3.04%
Investec (INVP) 524.50p -2.78%
TBC Bank Group (TBCG) 2,590.00p -2.63%
Quilter (QLT) 116.30p -2.35%
Trainline (TRN) 320.80p -2.25%
SSP Group (SSPG) 174.60p -2.13%
Vistry Group (VTY) 1,283.00p -2.06%
Hiscox Limited (DI) (HSX) 1,144.00p -1.89%