London open: FTSE edges lower ahead of US inflation data

London stocks edged lower in early trade on Wednesday as investors eyed the release of the latest US inflation data.

At 0830 BST, the FTSE 100 was down 0.2% at 7,470.58.

On the macro front, the US consumer price index for July is due at 1330 BST, with economists expecting an easing to 8.7% from 9.1 in June.

Oanda market analyst Craig Erlam said: "I don't think it's an exaggeration to say that today's inflation number could set the tone for the markets for the rest of the month.

"A lower-than-expected number could be a major tailwind for the markets while anything around or above the June reading could trigger a big risk reversal in the markets as the debate shifts to 75 or 100 basis points, with 50 left in the rear-view mirror."

In equity markets, Prudential slumped as the Asia-focused insurer reported a rise in first-half operating profit but struck a cautious note over the outlook.

"Although there are signs that Covid-19-related impacts in many of our markets are stabilising, over the remainder of the year we expect that operating conditions may continue to be challenging," it said.

Holiday company TUI was in the red as it said the travel chaos seen across Europe this summer had pushed it to a third-quarter operating loss as it incurred extra costs, but added that summer bookings were close to pre-pandemic levels.

Royal Mail lost ground as it emerged that around 115,000 of its workers are set to strike on four days in August and September in a dispute over pay.

Elsewhere, XP Power was knocked lower by a downgrade to ‘hold’ at HSBC.

On the upside, Admiral surged to the top of the FTSE 100 even as the insurer posted a drop in first-half profit, pointing to a "more turbulent cycle than usual" and high inflation. In the six months to 30 June, pre-tax profit fell 48% to £251.3m. Versus the same period in pre-pandemic 2019, however, pre-tax profit was ahead 19%. Peer Direct Line rose as well.

Aviva gained as the insurer reported a 14% increase in first-half operating profit and said it expects to announce a share buyback with its full-year results.

TP Icap was boosted by well-received half-year results, while 4Imprint advanced as it said customer demand was at record levels and posted a surge in first-half profits.

Pets at Home was also up after an initiation at ‘buy’ by Jefferies.

Market Movers

FTSE 100 (UKX) 7,470.58 -0.23%
FTSE 250 (MCX) 19,864.46 -0.24%
techMARK (TASX) 4,320.92 -0.09%

FTSE 100 - Risers

Admiral Group (ADM) 2,071.00p 5.26%
Aviva (AV.) 432.90p 4.49%
Fresnillo (FRES) 737.80p 1.88%
Abrdn (ABDN) 163.30p 1.33%
Legal & General Group (LGEN) 272.00p 0.74%
Mondi (MNDI) 1,482.50p 0.37%
Severn Trent (SVT) 3,003.00p 0.33%
Lloyds Banking Group (LLOY) 45.14p 0.32%
United Utilities Group (UU.) 1,115.50p 0.31%
NATWEST GROUP PLC ORD 100P (NWG) 255.20p 0.31%

FTSE 100 - Fallers

Halma (HLMA) 2,188.00p -2.02%
Dechra Pharmaceuticals (DPH) 3,424.00p -2.00%
Prudential (PRU) 974.20p -1.52%
Harbour Energy (HBR) 359.60p -1.26%
Rolls-Royce Holdings (RR.) 83.60p -1.25%
JD Sports Fashion (JD.) 125.15p -1.22%
Taylor Wimpey (TW.) 121.35p -1.18%
Spirax-Sarco Engineering (SPX) 11,350.00p -1.18%
Rightmove (RMV) 628.80p -1.13%
Smith (DS) (SMDS) 283.30p -1.12%

FTSE 250 - Risers

TP Icap Group (TCAP) 146.00p 5.21%
4Imprint Group (FOUR) 3,475.00p 4.48%
Direct Line Insurance Group (DLG) 212.10p 1.92%
Hochschild Mining (HOC) 82.95p 1.78%
Hiscox Limited (DI) (HSX) 934.00p 1.77%
UK Commercial Property Reit Limited (UKCM) 75.30p 1.75%
Pets at Home Group (PETS) 344.80p 1.70%
CMC Markets (CMCX) 243.50p 1.44%
Close Brothers Group (CBG) 1,130.00p 1.16%
Safestore Holdings (SAFE) 1,108.00p 1.09%

FTSE 250 - Fallers

TUI AG Reg Shs (DI) (TUI) 139.95p -4.29%
Royal Mail (RMG) 256.60p -3.12%
XP Power Ltd. (DI) (XPP) 2,050.00p -3.03%
Quilter (QLT) 116.00p -2.67%
Softcat (SCT) 1,333.00p -2.49%
Bridgepoint Group (Reg S) (BPT) 245.80p -2.15%
Hammerson (HMSO) 25.78p -2.08%
888 Holdings (DI) (888) 147.30p -1.94%
Molten Ventures (GROW) 404.00p -1.85%
Allianz Technology Trust (ATT) 239.50p -1.84%