London open: FTSE rebounds ahead of US inflation report

The FTSE rebounded on Thursday from three days of declines as investors dusted off disappointing data in the previous session.

Wednesday saw a worse-than-expected easing in September Chinese inflation. The consumer price index rose 1.6% from a year earlier, slowing down from a 2% increase in August, the National Bureau of Statistic said. Analysts had been expecting a 1.8% increase, adding to concerns about the health of the world’s second largest economy.

US retail sales rose 0.1% month-on-month compared with a flat reading in the previous month and with analysts’ expectations for 0.2% increase, the Commerce Department revealed.

The UK labour report was mixed with the unemployment rate falling unexpectedly to 5.4% in the three months to August from the previous quarter’s 5.5% while wages rose less than expected during the period and jobless claims in September surprisingly increased.

Turning to Thursday’s agenda, US inflation figures will be in focus with analysts expecting deflation in September amid falling energy and food prices.

The CPI is forecast to drop 0.1% in September from a year ago, following a 0.2% increase in August. Analysts predict CPI on a month-on-month basis to decrease 0.2% last month after a 0.1% fall in August. Excluding food and energy prices, CPI growth last month is estimated to remain in line with August, rising 0.1% month-on-month and 1.8% year-on-year.

The Federal Reserve’s September policy meeting minutes last week revealed the central bank voted to keep interest rates unchanged in part due to concerns of prolonged low inflation. The Fed is targeting 2% inflation.

“Given that there is usually a lag on the CPI numbers we can probably expect a similarly weak outlook as we head towards year end, making it doubly difficult for the US Fed to continue pushing its narrative of a rate rise sometime this year,” said Michael Hewson, chief market analyst at CMC Markets.

Among companies, Burberry plunged after reporting broadly flat sales in the six months to 30 September after a slowing in the second quarter due to its exposure to China. The luxury fashion retailer said it would cut costs to minimise the impact on full-year profits.

Unilever advanced after posting a jump in revenue in the third quarter and saying it expects underlying sales growth for the year to be towards the top end of its target range.

Hargreaves Lansdown continued its rally after reporting a near-50% increase in net new business in the third quarter on Wednesday.

WH Smith gained after the retailer posted a rise in pre-tax profit for the year on the back of a good performance across the group, with the travel business in particular providing a boost.

Tesco slumped as it sold 14 sites managed by its Spenhill property development arm across London, the South East and Bath for £250m.

Market Movers

techMARK 3,008.20 +0.67%

FTSE 100 6,328.59 +0.94%

FTSE 250 16,873.39 +0.37%

FTSE 100 - Risers

ARM Holdings (ARM) 976.50p +4.66%

Glencore (GLEN) 124.95p +4.12%

Unilever (ULVR) 2,896.00p +3.80%

Hargreaves Lansdown (HL.) 1,366.00p +2.71%

Anglo American (AAL) 697.40p +2.41%

BP (BP.) 385.85p +2.17%

Antofagasta (ANTO) 592.50p +2.07%

Aberdeen Asset Management (ADN) 338.60p +1.96%

Rio Tinto (RIO) 2,575.00p +1.86%

Standard Chartered (STAN) 740.40p +1.70%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,253.00p -11.70%

Sports Direct International (SPD) 662.00p -1.93%

Smiths Group (SMIN) 1,014.00p -1.55%

Carnival (CCL) 3,273.00p -0.85%

Meggitt (MGGT) 466.00p -0.83%

TUI AG Reg Shs (DI) (TUI) 1,210.00p -0.66%

Barclays (BARC) 244.50p -0.63%

Tesco (TSCO) 191.95p -0.26%

International Consolidated Airlines Group SA (CDI) (IAG) 575.50p -0.17%

Ashtead Group (AHT) 977.50p -0.15%

FTSE 250 - Risers

Kaz Minerals (KAZ) 135.80p +4.70%

Man Group (EMG) 157.00p +3.84%

WH Smith (SMWH) 1,595.00p +3.50%

Virgin Money Holdings (UK) (VM.) 416.20p +3.38%

Amec Foster Wheeler (AMFW) 825.00p +2.74%

Restaurant Group (RTN) 713.50p +2.66%

Vedanta Resources (VED) 581.00p +2.65%

Evraz (EVR) 91.85p +2.40%

Ophir Energy (OPHR) 104.10p +2.26%

Hunting (HTG) 450.30p +2.25%

FTSE 250 - Fallers

Card Factory (CARD) 355.40p -4.28%

Serco Group (SRP) 101.50p -3.24%

Booker Group (BOK) 175.60p -2.44%

Spectris (SXS) 1,709.00p -2.40%

Dunelm Group (DNLM) 922.50p -2.12%

Electrocomponents (ECM) 216.20p -1.99%

Ted Baker (TED) 2,839.00p -1.70%

OneSavings Bank (OSB) 352.80p -1.45%

Enterprise Inns (ETI) 103.50p -1.43%

Countrywide (CWD) 463.20p -1.15%

FTSE TechMARK - Risers

SDL (SDL) 393.00p +2.34%

Spirent Communications (SPT) 76.75p +1.66%

NCC Group (NCC) 267.25p +1.52%

Skyepharma (SKP) 337.50p +1.50%

Consort Medical (CSRT) 940.00p +0.48%

KCOM Group (KCOM) 89.75p +0.28%

IShares Euro Gov Bond 7-10YR UCITS ETF (IEGM) € 204.06 +0.08%

FTSE TechMARK - Fallers

Dialight (DIA) 640.00p -1.54%

Oxford Instruments (OXIG) 664.50p -1.12%

XP Power Ltd. (DI) (XPP) 1,500.00p -0.46%