London open: Retailers boost market ahead of inflation data, Morrison jumps

Well-received updates from a host of retailers were giving UK stock markets a boost on Tuesday morning, as investors awaited some key inflation data.

The FTSE 100 was up 0.2% at 6,514 early on with Wm Morrison leading the rise.

Data due out at 09:30 is forecast to show that the annual rate of consumer-price inflation in the UK slowed to just 0.7% last month, from 1% in November. This would be the first time that inflation has fallen below 1% since June 2002.

If confirmed, the figure will require Bank of England governor Mark Carney to write a letter to chancellor George Osborne explaining the deviation of over one percentage point from the 2% target.

“While [the figures] are worth keeping a close eye on, expectations for the first Bank of England rate hike have been put back so far now - early 2016 in many people's opinions - due to the central bank’s admission that inflation is likely to fall further, that there's not much to read into today's numbers,” said analyst Craig Erlam from Alpari.

Chinese economic data overnight, meanwhile, showed that the trade balance declined more than expected last month as export growth picked up sharply.

Morrisons jumps after CEO exit

The share price of supermarket group Wm Morrison jumped following the news that chief executive Dalton Philips has been axed after the company delivered the worst Christmas performance of the Big Four.

Like-for-like (LFL) sales excluding fuel fell 3.1% in the six weeks to 4 January; although this was not quite as bad as the 3.8% decline analyst had predicted, it was far in excess of the 0.3% decline at Tesco and Sainsbury's 1.7% slide. Tesco and Sainsbury’s were also trading in positive territory early on.

Also in the retail sector, ASOS surged after reporting a 15% rise in retail sales over Christmas, driven by a 27% jump in sales in the UK. Broker Shore Capital said the growth in its domestic market will encourage investors following a tough 2014, which saw its share price plummet significantly.

A very strong post-Christmas update from meaty treats retailer Greggs led management to boast that full-year results will beat current expectations, causing the stock to jump. Christmas LFL sales were up 8.2%.

Bucking the trend was high street department store Debenhams whose shares dropped after revealing that full-year margins will be at the lower end of guidance despite a record sales performance over Christmas.

Elsewhere, SIG, the distributor of building products, rose after saying that it expects 2014 pre-tax profit to be marginally ahead of market consensus.

Oil and gas stocks were continuing to feel the heat after Brent crude settled below the $50-a-barrel mark for the first time in nearly six years. Tullow, Shell and BP were all trading in the red as Brent fell a further 3.7% to $45.70 a barrel on Tuesday morning.

Market Movers
techMARK 2,992.81 +0.08%
FTSE 100 6,514.33 +0.20%
FTSE 250 16,012.79 +0.43%

FTSE 100 - Risers
Morrison (Wm) Supermarkets (MRW) 184.60p +4.35%
Centrica (CNA) 272.00p +4.21%
ITV (ITV) 219.10p +3.11%
Tesco (TSCO) 209.95p +2.64%
Sainsbury (J) (SBRY) 246.10p +2.41%
Admiral Group (ADM) 1,399.00p +2.27%
SSE (SSE) 1,532.00p +1.93%
Severn Trent (SVT) 2,111.00p +1.93%
Barratt Developments (BDEV) 431.70p +1.91%
Babcock International Group (BAB) 1,038.00p +1.76%

FTSE 100 - Fallers
Tullow Oil (TLW) 376.20p -2.77%
Weir Group (WEIR) 1,681.00p -2.44%
Ashtead Group (AHT) 1,095.00p -1.97%
Shire Plc (SHP) 4,626.00p -1.60%
Glencore (GLEN) 275.45p -1.43%
ARM Holdings (ARM) 984.00p -1.40%
Royal Dutch Shell 'B' (RDSB) 2,097.00p -1.39%
Royal Dutch Shell 'A' (RDSA) 2,052.50p -1.25%
Rolls-Royce Holdings (RR.) 859.00p -1.09%
BP (BP.) 392.95p -0.91%

FTSE 250 - Risers
Greggs (GRG) 797.00p +6.34%
Drax Group (DRX) 376.50p +5.76%
Pace (PIC) 358.00p +4.65%
Hikma Pharmaceuticals (HIK) 2,459.00p +3.32%
Michael Page International (MPI) 439.50p +3.05%
Vesuvius (VSVS) 447.50p +2.76%
Bodycote (BOY) 646.00p +2.54%
Ocado Group (OCDO) 409.40p +2.38%
Dechra Pharmaceuticals (DPH) 853.50p +2.22%
Centamin (DI) (CEY) 66.95p +2.06%

FTSE 250 - Fallers
Debenhams (DEB) 68.85p -8.26%
Entertainment One Limited (ETO) 303.90p -2.28%
Cobham (COB) 323.60p -2.24%
Fisher (James) & Sons (FSJ) 1,084.00p -2.17%
Jimmy Choo (CHOO) 167.50p -2.05%
Kier Group (KIE) 1,477.00p -1.86%
Brit (BRIT) 261.30p -1.77%
Betfair Group (BET) 1,511.00p -1.76%
Laird (LRD) 312.10p -1.67%
Vedanta Resources (VED) 490.60p -1.58%