London open: Stocks edge lower but oil giants rally as Brent tops $80 a barrel

London stocks edged lower in early trade on Tuesday following mixed sessions in the US and Asia, as worries about inflation continued to play on investors’ minds.

At 0840 BST, the FTSE 100 was down 0.2% at 7,053.14.

Richard Hunter, head of markets at Interactive Investor, said: "The final week of the quarter is currently beset by concerns of persistent inflation on both sides of the pond, as supply chain shortages spread their net further.

"The oil price has seen the results of a current imbalance arising from worries of tightening supply, with the price now having risen by 55% in the year to date. Meanwhile the shortage of van drivers is having an impact on the broader delivery of goods in both the US and the UK, and with wage rises likely to follow, there is an increasing unease that inflation could be more persistent than originally thought."

Hunter said the picture in the UK is also muddied with a potential reticence from investors to commit fresh capital as the quarter comes to a close.

In equity markets, budget airline easyJet was under pressure after it said its rights issue to raise £1.2bn was 93% subscribed, leaving underwriters to find buyers for the remaining shares or pick up the tab themselves. EasyJet earlier this month unveiled plans to raise the cash via a 31-for-47 rights issue at 410p each, a deep discount of 36% on the airline’s closing share price on September 8.

Software group Sage was knocked lower by a downgrade to ‘sell’ at Goldman Sachs.

Water company Pennon was weaker despite saying it was on track to deliver a resilient financial performance in line with management expectations.

Going the other way, Smiths Group rallied after it said full-year headline operating profit from continuing operations rose 14% to £372m as revenue fell 6% to £2.41bn. On an underlying basis profit rose 7% and revenue fell 2% with revenue growing in the final quarter of the year to the end of July.

Shell and BP shares gushed higher as Brent crude topped $80 a barrel for the first time in three years amid supply concerns.

Online greeting card retailer Moonpig gained after it lifted its full-year revenue guidance to between £270m and £285m from between £250m and £260m, as it hailed strong trading in the year to date.

Electrocomponents was boosted by an upgrade to ‘outperform’ at RBC Capital Markets, while Flutter rose after an upgrade to ‘buy’ at HSBC.

Market Movers

FTSE 100 (UKX) 7,053.14 -0.15%
FTSE 250 (MCX) 23,484.35 -0.53%
techMARK (TASX) 4,662.58 -0.55%

FTSE 100 - Risers

Smiths Group (SMIN) 1,419.50p 4.07%
Royal Dutch Shell 'A' (RDSA) 1,639.40p 2.62%
Royal Dutch Shell 'B' (RDSB) 1,631.20p 2.27%
BP (BP.) 337.35p 1.83%
Ferguson (FERG) 10,665.00p 1.43%
Compass Group (CPG) 1,551.00p 0.94%
Diageo (DGE) 3,530.00p 0.91%
BT Group (BT.A) 163.45p 0.52%
British American Tobacco (BATS) 2,684.50p 0.41%
BAE Systems (BA.) 568.80p 0.39%

FTSE 100 - Fallers

Sage Group (SGE) 710.80p -4.05%
Croda International (CRDA) 8,274.00p -2.50%
Anglo American (AAL) 2,527.00p -2.39%
Johnson Matthey (JMAT) 2,644.00p -2.36%
Ocado Group (OCDO) 1,703.50p -2.29%
Coca-Cola HBC AG (CDI) (CCH) 2,403.00p -2.28%
Halma (HLMA) 2,855.00p -2.16%
SEGRO (SGRO) 1,197.00p -1.93%
Rolls-Royce Holdings (RR.) 144.66p -1.91%
Intermediate Capital Group (ICP) 2,072.00p -1.89%

FTSE 250 - Risers

Capita (CPI) 55.52p 5.15%
Cineworld Group (CINE) 82.50p 3.10%
Moonpig Group (MOON) 368.00p 2.11%
Diversified Energy Company (DEC) 117.60p 1.73%
CMC Markets (CMCX) 283.50p 1.61%
Electrocomponents (ECM) 1,114.00p 1.55%
Energean (ENOG) 903.00p 1.46%
Cairn Energy (CNE) 189.00p 1.29%
Harbour Energy (HBR) 377.80p 1.23%
Greencore Group (CDI) (GNC) 147.80p 1.16%

FTSE 250 - Fallers

Volution Group (FAN) 493.50p -3.61%
Pennon Group (PNN) 1,143.00p -3.05%
Liontrust Asset Management (LIO) 2,080.00p -3.03%
Dechra Pharmaceuticals (DPH) 4,698.00p -2.65%
Mitchells & Butlers (MAB) 258.00p -2.64%
FirstGroup (FGP) 91.55p -2.45%
Close Brothers Group (CBG) 1,537.00p -2.41%
National Express Group (NEX) 255.80p -2.14%
Genuit Group (GEN) 696.00p -2.11%
easyJet (EZJ) 694.60p -2.09%