London open: Stocks edge up; food price inflation hits 10-year high

London stocks edged higher in early trade on Wednesday as investors mulled the latest data on house prices and food inflation, and looked ahead to the Platinum Jubilee bank holiday.

At 0830 BST, the FTSE 100 was up 0.2% at 7,622.45.

Richard Hunter, head of markets at Interactive Investor, said: "Investors took a pause for breath after the recent rally as the spectre of inflation continues to loom large.

"The phased ban of Russian oil imports by the European Union lifted the price once more. With its wide applications across so much of the economy, ranging from manufacturing to travelling to energy, a higher oil price inevitably adds to inflation. While the price settled after the initial announcement, it nonetheless remains up by 49% in the year to date with no immediate signs of respite.

"Asian markets were more circumspect, despite the lifting of most restrictions in Shanghai and Beijing. The ripples of lower Chinese economic activity and confidence over the last few months have yet to fully wash through to the global chain, which adds to the fragility of sentiment as investors grapple with the concerns of slower growth and persistent inflation.

"Even so, the FTSE 100 opened defiantly higher in early trade, adding to the cumulative performance in the year to date."

Investors were digesting the latest BRC-Nielsen IQ Shop Price Index, which showed that food price inflation reached a 10-year high in May.

Food inflation rose to 4.3% from 3.5% in April, marking the highest rate since April 2012. Fresh Food inflation rose 4.5% from 3.4%, while ambient food inflation pushed up to 4% in May from 3.5% a month earlier.

Shop price annual inflation accelerated to 2.8% in May from 2.7% the month before, marking the highest rate of inflation since July 2011.

BRC chief executive Helen Dickinson said: "Retailers have been working hard to protect their customers from these rising costs, particularly at a time when households are being impacted by a huge rise in household energy bills.

"It is likely to get worse before it gets better for consumers with prices continuing to rise and a further jump in energy costs coming in October. With little sign that the cost burden on retailers will ease any time soon, they will be left with little room for manoeuvre, especially those whose supply chains are affected by lockdowns in China and the war in Ukraine."

Elsewhere, the latest survey from Nationwide showed that house prices grew for a tenth consecutive month in May, but the rate of growth appeared to be slowing as the ongoing cost of living crisis looked set to weigh on prices.

Still to come on the macro front, the S&P Global/CIPS manufacturing PMI for May is due at 0930 BST.

In corporate news, iconic bootmaker Dr Martens shares rocketed after it posted a surge in annual pre-tax profits, driven by a "very strong performance" in the Americas and Europe, the Middle East and Africa.

Retail group Frasers ticked higher as it announced the acquisition of embattled online womenswear retailer Missguided for £20m in cash.

Tullow Oil was also in focus after it agreed to buy Capricorn Energy in an all-share deal. Under the terms of the transaction, Capricorn shareholders will be entitled to receive 3.8068 new Tullow shares for each of their shares.

Market Movers

FTSE 100 (UKX) 7,622.45 0.19%
FTSE 250 (MCX) 20,486.48 0.34%
techMARK (TASX) 4,423.57 0.00%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 88.33p 1.89%
WPP (WPP) 934.40p 1.50%
Whitbread (WTB) 2,763.00p 1.47%
Associated British Foods (ABF) 1,754.50p 1.42%
Barclays (BARC) 171.42p 1.40%
Next (NXT) 6,564.00p 1.33%
ITV (ITV) 71.20p 1.31%
B&M European Value Retail S.A. (DI) (BME) 394.70p 1.28%
International Consolidated Airlines Group SA (CDI) (IAG) 129.26p 1.27%
Pearson (PSON) 763.80p 1.25%

FTSE 100 - Fallers

Vodafone Group (VOD) 126.28p -3.29%
National Grid (NG.) 1,134.50p -3.12%
Severn Trent (SVT) 2,861.00p -1.85%
Fresnillo (FRES) 765.00p -1.19%
Royal Mail (RMG) 307.70p -0.93%
Aveva Group (AVV) 2,261.00p -0.75%
Flutter Entertainment (CDI) (FLTR) 9,694.00p -0.68%
Anglo American (AAL) 3,861.00p -0.67%
Unilever (ULVR) 3,802.50p -0.59%
Relx plc (REL) 2,263.00p -0.57%

FTSE 250 - Risers

Dr. Martens (DOCS) 259.80p 20.06%
Chemring Group (CHG) 377.50p 6.94%
RHI Magnesita N.V. (DI) (RHIM) 2,510.00p 4.15%
Vivo Energy (VVO) 144.00p 3.00%
XP Power Ltd. (DI) (XPP) 3,340.00p 2.77%
Babcock International Group (BAB) 346.40p 2.61%
Wood Group (John) (WG.) 244.80p 2.60%
Darktrace (DARK) 373.90p 1.94%
Direct Line Insurance Group (DLG) 262.00p 1.83%
National Express Group (NEX) 270.00p 1.66%

FTSE 250 - Fallers

Synthomer (SYNT) 306.40p -6.64%
Ferrexpo (FXPO) 170.00p -2.69%
Euromoney Institutional Investor (ERM) 1,054.00p -2.59%
Abrdn Private Equity Opportunities Trust (APEO) 476.00p -1.86%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 478.50p -1.85%
Liontrust Asset Management (LIO) 1,096.00p -1.79%
Apax Global Alpha Limited (APAX) 180.20p -1.74%
Hilton Food Group (HFG) 1,070.00p -1.47%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 649.10p -1.35%
CLS Holdings (CLI) 226.00p -1.31%