London open: Stocks fall amid inflation concerns; miners slump

London stocks fell in early trade on Wednesday amid ongoing concerns about inflation, with heavily-weighted miners pacing the decline,

At 0850 GMT, the FTSE 100 was down 0.6% at 6,693.16.

Overnight, the Nasdaq jumped nearly 4% thanks to a rally in tech stocks, but this failed to translate into any gains in Europe.

Investors were digesting data out of China which showed that the producer price inflation rate rose to 1.7% in February from 0.3% the month before, hitting its highest reading since November 2018.

CMC Markets analyst Michael Hewson said: "While yesterday’s Nasdaq rally was a positive development it came against a backdrop of a drop in US 10-year yields. If it can continue to move higher in the face of higher rates then the rally might be more convincing, however the higher inflation narrative isn’t likely to subside any time soon, which means any sustained Nasdaq rally could well be vulnerable to setbacks.

"This morning’s sharp rise in Chinese PPI for February to 1.7% could well be another leading indicator for a rise in inflationary pressures in the coming weeks, along with this afternoon's US CPI numbers."

In equity markets, miners were under the cosh, with Rio, BHP, Anglo American and Glencore all weaker.

Legal & General dipped after it reported flat annual operating profits as it set aside an extra £110m in Covid-19 insurance claims due to the emergence of new virus strains.

Shares of broadcaster ITV were under pressure a day after its full-year results. Markets.com analyst Neil Wilson speculated that it could be to down to the departure of outspoken Good Morning Britain host Piers Morgan.

"Are they down because of this event or just amid his departure? Investors may be a little worried about the loss of ratings for GMB - it wasn’t exactly doing that well before he joined and its primetime slot will have repercussions for ads," he said.

"Love or loathe, Morgan boosted ratings. It could also be that investors are worried about an investigation over comments made by Morgan on air. Shares were hit yesterday after it revealed the way in which lockdowns have hit ad revenues, but indicated things are picking up and Studios can drive new growth. Deutsche Bank today calls it a buy. You cannot be owning ITV and worry about one host, can you?"

On the upside, Spirax-Sarco Engineering rallied after it posted a better-than-expected full-year profit, while revenues were in line after a stronger-than-anticipated fourth quarter.

Just Eat Takeaway gained after saying it would keep up its investment drive as the food delivery company reported surging sales and a wider annual loss.

Wealth manager Quilter rose after better-than-expected full-year results, while Hill & Smith advanced as it reported a drop in full-year profit due to the pandemic, but lifted its dividend and said it expects to see a recovery in trading this year.

Market Movers

FTSE 100 (UKX) 6,693.16 -0.55%
FTSE 250 (MCX) 21,281.24 -0.47%
techMARK (TASX) 4,083.43 -0.57%

FTSE 100 - Risers

Spirax-Sarco Engineering (SPX) 11,455.00p 3.95%
Scottish Mortgage Inv Trust (SMT) 1,143.00p 2.33%
M&G (MNG) 217.20p 1.12%
Diageo (DGE) 2,992.00p 1.08%
Pearson (PSON) 814.20p 0.99%
St James's Place (STJ) 1,250.50p 0.89%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,902.00p 0.85%
Reckitt Benckiser Group (RB.) 6,164.00p 0.75%
Croda International (CRDA) 6,294.00p 0.64%
Schroders (SDR) 3,444.00p 0.38%

FTSE 100 - Fallers

Rio Tinto (RIO) 5,569.00p -4.30%
BHP Group (BHP) 2,137.50p -2.84%
Fresnillo (FRES) 908.40p -2.72%
Melrose Industries (MRO) 182.30p -1.94%
Entain (ENT) 1,448.50p -1.66%
Glencore (GLEN) 280.25p -1.63%
Antofagasta (ANTO) 1,713.00p -1.61%
Auto Trader Group (AUTO) 561.60p -1.58%
Kingfisher (KGF) 281.70p -1.54%
B&M European Value Retail S.A. (DI) (BME) 522.20p -1.51%

FTSE 250 - Risers

Quilter (QLT) 151.00p 3.04%
Baillie Gifford US Growth Trust (USA) 319.00p 2.90%
Edinburgh Worldwide Inv Trust (EWI) 340.00p 2.87%
FDM Group (Holdings) (FDM) 1,094.00p 2.43%
Liontrust Asset Management (LIO) 1,340.00p 2.29%
Hill & Smith Holdings (HILS) 1,350.00p 2.12%
CLS Holdings (CLI) 222.50p 1.83%
Allianz Technology Trust (ATT) 2,660.00p 1.72%
TR Property Inv Trust (TRY) 378.50p 1.61%
IP Group (IPO) 121.00p 1.51%

FTSE 250 - Fallers

Virgin Money UK (VMUK) 191.65p -3.93%
ITV (ITV) 121.45p -3.88%
Capital & Counties Properties (CAPC) 163.20p -3.55%
Cairn Energy (CNE) 186.40p -3.32%
Wood Group (John) (WG.) 320.20p -3.15%
WH Smith (SMWH) 1,879.00p -2.99%
Babcock International Group (BAB) 246.60p -2.91%
Energean (ENOG) 916.50p -2.68%
Ultra Electronics Holdings (ULE) 2,056.00p -2.56%
Hammerson (HMSO) 31.39p -2.45%