London open: Stocks flat ahead of Fed announcement; Next rallies

London stocks were little changed in early trade on Wednesday as investors sifted through a raft of corporate news and eyed the latest policy announcement from the US Federal Reserve.

At 0835 GMT, the FTSE 100 was flat at 7,185.92, while the pound was up 0.2% against the dollar at 1.1508.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Investors are waiting for clues from the Federal Reserve about the path of rate rises, and in the meantime a slightly more wary mood has settled on the markets. The Fed is expected to bring in another super-size rate hike of 0.75%, but that has been priced in.

"Instead, it is the words that chair Jerome Powell chooses to use, about the economic outlook and what the future may hold, which are set to be market movers. There are high hopes that he will signal that there could be some softening in the US central bank’s aggressive approach to taming inflation, with the market pricing in a shallower 0.5% hike at the December meeting. That’s why equities have been largely in a more buoyant mood over the last few weeks, despite the decline of the S&P 500 in the last session."

On home shores, the Bank of England’s latest rate announcement is due on Thursday.

Investors were also mulling over data from BRC and Nielsen, which showed that shop price inflation reached a fresh record high last month as the price of food continued to spike.

According to the latest BRC-Nielsen IQ Shop Price Index, shop price inflation reached 6.6% in October from 5.7% a month earlier. That was well above the three-month average of 5.5%, and the highest since the index began in 2005.

Within that, food inflation surged to 11.6% from 10.6% in September, the highest rate on record.

Fresh food saw the biggest prices hikes, with inflation at 13.3% against September’s 12.1%, while ambient food inflation rose to 9.4% from 8.6%.

Non-food inflation also hit a series high, however, rising to 4.1% from 3.3%.

Helen Dickinson, chief executive of the British Retail Consortium, said: "It has been a difficult month for consumers, who not only faced an increase in their energy bills, but also a more expensive shopping basket.

"Prices were pushed up by because of the significant input cost pressures faced by retailers due to rising commodity and energy prices and a tight labour market."

Dickinson added that while "some" supply chain costs were now beginning to fall, it was being offset by the cost of energy.

In equity markets, Next was the top performer on the FTSE 100 after the retailer maintained its full-year guidance and posted a 0.4% rise in third-quarter full-price sales, slightly ahead of the company’s expectations.

GSK also gained as the pharma giant lifted full-year guidance after beating third-quarter expectations with an 18% rise in revenues driven by its Shingrix shingles vaccine.

On the downside, British American Tobacco slumped after a downgrade to ‘neutral’ at Goldman Sachs, while online supermarket Ocado was hit by a downgrade to ‘underweight’ at JPMorgan.

Hungary-based budget airline Wizz Air was sharply lower despite producing a better-than-expected second quarter, which helped interim profits to soar by a third.

Aston Martin Lagonda tumbled after the luxury car maker downgraded its delivery expectations as it pointed to supply chain issues, and posted a widening of its losses.

In an update for the nine months to 30 September, the company said it now expects total wholesales to be more in line with current consensus expectations at between 6,200 and 6,600, down from previous guidance of more than 6,600.

Market Movers

FTSE 100 (UKX) 7,185.92 0.00%
FTSE 250 (MCX) 18,174.73 -0.12%
techMARK (TASX) 4,286.93 0.20%

FTSE 100 - Risers

Next (NXT) 5,064.00p 2.04%
Centrica (CNA) 79.40p 1.93%
GSK (GSK) 1,463.00p 1.18%
Smiths Group (SMIN) 1,579.00p 1.12%
AstraZeneca (AZN) 10,460.00p 1.10%
RS Group (RS1) 970.50p 1.04%
Anglo American (AAL) 2,795.00p 1.03%
Burberry Group (BRBY) 1,870.00p 1.00%
Flutter Entertainment (CDI) (FLTR) 11,725.00p 0.95%
Hargreaves Lansdown (HL.) 797.60p 0.91%

FTSE 100 - Fallers

British American Tobacco (BATS) 3,350.50p -3.30%
Admiral Group (ADM) 1,974.00p -2.76%
Smurfit Kappa Group (CDI) (SKG) 2,831.00p -2.35%
Ocado Group (OCDO) 640.00p -2.23%
SEGRO (SGRO) 780.40p -1.74%
Barratt Developments (BDEV) 375.40p -1.55%
Persimmon (PSN) 1,302.50p -1.48%
British Land Company (BLND) 367.90p -1.23%
Imperial Brands (IMB) 2,094.00p -1.23%
Smith (DS) (SMDS) 288.60p -1.13%

FTSE 250 - Risers

Ferrexpo (FXPO) 105.00p 7.58%
Molten Ventures (GROW) 366.80p 5.71%
Premier Foods (PFD) 109.20p 4.00%
Kainos Group (KNOS) 1,333.00p 3.98%
AJ Bell (AJB) 347.40p 3.95%
Baltic Classifieds Group (BCG) 142.20p 3.34%
Bankers Inv Trust (BNKR) 99.00p 2.48%
Dunelm Group (DNLM) 896.00p 2.40%
Tullow Oil (TLW) 45.64p 2.29%
Coats Group (COA) 64.30p 2.06%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 95.66p -9.50%
Pets at Home Group (PETS) 279.80p -4.70%
Wizz Air Holdings (WIZZ) 1,666.00p -3.98%
Chemring Group (CHG) 298.00p -3.87%
Direct Line Insurance Group (DLG) 196.80p -3.58%
Ascential (ASCL) 193.10p -2.33%
Cranswick (CWK) 2,970.00p -2.30%
Vistry Group (VTY) 596.50p -2.29%
LondonMetric Property (LMP) 186.60p -2.20%
Future (FUTR) 1,250.00p -2.19%