London open: Stocks gain as inflation hits new 30-year high

London stocks edged higher in early trade on Wednesday following positive US and Asian sessions, as investors mulled the latest UK inflation data and looked ahead to the Spring Statement.

At 0830 GMT, the FTSE 100 was up 0.3% at 7,495.02, while sterling was 0.2% weaker against the dollar at 1.3237.

Figures released earlier by the Office for National Statistics showed that inflation hit a new 30-year high in February as the cost of living crisis intensified.

In the 12 months to February, consumer prices rose by 6.2% amid surging energy and fuel costs, up from 5.5% in January and marking the highest inflation reading since March 1992. Analysts had been expecting 6%.

On a month-on-month basis, prices were up 0.8%, which was the biggest monthly CPI jump between January and February since 2009.

Meanwhile, the retail price index came in at 31-year high of 8.2%.

The latest inflation reading comes ahead of Chancellor Rishi Sunak’s Spring Statement, in which he is expected to cut fuel duty by 5p a litre and raise the threshold for national insurance.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Some measures to relieve the pain are expected to be administered in the UK, by Chancellor Rishi Sunak later in his Spring Statement, and these are likely to be targeted at the lowest earners, who bear the brunt of commodity prices rises.

"The bulk of the increase in costs for consumers in the inflation snapshot came from higher energy bills and fuel prices, and there is no immediate end to that financial pain in sight with crude oil staying elevated, with Brent crude above $116 a barrel. However, a lid is being kept on gains for now with talks on trying to achieve an end to the devastating conflict in Ukraine, appearing to still be moving forward.

"It may be slow, step by step progress, according to Ukrainian President Zelensky, but any kind of improvement in the chances of a ceasefire is being welcomed by investors. Equity markets have risen with sentiment largely sanguine in the midst of the geopolitical turmoil, with the FTSE 100 rising on the open."

On the corporate front, oil giant BP was a high riser after an upgrade to ‘overweight’ at Morgan Stanley, while Watches of Switzerland gained after an initiation at ‘buy’ at Societe Generale.

Elsewhere, safety equipment company Halma was trading up after saying it had made "good progress" so far in the second half of its trading year.

UK defence company Ultra Electronics ticked lower even as it reported a rise in annual profits as it awaits a UK government decision on whether US buyout specialist Advent can take over the firm.

Reckitt Benckiser was under the cosh after a downgrade to ‘underperform’ at Jefferies, while Beazley fell after a downgrade to ‘hold’ at HSBC.

Market Movers

FTSE 100 (UKX) 7,496.03 0.26%
FTSE 250 (MCX) 21,146.32 0.16%
techMARK (TASX) 4,359.86 0.18%

FTSE 100 - Risers

Electrocomponents (ECM) 1,055.00p 2.33%
Ocado Group (OCDO) 1,107.00p 1.93%
BP (BP.) 378.20p 1.86%
Scottish Mortgage Inv Trust (SMT) 1,034.00p 1.52%
Ashtead Group (AHT) 5,448.00p 1.41%
Airtel Africa (AAF) 151.90p 1.40%
Smurfit Kappa Group (CDI) (SKG) 3,573.00p 1.22%
BAE Systems (BA.) 745.60p 1.19%
Mondi (MNDI) 1,569.50p 1.19%
Shell (SHEL) 2,030.50p 1.15%

FTSE 100 - Fallers

Reckitt Benckiser Group (RKT) 5,716.00p -2.81%
Kingfisher (KGF) 266.70p -2.27%
Pearson (PSON) 784.00p -0.88%
Standard Chartered (STAN) 515.00p -0.81%
HSBC Holdings (HSBA) 512.50p -0.79%
Land Securities Group (LAND) 773.60p -0.72%
Barratt Developments (BDEV) 555.80p -0.68%
Abrdn (ABDN) 205.70p -0.63%
Intermediate Capital Group (ICP) 1,708.00p -0.58%
Unilever (ULVR) 3,426.50p -0.38%

FTSE 250 - Risers

Discoverie Group (DSCV) 820.00p 2.37%
Carnival (CCL) 1,311.80p 1.69%
Oxford Instruments (OXIG) 2,140.00p 1.66%
BlackRock World Mining Trust (BRWM) 745.00p 1.64%
Polymetal International (POLY) 128.00p 1.59%
3i Infrastructure (3IN) 341.50p 1.49%
Aston Martin Lagonda Global Holdings (AML) 959.40p 1.44%
Tullow Oil (TLW) 51.66p 1.41%
Diversified Energy Company (DEC) 118.40p 1.37%
Edinburgh Worldwide Inv Trust (EWI) 223.00p 1.36%

FTSE 250 - Fallers

CMC Markets (CMCX) 247.00p -4.82%
Plus500 Ltd (DI) (PLUS) 1,435.50p -2.08%
Network International Holdings (NETW) 248.20p -1.90%
Contour Global (GLO) 194.00p -1.62%
TP Icap Group (TCAP) 131.20p -1.58%
Beazley (BEZ) 413.60p -1.50%
Auction Technology Group (ATG) 999.00p -1.28%
Wetherspoon (J.D.) (JDW) 818.00p -1.27%
Jupiter Fund Management (JUP) 210.00p -1.13%
Essentra (ESNT) 311.00p -1.11%