London open: Stocks nudge up as investors eye US inflation

London stocks were just a smidgen higher in early trade on Tuesday as investors eyed the latest US inflation reading.

At 0900 GMT, the FTSE 100 was up 0.1% at 7,305.75.

Neil Wilson, chief market analyst at Markets.com, said: "Mixed, flattish start to trading for European stock markets after a record again on Wall Street as the S&P 500 closed above 4,700 for the first time.

"Gains of about 0.1% for the DAX and FTSE 100 keeping risk just in the green but the Stoxx 50 is flat. For US stocks it’s been a straight line up since the middle of October and whilst there is always this sense that ‘it must pull back soon’, that is sometimes when it’s finding the path of least resistance to the upside.

"Risks are starting to take shape around rising covid cases in mainland Europe and the possibility of new lockdowns - something to watch in the coming days as it could play out with weakness for European equities. German infection rate at the highest since the pandemic started. Meanwhile the inflation threat looms as large as ever - tomorrow’s CPI numbers for the US will be closely assessed.

"Today we get the PPI numbers which are going to show ongoing supply chain pressure and pass through of costs to consumers, with the consensus at +0.6% for the headline number and +0.5% for the core PPI. Recent PMI surveys point in one direction for prices and that’s up."

On home shores, industry data out earlier showed that retail sales jumped last month as consumers splashed out on Halloween and got festive shopping underway.

According to the latest BRC-KPMG Retail Sales Monitor, total sales grew by 1.3% in October compared to the same month a year earlier, or by 6.3% when compared to October 2019. On a like-for-like basis, retail sales were down 0.2% year-on-year.

Over the three months to October, food sales rose 0.3% on a like-for-like basis, while non-food retail sales eased 0.1%.

The best-performing sectors were clothing, footwear and jewellery and watches. Furniture and computing were two of the weakest categories, hit by supply chain issues including the semiconductor shortage.

Helen Dickinson, chief executive of the British Retail Consortium, said: "Customer demand is getting back on track ahead of Christmas, as sales grew at a faster rate than the month prior, and well above pre-pandemic levels. As social calendars started filling up with festivities, clothing and footwear sales performed well.

"However, there are challenges ahead, with higher prices on the horizon compounded by the many increasing costs faced by consumers."

In equity markets, Primark owner Associated British Foods jumped to the top of the FTSE 100 after saying it expected "significant progress" in the current year as it reported a rise in annual profits but warned that food prices may have to rise due to increasing costs.

Aerospace and defence giant Rolls-Royce rose as it said that following a successful equity raise, it has now established its small modular reactor business as part of the UK government’s net zero strategy.

BT was also in the black after an upgrade to ‘buy’ from ‘hold’ at Berenberg.

Watches of Switzerland surged to the top of the FTSE 250 after upgrading its full-year outlook following a better-than-expected first-half performance.

On the downside, housebuilder Persimmon fell even as it said it was on track to grow new home completions by 10% this year and targeted a return to pre-pandemic trading levels by 2022.

DCC lost ground even as the sales, marketing and support services group reported a jump in first-half profit and revenue and said full-year results were on track to meet market expectations.

Market Movers

FTSE 100 (UKX) 7,305.75 0.07%
FTSE 250 (MCX) 23,604.97 0.28%
techMARK (TASX) 4,644.66 0.33%

FTSE 100 - Risers

Associated British Foods (ABF) 1,986.50p 6.89%
Rolls-Royce Holdings (RR.) 147.04p 3.72%
BT Group (BT.A) 161.85p 2.15%
Melrose Industries (MRO) 167.35p 1.42%
Next (NXT) 8,098.00p 1.38%
Flutter Entertainment (CDI) (FLTR) 12,650.00p 1.36%
Barratt Developments (BDEV) 664.00p 1.28%
Informa (INF) 540.20p 1.16%
WPP (WPP) 1,088.50p 1.07%
Taylor Wimpey (TW.) 157.30p 0.96%

FTSE 100 - Fallers

DCC (CDI) (DCC) 6,180.00p -1.69%
Smith & Nephew (SN.) 1,336.00p -1.18%
Pershing Square Holdings Ltd NPV (PSH) 2,990.00p -1.16%
Admiral Group (ADM) 2,870.00p -1.03%
Entain (ENT) 1,991.00p -0.99%
Bunzl (BNZL) 2,729.00p -0.80%
Burberry Group (BRBY) 1,977.50p -0.78%
International Consolidated Airlines Group SA (CDI) (IAG) 176.06p -0.74%
Darktrace (DARK) 645.00p -0.69%
Lloyds Banking Group (LLOY) 48.82p -0.68%

FTSE 250 - Risers

Watches of Switzerland Group (WOSG) 1,240.00p 9.35%
Sirius Real Estate Ltd. (SRE) 135.40p 2.11%
Reach (RCH) 324.00p 2.05%
Airtel Africa (AAF) 124.90p 1.96%
IMI (IMI) 1,808.00p 1.40%
Cineworld Group (CINE) 66.08p 1.32%
Kainos Group (KNOS) 2,060.00p 1.28%
Biffa (BIFF) 406.50p 1.25%
Capita (CPI) 46.87p 1.23%
C&C Group (CDI) (CCR) 254.20p 1.19%

FTSE 250 - Fallers

Ashmore Group (ASHM) 312.40p -1.51%
easyJet (EZJ) 641.20p -1.41%
FirstGroup (FGP) 101.00p -1.27%
AO World (AO.) 131.50p -1.20%
Direct Line Insurance Group (DLG) 284.80p -1.18%
Cairn Energy (CNE) 189.00p -0.84%
SSP Group (SSPG) 270.50p -0.77%
Virgin Money UK (VMUK) 175.00p -0.77%
Wood Group (John) (WG.) 202.30p -0.74%
Petropavlovsk (POG) 22.24p -0.71%