London open: Stocks steady after heavy losses; food prices fall

London stocks were steady in early trade on Tuesday following heavy losses in the previous session, as investors mulled the latest UK shop price data.

At 0840 BST, the FTSE 100 was flat at 7,509.33.

According to the latest shop price index from the British Retail Consortium and Nielsen, month-on-month shop price inflation fell to its lowest level in a year in September, with food prices falling for the first time in over two years.

The index, which measures price changes of 500 of the most commonly bought items in the UK, eased to an annual rate of 6.2% last month, down 70 basis points on August. This was below the three-month rolling average of 6.8% and the lowest level since September 2022.

The slowdown came as food-price inflation fell to 9.9% from 11.5%, and was significantly under the three-month average of 11.4%.

In month-on-month terms, food prices actually declined, which the BRC put down to "fierce competition" between retailers.

"Customers who bought dairy, margarine, fish and vegetables - all typically own-brand lines - will have found lower prices compared to last month. Households also benefitted from price cuts for school uniforms and other back-to-school essentials," said Helen Dickinson, the BRC's chief executive.

Looking ahead, Dickinson expects shop price inflation to continue to fall over the rest of 2023 but remained cautious due to a number of risk factors, including high interest rates, climbing oil prices, global shortages of sugar, as well as the supply chain disruption from the war in Ukraine.

"Retailers will continue to do all they can to support their customers and bring prices down, especially as households face being squeezed by higher energy and mortgage bills."

In equity markets, luxury fashion brand Burberry was knocked lower by a downgrade to ‘sell’ at UBS.

High street bakery chain Greggs was also weaker despite saying it expects to hit targets this year after a solid third quarter.

Victoria Scholar, head of investment at Interactive Investor, said: "The CEO Roisin Currie told Reuters the company is not planning to increase prices pre-Christmas and there is still significant inflation in the market, such as staff wages. The comments appear to be weighing on its share price."

Outside the FTSE 350, fast fashion retailer Boohoo slid after saying it swung to a first-half loss and cutting its full-year revenue outlook. It pointed to a slower-than-expected volume recovery and the continued targeting of more profitable sales within labels.

Market Movers

FTSE 100 (UKX) 7,509.33 -0.02%
FTSE 250 (MCX) 17,898.05 -0.44%
techMARK (TASX) 4,217.82 -0.06%

FTSE 100 - Risers

Rightmove (RMV) 561.20p 1.23%
Hikma Pharmaceuticals (HIK) 2,086.00p 1.16%
Auto Trader Group (AUTO) 617.60p 0.85%
GSK (GSK) 1,496.60p 0.85%
Flutter Entertainment (CDI) (FLTR) 13,355.00p 0.83%
Unilever (ULVR) 4,057.00p 0.81%
Haleon (HLN) 340.60p 0.75%
London Stock Exchange Group (LSEG) 8,234.00p 0.66%
Admiral Group (ADM) 2,337.00p 0.65%
Pershing Square Holdings Ltd NPV (PSH) 2,998.00p 0.54%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,845.00p -2.56%
United Utilities Group (UU.) 927.40p -2.44%
Ocado Group (OCDO) 574.40p -2.11%
Severn Trent (SVT) 2,301.00p -2.04%
SSE (SSE) 1,525.50p -1.74%
National Grid (NG.) 935.00p -1.56%
CRH (CDI) (CRH) 4,425.00p -1.49%
Endeavour Mining (EDV) 1,534.00p -1.22%
Fresnillo (FRES) 528.80p -1.16%
Airtel Africa (AAF) 122.50p -1.13%

FTSE 250 - Risers

Baltic Classifieds Group (BCG) 201.00p 4.58%
Premier Foods (PFD) 122.00p 3.92%
Keller Group (KLR) 770.00p 2.67%
Mitchells & Butlers (MAB) 218.60p 2.44%
CAB Payments Holdings (CABP) 233.50p 2.41%
Kainos Group (KNOS) 1,140.00p 2.33%
Foresight Solar Fund Limited (FSFL) 91.90p 1.77%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 273.50p 1.67%
Twentyfour Income Fund Limited Ord Red (TFIF) 99.90p 1.63%
Edinburgh Worldwide Inv Trust (EWI) 140.00p 1.60%

FTSE 250 - Fallers

Petershill Partners (PHLL) 141.20p -4.85%
AJ Bell (AJB) 252.40p -4.32%
SThree (STEM) 349.00p -3.86%
Ithaca Energy (ITH) 168.80p -3.43%
Drax Group (DRX) 416.40p -3.30%
Helios Towers (HTWS) 72.70p -2.81%
Aston Martin Lagonda Global Holdings (AML) 269.00p -2.61%
Vistry Group (VTY) 864.00p -2.43%
IntegraFin Holding (IHP) 224.80p -2.26%
Marshalls (MSLH) 243.20p -2.17%