London close: Stocks mixed on renewed interest rate concerns
London stocks were mixed by the close on Tuesday, with Ocado in the red after disappointing results, as data showed that food inflation hit a record high.
The FTSE 100 ended the session down 0.74% at 7,876.28, while the FTSE 250 managed gains of 0.09% to 19,903.28.
Sterling was also in the green, last rising 0.21% on the dollar to trade at $1.2089, and advancing 0.31% against the euro to change hands at €1.1405.
“European markets have finished a positive month on the back foot after the latest flash CPI numbers for February from France and Spain surprised to the upside, pushing up yields, and prompting traders to price a peak ECB rate of 4% for the first time,” said CMC Markets chief market analyst Michael Hewson.
“UK grocery price inflation also rose to a new record high, rising 17.1% in February according to Kantar, raising the prospect that the Bank of England may have to keep hiking rates in the coming months, if only to keep a floor under the pound.”
In economic news, grocery price inflation in the UK hit a new high in the four weeks to 19 February, according to data provider Kantar.
Inflation reached 17.1% - the highest level ever recorded by Kantar, pushing the average annual bill up by £811.
Take-home grocery sales rose 8.8% over the four-week period and 8.1% over the 12-week period.
“Shoppers have been facing sustained price rises for some time now and this February marks a full year since monthly grocery inflation climbed above 4%,” said Fraser McKevitt, head of retail and consumer insight at Kantar.
“This is having a big impact on people’s lives.
“Our latest research shows that grocery price inflation is the second most important financial issue for the public behind energy costs, with two-thirds of people concerned by food and drink prices, above public sector strikes and climate change.”
McKevitt said one quarter said they were struggling financially, versus one-in-five this time last year.
On the continent, French and Spanish inflation rose in February according to preliminary figures, putting more pressure on the European Central Bank to hike rates.
Headline inflation in France ticked up to 6.2% year-over-year from 6% in January, coming in above consensus expectations of 6.1%.
Meanwhile, the harmonised index came in at 7.2% in February, up from 7% the month before and above consensus expectations for no change.
The jump mostly reflected higher food and services inflation.
ING economist Charlotte de Montpellier said the data indicated that French inflation had still not peaked.
"Both headline and core inflation are likely to continue to rise in the coming months, giving the ECB further reason to continue raising rates beyond the first quarter," she said.
Across the pond, house price gains in the US continued to slow at the end of 2022, according to some closely-followed survey results.
In December, the S&P CoreLogic Case-Shiller 20-city house price index fell at a non-seasonally adjusted month-on-month pace of 0.9%.
That pushed the annual rate of increase down to 4.6%, against Barclays expectations for 6.2%, and from a previous 6.8%.
Finally on data, factory sector activity in the Chicago area slipped slightly in February, although the details were apparently less glum.
The Chicago Business Barometer slipped by 0.7 points from the month before to reach 43.6.
Economists had been anticipating a slight improvement to 45.0.
On London’s equity markets, online grocer and technology company Ocado Group slid 12.16% after it posted wider losses as the cost-of-living crisis and return to normal shopping habits after the Covid pandemic hammered its joint venture with Marks & Spencer.
The group posted a pre-tax loss of £501m for the year to 27 November 2022, compared with a loss of £179m a year earlier and worse than analyst forecasts of a £399m loss.
Croda International was 5.28% lower after it posted a rise in full-year sales and profit but said 2023 was set to be more weighted to the second half than the prior year.
Travis Perkins was 4.02% weaker after the builders’ merchant reported a fall in annual profit due to a tougher housing market and restructuring costs, which offset a rise in sales.
Product testing and certification company Intertek Group was in the red by 4.57% after full-year results.
On the upside, St. James’s Place closed up 3.6% after well-received results.
Asset manager Abrdn gained 5.25% despite saying it swung to a full-year loss, citing volatile markets and surging investments in what the company called "one of the hardest investing years in living memory".
Man Group surged 8.72% after it reported a rise in full-year pre-tax profit and assets under management amid industry-beating net inflows.
Outsourcer Serco Group was 4.7% higher after it hiked its dividend and posted a jump in full-year profit and revenue despite a decline in Covid-related work.
Outside the FTSE 350, online electrical retailer AO World rocketed 25.16% after it upgraded its profit guidance for the second time this year - and the third since November - citing the benefits of its cost-savings drive.
Reporting by Josh White for Sharecast.com. Additional reporting by Michele Maatouk and Alexander Bueso.
Market Movers
FTSE 100 (UKX) 7,876.28 -0.74%
FTSE 250 (MCX) 19,903.28 0.09%
techMARK (TASX) 4,605.74 -0.88%
FTSE 100 - Risers
Abrdn (ABDN) 224.60p 5.25%
Kingfisher (KGF) 287.20p 3.94%
St James's Place (STJ) 1,281.50p 3.60%
M&G (MNG) 214.30p 3.08%
Associated British Foods (ABF) 2,014.00p 2.00%
Antofagasta (ANTO) 1,580.00p 1.67%
Lloyds Banking Group (LLOY) 52.62p 1.60%
NATWEST GROUP (NWG) 292.30p 1.46%
Prudential (PRU) 1,269.50p 1.44%
Anglo American (AAL) 2,884.50p 1.35%
FTSE 100 - Fallers
Ocado Group (OCDO) 548.80p -12.16%
Croda International (CRDA) 6,570.00p -5.17%
Intertek Group (ITRK) 4,174.00p -4.57%
Bunzl (BNZL) 2,964.00p -4.02%
Imperial Brands (IMB) 2,005.00p -2.91%
RS Group (RS1) 977.50p -2.54%
Spirax-Sarco Engineering (SPX) 11,685.00p -2.26%
British American Tobacco (BATS) 3,143.50p -2.16%
National Grid (NG.) 1,048.00p -2.06%
Diageo (DGE) 3,529.00p -1.93%
FTSE 250 - Risers
Man Group (EMG) 265.60p 8.72%
Helios Towers (HTWS) 110.30p 7.40%
Serco Group (SRP) 156.00p 4.70%
888 Holdings (DI) (888) 70.65p 4.43%
Digital 9 Infrastructure NPV (DGI9) 84.30p 4.33%
Jupiter Fund Management (JUP) 146.40p 4.13%
Abrdn Private Equity Opportunities Trust (APEO) 467.00p 3.93%
Discoverie Group (DSCV) 855.00p 3.89%
TP Icap Group (TCAP) 193.00p 3.76%
Wetherspoon (J.D.) (JDW) 562.50p 3.69%
FTSE 250 - Fallers
Carnival (CCL) 779.40p -4.42%
Travis Perkins (TPK) 1,006.00p -4.02%
Senior (SNR) 166.80p -3.81%
Mitie Group (MTO) 80.80p -3.69%
Genuit Group (GEN) 311.00p -3.69%
PZ Cussons (PZC) 182.20p -3.09%
Wizz Air Holdings (WIZZ) 2,580.00p -3.04%
Spire Healthcare Group (SPI) 240.50p -3.02%
Dechra Pharmaceuticals (DPH) 2,734.00p -2.98%
Babcock International Group (BAB) 328.20p -2.67%