London close: Stocks rise as investors look to US data

The FTSE 100 index rose 0.66% to finish at 8,193.51 points, while the FTSE 250 saw an even more substantial gain of 1.37%, ending the day at 20,927.76 points.

In currency markets, sterling was last up 0.48% on the dollar, trading at $1.2847, while it rose 0.37% against the euro to change hands at €1.1868.

Investors were closely monitoring Federal Reserve chair Jerome Powell's second day of testimony to Congress, as well as anticipating this week’s upcoming US inflation data.

“The FTSE 100 continues its disappointing performance of the past month, unable to push higher despite the passing of the UK and French elections, and an upgrade for airline stocks,” said IG chief market analyst Chris Beauchamp.

“While the Nasdaq 100 holds at a record high, and European markets rediscover some positive momentum, it seems the FTSE 100’s low valuation has waned in its attractiveness.

“After the big gains through to early May, investors seem to have run out of reasons to invest in UK plc.”

Beauchamp added that, faced with underwhelming Chinese data, and expected supply increases thanks to Hurricane Beryl’s swerving of key production facilities, oil prices had briefly hit a two-week low.

“The summer demand hopes that took prices to a one-month high have been swiftly replaced by worries about weak Chinese demand. Investors continue to watch the Middle East however, anxious about the lingering possibility of Israel widening its conflict to take on Hezbollah.”

Inflation unexpectedly slows in China, RBNZ keeps rates on hold

In economic news, China's inflation rate unexpectedly slowed in June, raising concerns about weak consumer demand and its impact on the economic recovery.

The National Bureau of Statistics reported a consumer price index (CPI) increase of just 0.2% year-on-year, down from 0.3% in the previous two months and below the forecasted 0.4%.

Despite headline prices rising since February after months of deflation, June's core CPI, excluding food and energy, remained at a 0.6% year-on-year increase, unchanged from May.

Producer prices also fell by 0.8% year-on-year in June, marking the 21st consecutive month of deflation, though the decline was less severe than May's -1.4%.

The Reserve Bank of New Zealand (RBNZ) meanwhile kept interest rates steady for the eighth consecutive meeting on Wednesday, maintaining the official cash rate at 5.5%.

It expressed confidence that inflation would return to its target range within six months.

The RBNZ's statement indicated that while monetary policy would remain restrictive, the extent of this restraint would lessen over time as inflation pressures decline.

Inflation in New Zealand fell to 4% in the first quarter of 2024 from 4.7% in the previous quarter and is expected to return to the 1-3% target range by the year's second half.

The central bank noted that high rates have significantly curbed consumer price inflation and eased price pressures on imported goods and services.

On home shores, Bank of England chief economist Huw Pill expressed concerns about the persistence of inflation in the UK during a speech at Asia House in London.

Pill indicated that inflation might remain high longer than anticipated, despite current restrictive monetary policies aimed at controlling it.

He emphasised the need for the Monetary Policy Committee (MPC) to ensure that the cumulative restrictive measures are sufficient to bring inflation back to the 2% target.

With annual inflation rates still close to 6%, Pill highlighted ongoing strong price pressures in services and wage growth.

However, he also noted that recent data suggests these pressures might be starting to ease, aligning with the goal of reducing inflation.

Airlines fly higher, Crest Nicholson and Bellway in the red

On London’s equity markets, British Airways and Iberia owner IAG climbed 3.15% following a double upgrade to ‘overweight’ by Morgan Stanley.

Low-cost carriers easyJet and Wizz Air Holdings were also in the green, rising 2.73% and 2.51%, respectively.

Travis Perkins surged 7.12% after announcing Pete Redfern, former CEO of Taylor Wimpey, as its new chief executive.

SSP Group jumped 10.36% after the food outlet operator reaffirmed its annual guidance and reported a 16% rise in third-quarter sales driven by strong leisure travel demand.

Like-for-like revenue increased by 6%.

Grafton Group saw a reversal of earlier losses, ending the day up 3.54%.

Despite a 4.4% drop in revenue for the first half of the year due to reduced consumer discretionary spending, the building and DIY supplies group managed to recover in the market.

Direct Line Insurance Group added 3.27% after the insurer announced plans to list its flagship motor brand on price comparison websites for the first time, aiming to boost profits and cut costs.

The move was part of a broader strategy unveiled during its capital markets day, acknowledging the preference of 90% of customers for price comparison sites.

On the downside, Barratt Developments dropped 1.77% after warning that completions could be up to 7% lower this year, impacted by rising mortgage costs.

Crest Nicholson Holdings fell 1.01% despite earlier gains, after it indicated it was "minded" to recommend Bellway’s revised £720m takeover offer.

Bellway’s third non-binding offer this month, valuing Crest Nicholson at 273p per share, was under consideration after two previous rejections.

The latest proposal would include 0.099 Bellway shares for each Crest Nicholson share, plus a 4p per share dividend.

Bellway shares also declined by 0.93% amid the takeover discussions with Crest Nicholson.

Elsewhere, JD Wetherspoon slipped 2.02% even after the pub chain anticipated meeting market profit expectations, driven by strong sales momentum towards the end of its financial year.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,193.51 0.66%
FTSE 250 (MCX) 20,927.76 1.37%
techMARK (TASX) 4,787.92 0.70%

FTSE 100 - Risers

Fresnillo (FRES) 608.00p 3.84%
Entain (ENT) 660.20p 3.16%
International Consolidated Airlines Group SA (CDI) (IAG) 178.00p 2.95%
Prudential (PRU) 735.20p 2.80%
easyJet (EZJ) 477.90p 2.69%
Centrica (CNA) 139.70p 2.57%
Schroders (SDR) 376.80p 2.56%
Sainsbury (J) (SBRY) 260.80p 2.52%
Next (NXT) 8,892.00p 2.51%
United Utilities Group (UU.) 1,066.00p 2.30%

FTSE 100 - Fallers

WPP (WPP) 727.20p -1.86%
Sage Group (SGE) 1,035.50p -1.80%
Barratt Developments (BDEV) 485.10p -1.24%
Smith (DS) (SMDS) 415.20p -1.14%
Halma (HLMA) 2,652.00p -0.86%
Pershing Square Holdings Ltd NPV (PSH) 4,210.00p -0.85%
Darktrace (DARK) 584.00p -0.68%
Smurfit Westrock (DI) (SWR) 3,492.00p -0.51%
Frasers Group (FRAS) 836.50p -0.48%
BT Group (BT.A) 139.85p -0.43%

FTSE 250 - Risers

SSP Group (SSPG) 172.60p 10.36%
W.A.G Payment Solutions (WPS) 67.80p 7.28%
Travis Perkins (TPK) 858.00p 7.12%
Wood Group (John) (WG.) 207.20p 6.58%
Drax Group (DRX) 559.50p 4.87%
Coats Group (COA) 84.50p 4.06%
Discoverie Group (DSCV) 731.00p 3.98%
Ocado Group (OCDO) 362.70p 3.96%
Man Group (EMG) 257.40p 3.87%
Endeavour Mining (EDV) 1,831.00p 3.86%

FTSE 250 - Fallers

SThree (STEM) 424.50p -2.86%
Wetherspoon (J.D.) (JDW) 753.00p -2.02%
Redrow (RDW) 682.50p -1.87%
TI Fluid Systems (TIFS) 128.00p -1.54%
Hilton Food Group (HFG) 909.00p -1.41%
Ascential (ASCL) 353.80p -1.34%
Bytes Technology Group (BYIT) 526.00p -0.94%
Auction Technology Group (ATG) 477.00p -0.93%
Bellway (BWY) 2,556.00p -0.93%
Victrex plc (VCT) 1,110.00p -0.89%