London open: Stocks edge up ahead of US inflation figures
London stocks edged up in early trade on Wednesday, lifted by well-received results from the likes of ITV and Marks & Spencer, as investors eyed the latest US inflation reading.
At 0835 GMT, the FTSE 100 was up 0.3% at 7,295.23.
CMC Markets analyst Michael Hewson said: "Today’s US CPI numbers for October are expected to push above the levels seen back in 2008, when they hit 5.6%, with expectations we could see a rise to 5.9%, which would be the highest level since 1990, while core prices are expected to come in at 4.3%, also a multiyear high.
"With a number of Fed policymakers making louder noises about the need for rate hikes next year, a strong number here could well prompt a rebound in US yields which have declined quite sharply in the last week or so, with the 10-year down over 15 basis points from last week’s highs."
Investors were also mulling the latest inflation data out of China, which showed that factory gate prices surged to a 26-year high in October amid a power crisis.
According to figures released by the National Bureau of Statistics, producer price inflation rose from 10.7% year-on-year in September to 13.5%, versus expectations for 12.3%.
Meanwhile, consumer price inflation rose to a 13-month high of 1.5% in October from 0.7% the month before. This was due partly to a rise in fuel price inflation to a new high of 31.4% from 22.8%.
Julian Evans-Pritchard, senior China economist at Capital Economics, said the jump in producer price inflation largely reflects temporary disruption in a handful of industries from energy shortages, which are already easing.
"There are still few signs of wider price pressures and we think PPI inflation is likely to drop back in the coming months while CPI inflation looks set to remain muted for the foreseeable future," he said.
"We continue to think that consumer price inflation will remain below 2% in the coming quarters and that inflation is unlikely to be a major constraint on the PBOC’s ability to loosen monetary policy."
In equity markets, ITV was the standout gainer on the FTSE 100 after the broadcaster said it expected advertising revenue to hit new records this year, as the economy opened up after the impact of the Covid pandemic.
Aveva gained even as the software group reported a widening of its first-half losses.
Food and clothing retailer Marks & Spencer surged to the top of the FTSE 250 after it said annual profits would be ahead of expectations as interim earnings rose above pre-pandemic levels.
On the downside, Babcock was knocked lower by a downgrade to ‘equalweight’ at Barclays.
Pub chain Wetherspoons also lost ground after it reported a drop in sales versus pre-pandemic trading, as its older, more cautious customers made fewer visits to pubs.
Market Movers
FTSE 100 (UKX) 7,295.23 0.29%
FTSE 250 (MCX) 23,451.21 0.36%
techMARK (TASX) 4,637.41 0.27%
FTSE 100 - Risers
ITV (ITV) 116.30p 6.40%
Aveva Group (AVV) 3,592.00p 2.34%
Johnson Matthey (JMAT) 2,786.00p 2.20%
BP (BP.) 351.05p 1.92%
Next (NXT) 8,152.00p 1.70%
Barclays (BARC) 192.76p 1.45%
Associated British Foods (ABF) 2,036.00p 1.44%
International Consolidated Airlines Group SA (CDI) (IAG) 176.12p 1.39%
Sainsbury (J) (SBRY) 292.60p 1.00%
Standard Chartered (STAN) 452.70p 0.96%
FTSE 100 - Fallers
Fresnillo (FRES) 917.60p -0.95%
Prudential (PRU) 1,468.00p -0.81%
B&M European Value Retail S.A. (DI) (BME) 619.60p -0.80%
Smith & Nephew (SN.) 1,321.00p -0.71%
Halma (HLMA) 3,004.00p -0.56%
Entain (ENT) 1,962.00p -0.51%
Croda International (CRDA) 9,564.00p -0.50%
Admiral Group (ADM) 2,889.00p -0.41%
BT Group (BT.A) 162.10p -0.34%
Ocado Group (OCDO) 1,736.00p -0.32%
FTSE 250 - Risers
Marks & Spencer Group (MKS) 224.90p 15.66%
Oxford Instruments (OXIG) 2,425.00p 5.21%
Investec (INVP) 358.80p 2.81%
Cairn Energy (CNE) 193.30p 1.90%
Workspace Group (WKP) 837.00p 1.89%
BlackRock Smaller Companies Trust (BRSC) 2,015.00p 1.56%
Hilton Food Group (HFG) 1,188.00p 1.54%
Travis Perkins (TPK) 1,542.50p 1.45%
Essentra (ESNT) 312.00p 1.30%
TUI AG Reg Shs (DI) (TUI) 249.80p 1.30%
FTSE 250 - Fallers
Babcock International Group (BAB) 309.00p -4.28%
Wetherspoon (J.D.) (JDW) 989.50p -3.84%
Clarkson (CKN) 3,835.00p -2.17%
Indivior (INDV) 255.20p -2.07%
Cineworld Group (CINE) 64.62p -1.43%
Tritax Eurobox (GBP) (EBOX) 111.00p -1.25%
Playtech (PTEC) 727.00p -1.09%
Caledonia Investments (CLDN) 3,740.00p -1.06%
Oxford Biomedica (OXB) 1,500.00p -1.06%
Trainline (TRN) 319.20p -1.05%