London open: Stocks slide amid inflation concerns

At 0905 BST, the FTSE 100 was down 1.3% at 6,985.57.

Neil Wilson, chief market analyst at Markets.com, said: "Inflation/stagflation, supply chain problems, the US debt ceiling, an energy crisis as natural gas prices soar to new records in Europe and the UK, tighter monetary policy from central banks, worries about the Chinese property sector - all swirling around equity markets this week and not going away any time soon.

"Chiefly this morning we might say that rising Treasury yields and soaring energy prices are conspiring to knock risk appetite."

On the macro front, investors will be eyeing Markit's UK construction PMI for September at 0930 BST and the US ADP report at 1315 BST.

Ipek Ozkardeskaya, senior analyst at Swissquote, said: "The US economy is expected to have added near 430,000 private jobs in September. We are now talking about numbers far below the 800,000 or a million job additions of the post pandemic recovery.

"Any weakness in the jobs figure could dampen the market mood again, as soft economic data could no longer revive the central bank doves, as the spike in energy prices continue fueling expectations of higher inflation for longer.

"Therefore, central banks will be forced to cool down the overheating in inflation rather than trying to boost recovery. As a result, any softness in data could send the US equities back below their 100-DMA levels."

In equity markets, Imperial Brands was trading lower despite saying it was track to meet full-year expectations as the business continues to perform well.

Homeserve was knocked lower by a downgrade to ‘underperform’ from ‘outperform’ at Exane.

On the upside, supermarket chain Tesco rallied as it lifted full-year earnings guidance after strong first-half sales helped interim profits to more than double against a backdrop of labour shortages and cost pressures. The company also said it was starting an ongoing share buyback with the first tranche of £500m to be bought within a year.

Recruiter PageGroup was a high riser after it lifted its guidance for full-year operating profit to around £155m from between £125m and £135m, as it reported a jump in third-quarter gross profit. Peer Hays also gained.

Elsewhere, HSBC was lifted by an upgrade to ‘buy’ at UBS.

Market Movers

FTSE 100 (UKX) 6,985.57 -1.29%
FTSE 250 (MCX) 22,447.84 -1.24%
techMARK (TASX) 4,493.89 -1.66%

FTSE 100 - Risers

Tesco (TSCO) 265.20p 4.82%
HSBC Holdings (HSBA) 402.35p 2.38%
Polymetal International (POLY) 1,253.50p 1.05%
Sainsbury (J) (SBRY) 302.00p 0.87%
Standard Chartered (STAN) 444.70p 0.66%
Pearson (PSON) 722.00p 0.25%
Fresnillo (FRES) 778.40p 0.05%
Morrison (Wm) Supermarkets (MRW) 285.60p 0.00%
Rio Tinto (RIO) 4,801.00p -0.12%
Lloyds Banking Group (LLOY) 46.44p -0.17%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 1,030.50p -3.60%
Whitbread (WTB) 3,242.00p -3.51%
Next (NXT) 7,776.00p -3.31%
Melrose Industries (MRO) 163.65p -3.19%
Auto Trader Group (AUTO) 564.00p -3.03%
Informa (INF) 565.40p -2.99%
InterContinental Hotels Group (IHG) 4,737.00p -2.95%
Persimmon (PSN) 2,502.00p -2.80%
Flutter Entertainment (CDI) (FLTR) 14,175.00p -2.78%
Taylor Wimpey (TW.) 148.90p -2.74%

FTSE 250 - Risers

Pagegroup (PAGE) 654.50p 6.86%
Hays (HAS) 159.60p 2.57%
Apax Global Alpha Limited (APAX) 224.00p 1.82%
Syncona Limited NPV (SYNC) 176.60p 1.61%
Endeavour Mining (EDV) 1,650.00p 1.23%
Diversified Energy Company (DEC) 122.00p 1.16%
Templeton Emerging Markets Inv Trust (TEM) 177.40p 0.91%
Schroder Oriental Income Fund Ltd. (SOI) 260.50p 0.77%
Pantheon International (PIN) 2,965.00p 0.68%
TI Fluid Systems (TIFS) 242.00p 0.62%

FTSE 250 - Fallers

IP Group (IPO) 126.20p -7.21%
Homeserve (HSV) 802.00p -6.53%
Trustpilot Group (TRST) 364.80p -4.35%
SSP Group (SSPG) 263.10p -4.05%
Rank Group (RNK) 161.00p -3.59%
Draper Esprit (GROW) 965.00p -3.50%
Crest Nicholson Holdings (CRST) 354.00p -3.49%
Network International Holdings (NETW) 330.70p -3.47%
Moonpig Group (MOON) 288.40p -3.35%
Future (FUTR) 3,500.00p -3.31%