London open: FTSE edges up ahead of rate decisions

London stocks edged higher in early trade on Wednesday, taking their cue from a positive finish on Wall Street, as investors eyed policy announcements from the Federal Reserve, Bank of England and European Central Bank.

At 0825 GMT, the FTSE 100 was up 0.3% at 7,794.87.

The Fed’s rate announcement is due after the close of London markets, at 1900 GMT, while the BoE and ECB will make their announcements on Thursday.

Danske Bank said: "The main event today will be the FOMC meeting. Anything but a 25bp hike would be a major surprise, and the focus will be on guidance about the terminal rate level.

"We expect the communication to be on the hawkish side, markets price in cumulative 58bp worth of hikes by next June while we look for three consecutive 25bp hikes, which would take the Fed Funds rate to 5.00-5.25% by May."

On home shores, data out earlier showed that shop price inflation hit fresh highs last month as the cost of food soared.

According to the latest BRC-NielsenIQ Shop Price Index, annual shop price inflation was 8% in January, up from 7.3% in December, above the three-month average of 7.5% and a record high. Within that, non-food jumped 5.1% year-on-year from 4.4% a month earlier, while food surged 13.8%, compared to 13.3% in December. It is the highest inflation rate in the food category on record.

Helen Dickinson, chief executive of the British Retail Consortium, said retailers had reduced discounting in January while input costs had continued to rise.

"Ambient food inflation accelerated the most, as wholesale and bulk prices grew, particularly for sugar and alcohol. Fresh food prices also remained high due to increased food production costs as well as elevated wholesale fruit and vegetable prices," she said.

"With global food costs coming down from their 2022 high and the cost of oil falling, we expect to see some inflationary pressures easing. However, as retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak - and will likely remain high in the near term."

Investors were also mulling the latest figures from Nationwide, which showed that house prices fell for the fifth month in a row, with annual price growth slowing to 1.1% in January as surging interest rates and inflation continued to hammer mortgage holders.

The average sale price fell 0.6% to £258,297 in January compared with £262,068 in December.

In equity markets, Standard Chartered was a high riser after the Financial Times suggested that First Abu Dhabi Bank could look at the company again after backing away from a bid last month.

Halma rallied after the safety technology company announced the acquisition of Thermocable for its safety sector fire detection unit, Apollo Fire Detectors, for £22m.

ITV advanced after Reuters reported that veteran Hollywood producer Peter Chernin and French TV production company Banijay's parent had expressed interest in the broadcaster's Studios segment.

Ladbrokes owner Entain gained after it lifted full-year earnings expectations as it reported a record fourth quarter for both net gaming revenues and active customers.

GSK ticked higher after the drug giant said fourth-quarter profits came in ahead of expectations, boosted by strong demand for its blockbuster shingles vaccine.

Following two days of weakness on the back of a short seller attack, Darktrace traded up as the cyber security firm announced a buyback of up to 35m shares.

On the downside, telecoms giant Vodafone slumped after it said revenues fell in the third quarter as the economic slowdown hit trading in Continental Europe and offset a good performance in the UK.

Housebuilder Persimmon was hit by a downgrade to ‘sell’ at Citi.

Market Movers

FTSE 100 (UKX) 7,794.87 0.30%
FTSE 250 (MCX) 19,886.27 0.17%
techMARK (TASX) 4,459.38 -0.15%

FTSE 100 - Risers

Standard Chartered (STAN) 693.40p 2.09%
Halma (HLMA) 2,181.00p 1.54%
Entain (ENT) 1,508.00p 1.31%
Rentokil Initial (RTO) 497.00p 1.28%
Smiths Group (SMIN) 1,748.50p 1.24%
Ocado Group (OCDO) 654.00p 1.24%
Mondi (MNDI) 1,541.50p 1.21%
Flutter Entertainment (CDI) (FLTR) 12,685.00p 1.08%
Beazley (BEZ) 672.00p 1.05%
Pershing Square Holdings Ltd NPV (PSH) 2,930.00p 1.03%

FTSE 100 - Fallers

Vodafone Group (VOD) 91.11p -2.16%
Persimmon (PSN) 1,395.00p -1.20%
Rolls-Royce Holdings (RR.) 104.90p -0.79%
Fresnillo (FRES) 815.40p -0.73%
Aviva (AV.) 452.40p -0.72%
BAE Systems (BA.) 850.60p -0.72%
Endeavour Mining (EDV) 1,896.00p -0.68%
Hiscox Limited (DI) (HSX) 1,117.00p -0.67%
Haleon (HLN) 322.15p -0.65%
HSBC Holdings (HSBA) 592.80p -0.60%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 172.00p 4.24%
Currys (CURY) 66.45p 2.63%
Darktrace (DARK) 215.50p 2.52%
ITV (ITV) 82.90p 2.50%
Baltic Classifieds Group (BCG) 155.00p 1.97%
Fidelity China Special Situations (FCSS) 293.00p 1.91%
Moonpig Group (MOON) 122.70p 1.83%
Coats Group (COA) 74.00p 1.79%
Chemring Group (CHG) 287.00p 1.77%
Close Brothers Group (CBG) 986.00p 1.75%

FTSE 250 - Fallers

TI Fluid Systems (TIFS) 113.40p -4.71%
QinetiQ Group (QQ.) 349.00p -3.80%
Hochschild Mining (HOC) 66.80p -2.27%
UK Commercial Property Reit Limited (UKCM) 56.50p -2.25%
Mitchells & Butlers (MAB) 160.90p -2.25%
Molten Ventures (GROW) 350.00p -2.13%
Ibstock (IBST) 165.10p -2.08%
C&C Group (CDI) (CCR) 157.70p -2.05%
Premier Foods (PFD) 110.00p -1.79%
PureTech Health (PRTC) 250.00p -1.77%