London open: Stocks edge lower amid inflation concerns

London stocks edged lower in early trade on Wednesday amid concerns about rising inflation after the latest set of figures from China and ahead of US data later in the week.

At 0825 BST, the FTSE 100 was down 0.3% at 7,074.80.

Richard Hunter, head of markets at Interactive Investor, said: "Markets remain in a holding pattern ahead of the next economic release, which could serve to reignite the inflation debate.

"Tomorrow’s consumer price index reading in the US is expected to reveal that the total annual inflation rate rose to 4.7% and core inflation to 3.4%, above the Federal Reserve’s target of 2%. Certainly, any numbers above these levels would draw comment from the Fed, who otherwise fully expect inflationary pressures to diminish over the coming months.

"This in turn would lessen the requirement to tone down the monetary easing programme, kicking the likelihood of an imminent interest rate rise into the long grass.

"However, this would also come after Chinese inflation readings which showed strong gains in consumer and producer prices, prompting more concerns that the inflation picture globally is under upward pressure."

Data released earlier by the National Bureau of Statistics showed that China’s producer price inflation jumped to 9% in May from 6.8% in April, marking the highest level since 2008 and coming in above consensus expectations of 8.5%. Meanwhile, CPI rose to 1.3% in May from 0.9% the month before, compared to expectations of 1.6%.

In equity markets, Upper Crust owner SSP was under the cosh after it reported wider interim losses as Covid travel restrictions saw most of its outlets closed, but said it had seen an improvement in trading in the UK and North America since the end of March.

The company posted a pre-tax loss of £299.7m, compared with a £34m loss a year ago as the pandemic started to hit global travel. Revenue plunged 78.8% to £256.7m.

On the upside, artificial hip and knee maker Smith & Nephew was the standout gainer on the FTSE 100 after an upgrade to ‘outperform’ at Credit Suisse.

British Airways and Iberia owner IAG flew higher even after the Competition and Markets Authority said it will be investigating BA as it may have broken consumer law by not offering refunds to customers who couldn’t legally take flights during the pandemic.

Market Movers

FTSE 100 (UKX) 7,074.80 -0.29%
FTSE 250 (MCX) 22,854.21 -0.18%
techMARK (TASX) 4,391.69 -0.09%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,517.50p 3.06%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,686.00p 1.63%
International Consolidated Airlines Group SA (CDI) (IAG) 200.00p 1.00%
Smiths Group (SMIN) 1,595.50p 0.73%
Scottish Mortgage Inv Trust (SMT) 1,223.00p 0.37%
InterContinental Hotels Group (IHG) 5,170.00p 0.08%
Royal Mail (RMG) 606.80p 0.07%
Standard Chartered (STAN) 503.40p 0.04%
Intertek Group (ITRK) 5,306.00p 0.04%
Whitbread (WTB) 3,341.00p 0.03%

FTSE 100 - Fallers

Kingfisher (KGF) 337.80p -1.34%
Rightmove (RMV) 613.00p -1.19%
Ocado Group (OCDO) 1,897.50p -0.94%
Avast (AVST) 470.90p -0.90%
Experian (EXPN) 2,681.00p -0.89%
Phoenix Group Holdings (PHNX) 726.80p -0.85%
BT Group (BT.A) 184.25p -0.81%
London Stock Exchange Group (LSEG) 7,488.00p -0.77%
Fresnillo (FRES) 859.60p -0.72%
BAE Systems (BA.) 531.60p -0.71%

FTSE 250 - Risers

Ninety One (N91) 249.00p 4.71%
Tullow Oil (TLW) 59.84p 2.68%
Vivo Energy (VVO) 105.40p 2.13%
XP Power Ltd. (DI) (XPP) 5,300.00p 1.92%
Aberforth Smaller Companies Trust (ASL) 1,606.00p 1.77%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,686.00p 1.63%
BlackRock World Mining Trust (BRWM) 650.00p 1.25%
Fidelity China Special Situations (FCSS) 419.50p 1.21%
IP Group (IPO) 120.80p 1.00%
Templeton Emerging Markets Inv Trust (TEM) 1,036.00p 0.78%

FTSE 250 - Fallers

SSP Group (SSPG) 294.60p -4.38%
Close Brothers Group (CBG) 1,600.00p -2.44%
Grainger (GRI) 286.20p -2.39%
Morgan Advanced Materials (MGAM) 349.50p -2.37%
Ascential (ASCL) 376.20p -1.98%
Trainline (TRN) 262.60p -1.57%
Hochschild Mining (HOC) 178.70p -1.43%
Aston Martin Lagonda Global Holdings (AML) 2,132.00p -1.39%
Playtech (PTEC) 461.20p -1.37%
Telecom Plus (TEP) 1,218.00p -1.30%