London midday: Stocks gain ahead of US inflation data
London stocks were in the black by midday on Wednesday, lifted by well-received results from the likes of ITV and Marks & Spencer, as investors eyed the latest US inflation reading.
The FTSE 100 was up 0.5% at 7,306.86.
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 15bps 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.
Food and clothing retailer Marks & Spencer surged after it said annual profits would be ahead of expectations as interim earnings rose above pre-pandemic levels.
On the downside, pub chain Wetherspoons lost ground after it reported a drop in sales versus pre-pandemic trading, as its older, more cautious customers made fewer visits to its pubs.
Aveva fell as the software group reported a widening of its first-half losses.
Indivior was under the cosh after US alternative asset management firm Scopia Capital sold 20m share in the opioid addiction treatment maker in a placing.
Babcock was knocked lower by a downgrade to ‘equalweight’ at Barclays.
Market Movers
FTSE 100 (UKX) 7,306.86 0.45%
FTSE 250 (MCX) 23,410.58 0.19%
techMARK (TASX) 4,622.33 -0.05%
FTSE 100 - Risers
ITV (ITV) 123.35p 12.85%
SSE (SSE) 1,655.00p 2.48%
National Grid (NG.) 964.40p 2.31%
DCC (CDI) (DCC) 6,174.00p 2.18%
BP (BP.) 351.70p 2.10%
Aviva (AV.) 402.90p 1.95%
Severn Trent (SVT) 2,778.00p 1.94%
United Utilities Group (UU.) 1,067.00p 1.86%
Associated British Foods (ABF) 2,043.00p 1.79%
Barclays (BARC) 193.32p 1.75%
FTSE 100 - Fallers
Aveva Group (AVV) 3,378.00p -3.76%
Darktrace (DARK) 596.00p -2.30%
Burberry Group (BRBY) 1,947.50p -1.99%
Evraz (EVR) 602.60p -1.41%
Fresnillo (FRES) 914.40p -1.30%
Spirax-Sarco Engineering (SPX) 16,140.00p -1.28%
Scottish Mortgage Inv Trust (SMT) 1,496.50p -1.22%
InterContinental Hotels Group (IHG) 5,160.00p -1.15%
Rightmove (RMV) 692.00p -1.14%
Glencore (GLEN) 351.50p -1.11%
FTSE 250 - Risers
Marks & Spencer Group (MKS) 216.40p 11.29%
Baltic Classifieds Group (BCG) 210.00p 5.00%
Airtel Africa (AAF) 129.10p 3.12%
Reach (RCH) 337.00p 3.06%
TP Icap Group (TCAP) 140.00p 2.77%
Travis Perkins (TPK) 1,562.00p 2.73%
Wood Group (John) (WG.) 203.00p 2.60%
Tate & Lyle (TATE) 683.80p 2.40%
Energean (ENOG) 933.50p 2.36%
Hiscox Limited (DI) (HSX) 811.40p 2.35%
FTSE 250 - Fallers
Wetherspoon (J.D.) (JDW) 964.50p -6.27%
Indivior (INDV) 245.60p -5.76%
Watches of Switzerland Group (WOSG) 1,250.00p -4.14%
888 Holdings (888) 359.60p -3.75%
Trustpilot Group (TRST) 302.80p -3.26%
Oxford Biomedica (OXB) 1,476.00p -2.64%
Bytes Technology Group (BYIT) 549.50p -2.48%
Biffa (BIFF) 389.00p -2.38%
Discoverie Group (DSCV) 974.00p -2.31%
Babcock International Group (BAB) 316.00p -2.11%