London midday: Stocks pare gains amid inflation worries; Trainline tumbles
London stocks had pared earlier gains by midday on Thursday as investors continue to worry about rising inflation, with Trainline under the cosh.
The FTSE 100 was up just 0.1% at 6,954.02., having slumped on Wednesday as worries about rising inflation and a crypto crash sent markets into the red.
Russ Mould, investment director at AJ Bell, said: "While the markets don’t want central banks to start raising interest rates too soon, they’re also clearly worried about rising prices running away and creating a situation where policymakers have no choice but to act.
"Overnight minutes from the US Federal Reserve suggesting some members favour a tapering of asset purchases may actually reassure investors that the Fed can keep the economy bubbling away without letting it overheat.
"While bitcoin’s slide was eventually averted after a very dramatic fall - its credentials as a means of protecting against rising prices look pretty tarnished, with gold shining in its stead.
"The risks associated with the pandemic haven’t gone away - while the developed world finally seems to be gaining some control over Covid-19 the situation is very different in emerging markets and this could be a threat to the commodity-focused firms on the FTSE, given a lot of demand comes from developing countries."
Investors were also digesting the latest survey from the Confederation of British Industry, which showed that factory output saw its first material growth in May in almost two years as the economy recovered but supply shortages and cost pressures pointed towards future price increases.
In equity markets, media group Future surged for the second day in a row after well-received results on Wednesday.
On the downside, BT was hit by a downgrade to ‘hold’ from ‘buy’ at Berenberg, while Tesco and GlaxoSmithKline were both weaker as they traded without entitlement to the dividend.
Trainline shares plunged by almost a third after the UK government unveiled plans to set up a rival ticketing app.
Under the new proposals, commuters will be able to buy tickets via a website run by a new state-owned body called Great British Railways. It will also provide passengers an easier way to access refunds for disrupted journeys.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the new state-owned body puts Trainline’s dominance in the e-ticket space in question.
"70% of all digital fares are currently sold by Trainline, and despite the pandemic disruption which saw it pushed into a £100 million operating loss, Trainline kept investing in new personalised and go-location technology to win market share amongst customers," she noted.
EasyJet flew lower after the budget airline posted a widening of its first-half losses, in line with expectations, as it continues to take a hit from Covid-related restrictions.
Royal Mail also lost ground as it said full-year pre-tax profits rose to £726m from £180m but reported a slowdown in April volumes.
Market Movers
FTSE 100 (UKX) 6,954.02 0.05%
FTSE 250 (MCX) 22,244.81 0.05%
techMARK (TASX) 4,248.37 0.22%
FTSE 100 - Risers
Experian (EXPN) 2,679.00p 3.84%
Auto Trader Group (AUTO) 567.20p 2.20%
Associated British Foods (ABF) 2,311.00p 2.12%
Spirax-Sarco Engineering (SPX) 12,170.00p 1.93%
Rightmove (RMV) 589.80p 1.90%
Croda International (CRDA) 6,744.00p 1.87%
DCC (CDI) (DCC) 6,144.00p 1.55%
AstraZeneca (AZN) 8,069.00p 1.45%
Intermediate Capital Group (ICP) 1,999.50p 1.42%
Smith & Nephew (SN.) 1,530.50p 1.26%
FTSE 100 - Fallers
Tesco (TSCO) 224.80p -3.02%
Fresnillo (FRES) 865.80p -2.76%
Rolls-Royce Holdings (RR.) 101.36p -1.93%
International Consolidated Airlines Group SA (CDI) (IAG) 191.52p -1.55%
Antofagasta (ANTO) 1,535.00p -1.51%
BT Group (BT.A) 169.60p -1.40%
BHP Group (BHP) 2,112.00p -1.22%
Sainsbury (J) (SBRY) 259.90p -1.10%
GlaxoSmithKline (GSK) 1,351.80p -1.10%
Next (NXT) 8,038.00p -1.03%
FTSE 250 - Risers
Future (FUTR) 2,892.00p 9.13%
Euromoney Institutional Investor (ERM) 1,004.00p 5.13%
Genuit Group (GEN) 594.00p 3.85%
Wickes Group (WIX) 261.50p 3.77%
Oxford Biomedica (OXB) 1,146.00p 3.43%
Liontrust Asset Management (LIO) 1,586.00p 3.39%
Provident Financial (PFG) 269.00p 2.59%
Moneysupermarket.com Group (MONY) 267.60p 2.22%
4Imprint Group (FOUR) 2,800.00p 2.19%
Plus500 Ltd (DI) (PLUS) 1,513.50p 2.16%
FTSE 250 - Fallers
Trainline (TRN) 330.00p -22.90%
Helios Towers (HTWS) 161.80p -4.49%
Tullow Oil (TLW) 50.64p -2.99%
easyJet (EZJ) 954.40p -2.91%
Apax Global Alpha Limited (APAX) 194.00p -2.90%
Ferrexpo (FXPO) 458.80p -2.76%
Morrison (Wm) Supermarkets (MRW) 178.60p -2.70%
Hochschild Mining (HOC) 189.40p -2.27%
Watches of Switzerland Group (WOSG) 754.00p -2.08%
Centrica (CNA) 52.02p -2.03%