London close: Stocks mixed as US inflation meets forecasts

13th Nov 2024 15:00

(Sharecast News) - London stocks ended with mixed results on Wednesday, as investors assessed the latest US inflation data for October, which aligned with forecasts.

The FTSE 100 index posted a modest gain of 0.06%, closing at 8,030.33 points, while the FTSE 250 edged down 0.34% to end at 20,359.21 points.

In currency markets, sterling was last down 0.3% on the dollar to trade at $1.2710, while it gained 0.24% against the euro, changing hands at €1.2029.

"The rise in yields continues to pressure European stocks, but the FTSE 100's losses pale in comparison to continental Europe," said IG chief market analyst Chris Beauchamp.

"Here, the yield trade combines with political worries about the German election, plus deep concern that incoming president Trump will impose tariffs on European companies.

"The CAC 40 is heading back to the lows of August but the Dax is losing ground rapidly too."

Beauchamp said the US CPI reading supported the dollar, giving it fresh impetus to move higher, while a drop to parity for the euro against the dollar was being discussed once more.

"Trump's election has only increased the appeal of all things US, and while stocks have taken something of a breather this week, there seems no stopping the dollar."

US consumer prices rise as expected, UK grocery sales growth slows

In economic news, the US consumer price index (CPI) rose modestly to 315.66 points in October from September's 315.30, marking a 0.2% monthly increase and bringing the annual inflation rate to 2.6%, up from 2.4% in September, according to the Bureau of Labor Statistics.

That rise was in line with forecasts, maintaining the previous three months' growth pace.

Core inflation, excluding food and energy costs, recorded a 3.3% increase year-on-year and rose by 0.3% for the month, highlighting ongoing inflationary pressures outside of volatile sectors.

"Inflation appears to be remaining stable following the elevated levels seen earlier in the year, with October's year-on-year CPI coming in at the forecasted 2.6%," said Srijan Katyal at ADSS.

"This reading has slightly disrupted the disinflationary pattern we have seen in the last few months, but continues to remain stable around the targeted level.

"This pattern - along with unexpectedly weak jobs market data reported earlier in the month - will likely reassure the Federal Reserve that their recent 25 basis point reduction in the interest rate was the correct course of action."

US mortgage applications meanwhile saw a slight uptick of 0.5% in the week ending 8 November, as benchmark interest rates climbed 72 basis points since the start of the quarter, according to the Mortgage Bankers Association.

That small gain followed a sharp 35% drop in October's mortgage demand.

While purchase applications rose 2% from the prior week, refinancing applications declined 2%, reflecting the continuing strain of higher borrowing costs on housing demand.

On home shores, UK grocery sales grew 4.0% year-on-year in October, a slower pace than the prior month's 4.7%, as consumers tightened budgets ahead of holiday spending, NIQ reported.

Shoppers spent an average of £18.67 per visit, 6% less than in the prior month, though promotional item sales rose slightly to 25% of total sales.

Online grocery sales edged up to 12.9% of total sales, reflecting increased digital engagement.

Festive spending was already notable, with sales of confectionery up by 10.5%, yet spending on essentials was subdued, with packaged grocery sales rising only 1.7% and alcohol sales slipping by 0.4%, indicating restrained consumer behaviour ahead of the holiday season.

"Shoppers so far have been cautious and it's evident that they are saving on grocery essentials to be able to afford treats and indulgences and we have a polarised consumer with 50% of households continuing to feel pressure on personal finances," said Mike Watkins, UK head of retailer and business insight at NIQ.

Smiths Group jumps on raised outlook, Close Brothers in the red

On London's equity markets, Smiths Group surged 10.45% after it raised its growth and margin outlook and expanded its share buyback programme, citing an "outstanding" first quarter.

Flutter Entertainment followed with a 6.75% rise after it lifted its full-year revenue and EBITDA guidance, benefiting from improved forecasts in the betting sector.

Weapons manufacturer Babcock International also climbed, up 3.37%, after it reported a strong increase in half-year profits amid rising government demand for military equipment due to global tensions.

Just Eat Takeaway soared 14.77% following its agreement to sell its US subsidiary Grubhub to Wonder Group for $650m, streamlining its business in a key strategic shift.

On the downside, SSE saw a slight dip of 0.68% despite posting a rise in half-year earnings and announcing the upcoming departure of its long-standing chief executive.

Intermediate Capital Group fell 6.07% after reporting a 21% decline in first-half pre-tax profits to £162.7m, while credit-checking firm Experian slipped 2.51%, as investors reacted cautiously to its first-half results despite a full-year margin outlook lift.

Close Brothers Group dropped 5.61% after the Court of Appeal ruled against it in a case regarding undisclosed loan commissions.

The court mandated that Close Brothers and FirstRand Bank repay hidden fees to affected borrowers, though both lenders planned to appeal to the Supreme Court.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,030.33 0.06%

FTSE 250 (MCX) 20,359.21 -0.34%

techMARK (TASX) 4,616.73 0.46%

FTSE 100 - Risers

Smiths Group (SMIN) 1,681.00p 10.45%

Flutter Entertainment (DI) (FLTR) 20,560.00p 6.69%

Vodafone Group (VOD) 69.06p 3.04%

Standard Chartered (STAN) 945.00p 2.34%

Fresnillo (FRES) 633.50p 1.69%

Diploma (DPLM) 4,594.00p 1.68%

Scottish Mortgage Inv Trust (SMT) 941.00p 1.60%

AstraZeneca (AZN) 10,144.00p 1.54%

Admiral Group (ADM) 2,510.00p 1.54%

Ashtead Group (AHT) 6,268.00p 1.39%

FTSE 100 - Fallers

Intermediate Capital Group (ICG) 2,078.00p -7.23%

DCC (CDI) (DCC) 5,455.00p -3.79%

Convatec Group (CTEC) 256.40p -3.03%

SEGRO (SGRO) 758.20p -2.83%

BAE Systems (BA.) 1,344.50p -2.68%

Experian (EXPN) 3,765.00p -2.51%

Land Securities Group (LAND) 571.00p -2.48%

Spirax Group (SPX) 6,370.00p -2.45%

Rightmove (RMV) 593.00p -2.40%

Barratt Redrow (BTRW) 402.90p -2.21%

FTSE 250 - Risers

Baillie Gifford US Growth Trust (USA) 259.50p 6.13%

Chrysalis Investments Limited NPV (CHRY) 93.90p 4.69%

Watches of Switzerland Group (WOSG) 438.00p 3.20%

Baltic Classifieds Group (BCG) 330.00p 3.12%

4Imprint Group (FOUR) 5,150.00p 3.10%

Babcock International Group (BAB) 514.00p 2.96%

TI Fluid Systems (TIFS) 169.40p 2.67%

Oxford Instruments (OXIG) 2,085.00p 2.46%

SSP Group (SSPG) 156.70p 2.42%

Volution Group (FAN) 569.00p 2.34%

FTSE 250 - Fallers

Close Brothers Group (CBG) 185.00p -5.61%

Spectris (SXS) 2,494.00p -3.95%

Essentra (ESNT) 149.60p -3.61%

Derwent London (DLN) 2,068.00p -3.54%

Bloomsbury Publishing (BMY) 672.00p -3.45%

TBC Bank Group (TBCG) 3,085.00p -3.15%

Target Healthcare Reit Ltd (THRL) 84.50p -2.98%

3i Infrastructure (3IN) 328.50p -2.95%

PZ Cussons (PZC) 77.40p -2.76%

Hammerson (HMSO) 274.80p -2.62%