London close: Stocks rise as investors digest inflation data

14th Aug 2024 15:02

(Sharecast News) - London stocks ended Wednesday's session in positive territory, as investors reviewed the latest inflation figures from the UK and the US.

The FTSE 100 index rose by 0.56% to close at 8,281.05 points, while the FTSE 250 increased 1% to 20,952.29 points.

In currency markets, sterling was last down 0.14% on the dollar to trade at $1.2844, while it decreased 0.4% against the euro, changing hands at €1.1653.

"The key event of the week is out of the way, but after their leap higher over the past week stocks look a little exhausted," said IG chief market analyst Chris Beauchamp.

"US inflation still seems to be moving in the right direction, and investors seem happy to shrug off the monthly rise given that the annual figure declined.

"But there is a sense of 'where do we go from here' now."

Beauchamp said that, having recouped much of their recent losses quickly, equities were now bereft of a catalyst in the short-term.

"A similar situation prevails in oil prices - having rallied hard over the last week they now look becalmed.

"A cyber attack on Iran this afternoon seems oddly-well timed as we await developments in the region, though the commentary from officials seems to suggest that Tehran is chary about provoking a full-scale war in the region."

Consumer inflation rises less than expected in the UK, meets US forecasts

In economic news, consumer price inflation in the UK rose to 2.2% in July, marking its first increase since December.

The rise, reported by the Office for National Statistics, was slightly below the anticipated 2.3% but pushed inflation above the Bank of England's 2% target.

The main contributors to the increase were housing and household services, where gas and electricity prices did not drop as significantly as last year.

Conversely, the cost of restaurants and hotels declined as hotel prices fell.

Core CPI, excluding food, energy, alcohol, and tobacco, decreased to 3.3% from 3.5% in June, while the annual CPI services rate dropped to 5.2% from 5.7%.

"Inflation ticked up a little in July as although domestic energy costs fell, they fell by less than a year ago," said Grant Fitzner, chief economist at the ONS.

"This was partially offset by hotel costs, which fell in July after strong growth in June."

In housing news, UK house prices saw a 2.7% rise in June, consistent with the revised figure from May.

The average house price reached £288,000, up £8,000 from the previous year.

Regional price changes were notable, with England seeing a 2.4% increase to £305,000, Wales up 1.8% to £216,000, Scotland rising 4.3% to £192,000, and Northern Ireland climbing 6.4% to £185,000.

Additionally, private rents grew by 8.6% over the past year, with increases of 10% in Northern Ireland, 8.6% in England, 7.5% in Scotland, and 5.6% in Wales.

On the continent, eurozone economic growth was reported at 0.3% for the second quarter, matching the broader European Union's growth rate.

However, industrial production in the euro area fell by 0.1% month-on-month, with no change in the EU.

Across the Atlantic, US inflation slowed to its lowest rate in over three years, with the consumer price index rising 0.2% in July both monthly and annually, bringing the year-on-year rate down to 2.9%.#

Core CPI also decreased to 3.2%.

The monthly changes saw energy prices remain stable, while food costs increased slightly.

Shelter and transportation service prices both rose by 0.4%, with medical care commodities up 0.2%.

Elsewhere, US mortgage applications surged 16.8% for the week ended 9n August, marking the highest increase since January 2023.

Refinancing applications jumped 35%, while purchase applications increased by 3%.

The surge followed a decrease in borrowing costs, with benchmark mortgage rates falling nearly 30 basis points due to softer expectations for Federal Reserve policy.

Gambling sector in the green, Balfour Beatty falls

On London's equity markets, Flutter Entertainment shares surged 10.54% following an announcement that the company was raising its full-year guidance after a stronger-than-expected second-quarter performance.

Flutter now forecast US revenue between $6.05bn and $6.35bn, up from previous estimates, with adjusted EBITDA expected between $680m and $800m.

International revenue was projected to range from $7.85bn to $8.15bn, with adjusted EBITDA between $1.69bn and $1.85bn.

Playtech saw a significant increase of 13.75% as the company confirmed it was in discussions with Flutter regarding a potential sale of its Italian business, Snaitech.

The move came in response to reports suggesting the deal could be worth around £2bn.

Entain, the owner of Ladbrokes, rose by 4.76%, continuing the positive trend in the gaming sector.

Housebuilders also saw gains with Persimmon up 3.22%, Barratt Developments rising 2.68%, Berkeley Group increasing by 3.79%, Vistry Group gaining 2.58%, and Redrow climbing 2.62%, all benefiting from expectations of an interest rate cut.

Crest Nicholson Holdings advanced by 3.26% after its shares rebounded from a previous decline, fueled by Bellway's announcement that it would not pursue an acquisition of Crest Nicholson.

Jupiter Fund Management gained 6.53% following an upgrade to 'neutral' from 'sell' by UBS, while Aviva saw a modest rise of 0.65% after reporting a 14% increase in interim operating profits.

On the downside, Balfour Beatty shares fell by 2.49% despite the company's announcement of a 9% dividend increase and positive earnings outlook, following a rise in half-year profit.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,281.05 0.56%

FTSE 250 (MCX) 20,952.29 1.00%

techMARK (TASX) 4,895.85 1.22%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 16,200.00p 10.54%

Hikma Pharmaceuticals (HIK) 2,060.00p 4.98%

Entain (ENT) 610.80p 4.54%

Berkeley Group Holdings (The) (BKG) 5,330.00p 3.90%

Barratt Developments (BDEV) 549.20p 3.82%

Taylor Wimpey (TW.) 164.25p 3.63%

Persimmon (PSN) 1,664.50p 3.39%

BT Group (BT.A) 145.50p 2.75%

Smurfit Westrock (DI) (SWR) 3,167.00p 2.66%

Smith (DS) (SMDS) 456.80p 2.65%

FTSE 100 - Fallers

Rio Tinto (RIO) 4,853.00p -1.54%

Anglo American (AAL) 2,198.00p -1.50%

Spirax Group (SPX) 7,565.00p -1.11%

Beazley (BEZ) 728.00p -0.82%

Croda International (CRDA) 3,820.00p -0.55%

Glencore (GLEN) 403.20p -0.54%

Convatec Group (CTEC) 231.80p -0.43%

Frasers Group (FRAS) 837.00p -0.30%

Fresnillo (FRES) 541.50p -0.28%

Haleon (HLN) 373.80p -0.24%

FTSE 250 - Risers

Playtech (PTEC) 612.00p 13.75%

TBC Bank Group (TBCG) 2,990.00p 7.55%

Jupiter Fund Management (JUP) 83.20p 6.53%

Genuit Group (GEN) 460.50p 5.75%

Alpha Group International (ALPH) 2,510.00p 5.02%

Hilton Food Group (HFG) 950.00p 4.86%

Marshalls (MSLH) 337.00p 4.50%

Bloomsbury Publishing (BMY) 714.00p 4.08%

Currys (CURY) 80.55p 3.87%

Rathbones Group (RAT) 1,870.00p 3.87%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 1,312.00p -3.74%

Auction Technology Group (ATG) 420.00p -2.78%

Trainline (TRN) 309.60p -2.69%

Balfour Beatty (BBY) 399.40p -2.49%

BH Macro Ltd. GBP Shares (BHMG) 389.00p -2.02%

Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 280.00p -1.93%

Genus (GNS) 1,730.00p -1.14%

Johnson Matthey (JMAT) 1,572.00p -1.07%

NCC Group (NCC) 153.20p -1.03%

Renishaw (RSW) 3,535.00p -0.98%ma