London midday: Markets stall as risk appetite fades ahead of US data

13th May 2024 11:49

(Sharecast News) - UK stocks were more or less flat on Monday, with markets pausing following six consecutive days of gains that took the FTSE 100 to a new record high, as risk appetite started to fade ahead of some important US inflation figures later in the week.

By around midday in London, the FTSE 100 was up just 0.07% at 8,440, swinging between gains and losses for most of the morning session after setting a fresh closing high of 8433.76 on Friday.

Dovish central bank expectations drove the FTSE 100 and European indices - including the Dax, Cac and Stoxx 600 - to record highs last week. However, cautious comments from Federal Reserve members about the near-term path for inflation have shown diverging approaches from central banks on either side of the Atlantic, with US policymakers keen to keep interest rates higher for longer.

US inflation figures released on Wednesday may give markets an indication about how the Fed will act in the coming months. Consensus forecasts point to a slowdown in price growth in April, with the core annual rate expected to ease to 3.6% from 3.8%.

"On a day that is largely devoid of major news, traders will be looking closely at the potential scenarios on Wednesday. Given the recent resurgence in US inflation, we could potentially see fresh risk-off sentiment emerge should monthly inflation come in above 0.2% yet again," said Joshua Mahony, chief market analyst at Scope Markets.

Meanwhile, the economic data calendar was relatively quiet elsewhere on Monday, with no major releases scheduled. However, fresh figures from China's National Bureau of Statistics over the weekend showed Chinese inflation picked up faster than expected in April. The consumer price index recorded a 0.3% rise year-on-year, surpassing the 0.2% forecast by economists polled by Reuters, and up from 0.1% in March.

Diploma and IAG lead the risers

Specialist distribution business Diploma saw shares jump nearly 6% after lifting its annual guidance following a 17% rise in first-half adjusted earnings, boosted by acquisitions. It now expects constant currency revenue growth of around 16%, up 5 percentage points from previous guidance, made up of 6% organic revenue growth and 10% from acquisitions.

Also higher was British Airways owner IAG following positive comments from JPMorgan, which said that earnings momentum should continue to take the shares higher. Despite the recent rally - the stock has gained more than 30% since 5 March - JPMorgan said price growth, cost execution and lower disruption should benefit results in the coming quarters.

Savings and retirement group Phoenix was out of favour, dropping 2% after the announcement that its chief financial officer of four years is to step down later this year. The company did not give a reason for his departure.

An automated iron ore train operated by mining giant Rio Tinto has derailed after colliding with a set of stationary wagons in north-western Australia on Monday, causing shares in the company to slip 1%.

Meanwhile, defence peers Babcock and BAE Systems were among the worst performers on the FTSE 350.

Market Movers

FTSE 100 (UKX) 8,440.02 0.07%

FTSE 250 (MCX) 20,610.64 -0.17%

techMARK (TASX) 4,740.36 -0.21%

FTSE 100 - Risers

Diploma (DPLM) 4,120.00p 5.59%

International Consolidated Airlines Group SA (CDI) (IAG) 185.60p 2.43%

Vodafone Group (VOD) 70.86p 2.10%

BT Group (BT.A) 107.25p 1.76%

3i Group (III) 2,885.00p 1.19%

Kingfisher (KGF) 264.50p 1.11%

British American Tobacco (BATS) 2,458.00p 1.03%

Unilever (ULVR) 4,331.00p 1.00%

Flutter Entertainment (DI) (FLTR) 16,405.00p 0.98%

Whitbread (WTB) 3,099.00p 0.98%

FTSE 100 - Fallers

BAE Systems (BA.) 1,354.00p -2.87%

Ocado Group (OCDO) 339.30p -2.58%

CRH (CDI) (CRH) 6,618.00p -2.39%

Phoenix Group Holdings (PHNX) 508.50p -2.31%

Persimmon (PSN) 1,407.00p -1.23%

Burberry Group (BRBY) 1,161.00p -1.19%

Admiral Group (ADM) 2,723.00p -0.98%

Spirax-Sarco Engineering (SPX) 9,260.00p -0.96%

Weir Group (WEIR) 2,092.00p -0.95%

Rolls-Royce Holdings (RR.) 419.90p -0.87%

FTSE 250 - Risers

Future (FUTR) 868.50p 4.64%

Wood Group (John) (WG.) 203.00p 3.68%

Helios Towers (HTWS) 112.80p 2.55%

Scottish American Inv Company (SAIN) 525.00p 2.34%

Octopus Renewables Infrastructure Trust (ORIT) 76.00p 2.01%

Bridgepoint Group (Reg S) (BPT) 235.60p 1.99%

Harbour Energy (HBR) 305.90p 1.97%

Apax Global Alpha Limited (APAX) 154.00p 1.58%

Trainline (TRN) 336.80p 1.51%

SDCL Energy Efficiency Income Trust (SEIT) 67.50p 1.50%

FTSE 250 - Fallers

Trustpilot Group (TRST) 210.00p -3.23%

Hochschild Mining (HOC) 157.60p -3.19%

Babcock International Group (BAB) 506.50p -2.88%

Kier Group (KIE) 140.40p -2.64%

Watches of Switzerland Group (WOSG) 327.00p -2.10%

Man Group (EMG) 252.40p -2.02%

Vistry Group (VTY) 1,270.00p -1.93%

Quilter (QLT) 111.60p -1.85%

Kainos Group (KNOS) 1,012.00p -1.75%

Indivior (INDV) 1,407.00p -1.75%