London midday: Stocks dip as investors eye UK inflation, BoE

17th Jun 2024 10:45

(Sharecast News) - London stocks had dipped into the red by midday on Monday as worries about French political uncertainty crept in again, and as investors eyed a key UK inflation reading and the latest policy announcement from the Bank of England later in the week.

The FTSE 100 was down 0.1% at 8,136.61.

Joshua Mahony, chief market analyst at Scope Markets, said: "Early gains are fading in Europe, with French political uncertainty adding to a somewhat shaky environment for stocks globally. President Macron's decision to call parliamentary election represents a roll of the dice amid a groundswell of support for the far-right National Rally party, but markets are increasingly having to weigh up the potential consequences should it backfire.

"With the CAC having lost 6% over the course of last week alone, traders will remain split between those spotting an opportunity to buy the dip, and those aware of the risk posed to French stocks should support for Macron wane further. With the initial pop already starting to fade, it is worthwhile noting that any gains seen in French stocks will likely remain under the microscope for as long as this political uncertainty remains."

Looking ahead to the rest of the week, all eyes will be on the latest UK consumer price inflation data due on Wednesday and a policy decision from the Bank of England on Thursday.

"With inflation expected to fall back below the 2% target ahead of the Bank of England meeting, many will question whether this could pave the way for a surprise rate cut at Threadneedle Street," Mahony said. "Nonetheless with core inflation expected to remain elevated and huge political uncertainty remaining ahead of the UK election, it looks more likely that Bailey will hold off for the time being."

Investors were also mulling the latest data from China's National Bureau of Statistics, which showed that retail sales smashed forecasts in May, though industrial production growth slowed much more than expected.

On home shores, meanwhile, figures from Nationwide showed house prices were largely unchanged in June following a bumper performance in May.

According to Nationwide's house price index, house prices were flat in June, dipping just £21 from May's high to £375,110. Prices sparked 0.8% in May.

Year-on-year, prices rose 0.6% in June, unchanged on May's 0.6% annual increase.

The number of sales agreed was 6% higher year-on-year, while demand remained stable, up 5%.

May is traditionally a strong period for housing prices, with June weaker in comparison.

In a recent Rightmove poll of 14,000 people, a comfortable majority said the general election on 4 July would not affect plans to move house.

But in the two weeks since Rishi Sunak's surprise announcement, the number of top-end sellers coming to market was 3% lower than a year ago, Rightmove noted, versus being up 11% in the previous fortnight.

Tim Bannister, director of property science at Rightmove, said: "It's always difficult to predict how home-movers will react to sudden uncertainty, but...[in] previously election campaigns, market activity has remained largely steady.

"This election has followed a similar pattern so far.

"However, some potential sellers appear to be watching and waiting rather than taking action, evidence by the dip in the number of new sellers coming to market, particularly at the top end."

In corporate news, publishing, events and B2B consultancy group Ascential gained as it said trading was in line with expectations for the full year, helped by strong growth in marketing and fintech operations.

Hikma Pharmaceuticals nudged up after it agreed to buy parts of Xellia Pharmaceuticals, a Copenhagen-based specialty company focusing on providing anti-infective treatments and other critical care therapies, for up to $185m.

Hikma will buy parts of Xellia's US finished dosage form (FDF) business and assets, including a commercial portfolio and pipeline of differentiated products, a manufacturing facility in Cleveland, Ohio, sales and marketing capabilities, and an R&D centre in Zagreb, Croatia.

SSP was weaker after a downgrade to 'sell' from 'neutral' at Goldman Sachs, which slashed the price target to 160p from 255p.

Aston Martin slumped after Jefferies cut the price target to 250p from 275p.

Market Movers

FTSE 100 (UKX) 8,136.61 -0.13%

FTSE 250 (MCX) 20,115.59 -0.02%

techMARK (TASX) 4,774.21 -0.03%

FTSE 100 - Risers

St James's Place (STJ) 530.50p 2.02%

Flutter Entertainment (DI) (FLTR) 14,040.00p 1.48%

Entain (ENT) 665.40p 1.43%

Legal & General Group (LGEN) 227.90p 1.42%

Admiral Group (ADM) 2,582.00p 1.22%

B&M European Value Retail S.A. (DI) (BME) 468.10p 1.10%

Vodafone Group (VOD) 69.70p 1.07%

CRH (CDI) (CRH) 6,092.00p 1.03%

Intermediate Capital Group (ICG) 2,214.00p 1.00%

HSBC Holdings (HSBA) 683.50p 0.99%

FTSE 100 - Fallers

Convatec Group (CTEC) 248.80p -1.97%

Rio Tinto (RIO) 5,133.00p -1.65%

Severn Trent (SVT) 2,434.00p -1.62%

Glencore (GLEN) 447.85p -1.47%

Melrose Industries (MRO) 593.20p -1.23%

SSE (SSE) 1,747.50p -1.10%

Tesco (TSCO) 306.80p -1.10%

Anglo American (AAL) 2,366.00p -0.94%

Standard Chartered (STAN) 717.80p -0.88%

GSK (GSK) 1,590.50p -0.87%

FTSE 250 - Risers

W.A.G Payment Solutions (WPS) 66.60p 2.46%

Crest Nicholson Holdings (CRST) 246.80p 1.98%

TUI AG Reg Shs (DI) (TUI) 583.50p 1.74%

Me Group International (MEGP) 169.40p 1.68%

Ascential (ASCL) 336.00p 1.66%

Hargreaves Lansdown (HL.) 1,067.50p 1.57%

BH Macro Ltd. GBP Shares (BHMG) 350.50p 1.45%

Endeavour Mining (EDV) 1,633.00p 1.43%

TI Fluid Systems (TIFS) 129.80p 1.41%

SThree (STEM) 417.00p 1.34%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 139.60p -4.71%

SSP Group (SSPG) 163.90p -2.79%

Watches of Switzerland Group (WOSG) 380.80p -2.16%

Harbour Energy (HBR) 291.60p -2.02%

Trustpilot Group (TRST) 207.00p -1.90%

Serco Group (SRP) 167.40p -1.76%

Patria Private Equity Trust (PPET) 542.00p -1.45%

Octopus Renewables Infrastructure Trust (ORIT) 71.20p -1.39%

Wizz Air Holdings (WIZZ) 2,380.00p -1.24%

The Renewables Infrastructure Group Limited (TRIG) 96.60p -1.23%