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London open: Stocks fall as investors mull inflation data
London stocks edged lower in early trade on Wednesday after data showed that UK inflation fell less than expected last month as record food prices continued to mount.
At 0850 BST, the FTSE 100 was down 0.3% at 7,889.37.
Figures released earlier by the Office for National Statistics showed that consumer price inflation was 10.1% in the year to March, down from February’s surprise 10.4%. Economists were expecting a fall to 9.8%.
On a monthly basis, CPI rose by 0.8%, compared to a rise of 1.1% in March.
The largest downward contributions came from motor fuels and heating oil prices, but soaring food prices weighed heavily. Food inflation hit a fresh 45-year high of 19.2% in March, from February’s 18.2%.
Once more volatile energy, food, alcohol and tobacco prices were stripped out, core CPI including owner occupiers’ housing costs (CPIH) rose by 5.7% in the 12 months to March, unchanged on February. Core CPI was 6.2%, above forecasts for 6.0%.
Capital Economics said: “Plunging energy price inflation will soon drag down CPI inflation more significantly, but the stubbornness of core inflation suggests that the fight against inflation is lasting longer than the Bank of England expected.
“This supports our long-held view that the Bank will raise interest rates to 4.50% (from 4.25% now) in May. It’s possible that rates may have to rise higher.”
In equity markets, Redde Northgate surged after the commercial vehicle rental provider said full-year adjusted pre-tax profit was likely to be ahead of market consensus and around the top end of the consensus range following a continued strong performance across the business.
Hunting was also trading up after saying it had seen a strong start to the year, with first-quarter earnings coming in ahead of expectations.
National Express gained after the transport operator reported a rise in first-quarter revenues driven by an improvement in UK buses and German rail.
Kainos fell even as it said results for the year ended 31 March were set to be in line with current consensus forecasts.
Liontrust was in the red despite saying that annual profits were on course to come in ahead of expectations.
Just Eat Takeaway slumped as it lifted its guidance for full-year core profit but posted a decline in first-quarter orders.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Imperial Brands Plc | +1.62% | +31.00 | 1,949.50 |
| 2 |  |
British American Tobacco Plc | +1.29% | +36.50 | 2,871.50 |
| 3 |  |
Coca-cola Hbc Ag | +1.11% | +26.00 | 2,371.00 |
| 4 |  |
Admiral Group Plc | +1.03% | +23.00 | 2,257.00 |
| 5 |  |
Direct Line Insurance Group Plc | +0.89% | +1.45 | 165.25 |
| 6 |  |
Aviva Plc | +0.86% | +3.60 | 422.60 |
| 7 |  |
Centrica Plc | +0.75% | +0.85 | 113.95 |
| 8 |  |
Diageo Plc | +0.55% | +20.00 | 3,667.00 |
| 9 |  |
National Grid Plc | +0.45% | +5.00 | 1,121.50 |
| 10 |  |
Tesco Plc | +0.44% | +1.20 | 274.60 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Fresnillo Plc | -4.07% | -32.60 | 768.40 |
| 2 |  |
Tui Ag | -3.13% | -17.60 | 545.20 |
| 3 |  |
Antofagasta Plc | -2.93% | -48.00 | 1,589.00 |
| 4 |  |
Ocado Group Plc | -2.90% | -15.40 | 516.00 |
| 5 |  |
Anglo American Plc | -2.29% | -64.00 | 2,736.00 |
| 6 |  |
British Land Company Plc | -2.02% | -7.90 | 383.60 |
| 7 |  |
Kingfisher Plc | -1.75% | -4.60 | 258.00 |
| 8 |  |
Land Securities Group Plc | -1.73% | -11.20 | 634.80 |
| 9 |  |
Rightmove Plc | -1.73% | -10.00 | 567.60 |
| 10 |  |
Bp Plc | -1.62% | -8.80 | 535.70 |
US close: Stocks flat as earnings take centre stage
Wall Street stocks were little changed at the end of trading on Tuesday following a handful of quarterly earnings reports.
At the close, the Dow Jones Industrial Average was down 0.03% at 33,976.63, while the S&P 500 advanced 0.09% to 4,154.87 and the Nasdaq Composite saw out the session 0.04% softer at 12,153.41.
The Dow closed 10.55 points lower on Wednesday, doing little to impact gains recorded in the previous session.
Earnings were in focus on Tuesday, with banking giant Bank of America beating on both the top and bottom lines with its Q1 earnings amid rising interest rates, while Johnson & Johnson topped expectations with its results, leading the drug and consumer products manufacturer to hike its full-year guidance.
Goldman Sachs delivered weaker-than-expected Q1 revenues, as well as a $470.0m impact from its Marcus loans, while streaming behemoth Netflix posted mixed results after the close, with both subscriber growth and a weaker-than-expected outlook.
On the macro front, US homebuilding activity slowed last month, although the underlying details of the latest data set from the Department of Commerce was better. In seasonally adjusted terms, housing starts dropped at a month-on-month pace of 0.8% in March to reach an annual rate of 1.42m – ahead of consensus estimates for a print of 1.40m. Starts for the month before, on the other hand, were revised down from 1.45m to 1.43m.
Elsewhere, a top US central bank official said that the Fed funds rate should rise to 5.5-5.75%. Speaking to Reuters, St Louis Federal Reserve head James Bullard stated recession talk was based on models that put too much weight on the idea that interest rates went up quickly. Bullard also highlighted how the St Louis Fed’s financial stress index had spiked after the 10 March collapse of Silicon Valley Bank, but later quickly fell back to a normal reading, and cautioned against tying the central bank’s hands behind its back once that level of rates was reached.
Federal Reserve governor Michelle Bowman expressed concern over the possible introduction of a digital US dollar, noting that multiple risks posed by such a system. Bowman said a central bank digital currency could intrude on the privacy of users and harm the banking system while providing only limited benefits.
Wednesday newspaper round-up: Telecoms, Greggs, Tony Danker
A trio of telecoms firms have been accused of overcharging hundreds of thousands of landline-only customers by almost £200m, according to research. Economists at Fideres argue that almost 600,000 UK landline-only customers have been charged “excessive” prices since 2009. – Guardian
The bakery chain Greggs is to appeal against a ban preventing a central London outlet from selling hot food through the night after police claimed it could lead to a spike in crime and disorder. The company was last summer refused an overnight licence to open its store in Leicester Square between between 11pm and 5am amid claims it could become a “hotspot for late-night disturbances and antisocial behaviour”. – Guardian
The former head of the CBI has said he has been made the “fall guy” for a wider crisis within Britain’s biggest business lobbying group, amid allegations of drug use and rape. Tony Danker said his reputation has been “totally destroyed” by the misconduct claims, which were unrelated to his dismissal but came to light around the same time. – Telegraph
The leading shareholder in HSBC has accused the bank’s bosses of being “closed-minded” about a break-up as Ping An detailed for the first time its plan to spin off the lender’s Asian division. The Chinese insurer, which owns an 8 per cent stake, claimed that the FTSE 100 bank had “refused to verbally engage in discussions” on its proposals and had “exaggerated many of the costs and risks”. It had been “extremely disappointed” by the “consistent closed-minded attitude” displayed by executives at the British group. – The Times
Lawyers for Jes Staley have been given the chance to question the former Barclays chief executive’s ex-boss at JP Morgan over allegations surrounding the crimes of Jeffrey Epstein. Jamie Dimon, JP Morgan’s veteran chairman and chief executive, has been ordered by a federal judge to set aside two days for questioning under oath as America’s largest bank grapples with legal action over its former ties with Epstein, the paedophile. – The Times
