London close: Stocks near-flat after more dire inflation data

(Sharecast News) - London stocks were mixed but little changed at the close on Wednesday, after fresh inflation data showed UK price growth reaching a 30-year high in March.
The FTSE 100 ended the session up 0.06% at 7,580.80, while the FTSE 250 was 0.12% weaker at 20,984.45.

Sterling was in the green, last trading up 0.55% on the dollar at $1.3072, and strengthening 0.1% against the euro to €1.2019.

"t's been another disappointing session for European markets today, sliding back after another strong inflation report - this time from the UK - as investors worry about the effect a continued acceleration in prices might have on consumer incomes, and ergo company profit margins," said CMC Markets chief market analyst Michael Hewson.

"After their big rebound yesterday crude oil prices have continued to push higher, reinforcing these concerns, ahead of tomorrow's With the European Central Bank rate meeting where the ECB appears to be caught like a rabbit in headlights as inflationary pressures push them ever closer to a rate rise by year end.

"The FTSE 100 is outperforming, helped largely by resilience in basic resources and energy."

On the economic front, UK inflation hit a fresh 30-year high in March according to figures released by the Office for National Statistics earlier, as energy and food prices surged.

Consumer price inflation reached 7% in March - its sharpest jump since 1992 - up from 6.2% in February and above analyst expectations of 6.7%.

The figures showed that motor fuel inflation increased to 30.7% from 22.3% in February, while food inflation rose to 5.9% from 5.1%.

However, the increase in inflation did not take into account the average 54% rise in energy bills that came into effect on 1 April, which would not figure in the data until next month.

Core CPI, which excludes food, energy, alcohol and tobacco, rose to 5.7% in March from 5.2% the month before and was above consensus expectations of 5.4%.

"Broad-based price rises saw annual inflation increase sharply again in March," said ONS chief economist Grant Fitzner.

"Amongst the largest increases were petrol costs, with prices mostly collected before the recent cut in fuel duty, and furniture.

"Restaurants and hotel prices also rose steeply in March while, after falling a year ago, there were rises across a number of different types of food."

Last month, the Office for Budget Responsibility said it expected consumer price inflation to peak at a 40-year high of 8.7% in the fourth quarter of 2022.

"It's no secret that inflation is going to rise even further in April, with the 54% leap in utility prices set to add a whopping 1.6 percentage points to inflation," said Ruth Gregory, senior UK economist at Capital Economics.

"We think the result will be a rise in CPI inflation to around 8.5% in April.

"And while we suspect April could mark the peak, we think inflation will remain above 7.0% for most of 2022 and above 3.0% for most of 2023."

Still on data, official data also showed UK house prices rose 10.9% in February year on year - also higher than estimates.

The ONS said the average price was £27,000 higher than a year earlier as it reached a record £277,000.

Prices rose 10.2% in January, while analysts had been looking for a February increase of 10.1%.

Across the pond, wholesale prices in the United States rose at their fastest clip in over a decade last month as energy prices continued to surge.

According to the US Department of Labor, so-called final demand prices jumped at a month-on-month pace of 1.4% in March, pushing the annual rate of increase to 11.2%.

The latter was the biggest jump since records began in 2010.

Energy prices jumped by 5.7%, led by a 20.4% jump in diesel fuel prices, following a 7.5% rise during the previous month and food prices increased by 2.4%.

Total goods prices meanwhile rose by 2.3%.

In equity markets on home shores, oil giants Shell and BP edged 0.76% and 0.35% higher, respectively, as oil prices inched up.

Brent crude futures were last up 2.56% on ICE, at $107.32 per barrel.

Oxford Instruments rallied 5.78% after saying it now expected full-year revenues and adjusted operating profit to be "marginally ahead" of internal expectations, despite supply chain disruption and cost inflation.

Anglo-Russian precious metals miner Polymetal International reversed earlier losses to close up 1.77%, even after shelving payment of its final dividend due to uncertainty over its financial position amid sanctions linked to the war in Ukraine.

British Land was in the black by 1.09% after JPMorgan said in a note that it was keeping the shares at 'overweight', while gold miner Hochschild jumped 6.28% as gold prices ticked higher.

On the downside, Tesco lost 2% after it reported a surge in annual profits thanks to higher sales and lower costs related to the Covid pandemic, but struck a cautious note on its outlook.

Ocado Group and J Sainsbury were also in the red, by 2.62% and 2.45%, respectively.

Hammerson was knocked 0.96% lower by a downgrade to 'underweight' at JPMorgan, while Dr. Martens fell 6.67% after Barclays slashed its price target on the stock.

Cybersecurity firm Darktrace reversed earlier gains to plunge 11.65%, despite increasing its annual revenue guidance after adding 359 net new customers in the third quarter.

Housebuilder Taylor Wimpey was on the back foot by 2.11%, with AJ Bell financial analyst Danni Hewson noting that the increasing cost of living meant anyone trying to save for a house deposit was likely finding it harder to put away as much each month.

"Rising inflation also strengthens the argument for interest rates to keep going up, and that will make mortgages more expensive and potentially cause a ripple effect in the property market if fewer people are able to buy a house or flat which might lead to lower prices," Hewson said.

"Also weighing on the housebuilding sector is an announcement from the government that more than £2bn has been committed by over 35 developers to make buildings safe.

"That's the right thing to do, but it means an outflow of cash that might otherwise have been used to buy more land, buy back shares or top up shareholder dividends."

Market Movers

FTSE 100 (UKX) 7,580.80 0.05%
FTSE 250 (MCX) 20,984.45 -0.12%
techMARK (TASX) 4,398.42 -0.15%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 140.30p 3.79%
Fresnillo (FRES) 822.80p 2.88%
Electrocomponents (ECM) 1,052.00p 2.73%
Coca-Cola HBC AG (CDI) (CCH) 1,599.50p 2.40%
Smiths Group (SMIN) 1,437.00p 2.13%
Reckitt Benckiser Group (RKT) 5,946.00p 2.09%
InterContinental Hotels Group (IHG) 4,986.00p 1.86%
Ferguson (FERG) 9,910.00p 1.43%
DCC (CDI) (DCC) 5,862.00p 1.31%
Smith (DS) (SMDS) 317.10p 1.31%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 973.80p -2.77%
Ocado Group (OCDO) 1,153.50p -2.62%
Abrdn (ABDN) 197.30p -2.62%
Sainsbury (J) (SBRY) 238.60p -2.45%
BT Group (BT.A) 189.00p -2.43%
Croda International (CRDA) 7,558.00p -2.20%
Persimmon (PSN) 2,136.00p -2.15%
Taylor Wimpey (TW.) 129.60p -2.11%
Tesco (TSCO) 265.20p -2.00%
Barratt Developments (BDEV) 502.60p -1.99%

FTSE 250 - Risers

Hochschild Mining (HOC) 147.20p 6.28%
Oxford Instruments (OXIG) 2,195.00p 5.78%
Baltic Classifieds Group (BCG) 166.40p 5.45%
Watches of Switzerland Group (WOSG) 1,121.00p 4.57%
TUI AG Reg Shs (DI) (TUI) 236.30p 4.37%
PZ Cussons (PZC) 208.00p 3.74%
Carnival (CCL) 1,351.00p 3.64%
Harbour Energy (HBR) 514.60p 3.21%
TBC Bank Group (TBCG) 1,216.00p 3.06%
Allianz Technology Trust (ATT) 263.00p 2.73%

FTSE 250 - Fallers

Darktrace (DARK) 399.80p -11.65%
Dr. Martens (DOCS) 223.80p -6.67%
Trustpilot Group (TRST) 146.20p -4.96%
Pagegroup (PAGE) 459.80p -4.68%
Liontrust Asset Management (LIO) 1,230.00p -4.21%
Mitchells & Butlers (MAB) 232.60p -4.20%
Pets at Home Group (PETS) 316.60p -3.59%
Vistry Group (VTY) 893.00p -3.27%
Coats Group (COA) 71.60p -3.11%
NCC Group (NCC) 186.60p -2.90%