London stocks were firmly in the red by midday on Thursday as worries about rising inflation rattled investors again.
The FTSE 100 was down 2.1% at 6,888.87, trading at its worst level since the first week of April. Overnight, stocks on Wall Street tumbled following an unexpected rise in US inflation.
Neil Wilson, market analyst at Markets.com, said it was “another sell everything kind of day”, with a hot inflation print from the US leaving stock markets around the world nursing losses.
“CPI inflation rose to 4.2% last month, the strongest reading since 2008. The month-on-month increase in the core reading of 0.9% was the raciest since 1982,” he said. “All else equal, higher inflation readings are headwinds for equity markets, underscoring the broad market trend of the last month as investors unload tech/growth/momentum. The reaction can be generalised as higher yields, high volatility and stronger dollar (not that I think the last of these will last) and risk assets beaten down, although reflation plays outstripped growth/momentum, as you would expect from a rising inflationary environment.”
In corporate news, Burberry shares tumbled after the luxury fashion brand reported a decline in full-year sales and operating profits, but took the decision to reinstate its dividend on the back of strong cash generation.
Hargreaves Lansdown was also under the cosh despite saying it achieved record new business in the first four months of 2021 as people invested savings amassed during the pandemic into the stock market.
Prudential was weaker as it said it was pushing the demerger of its Jackson US business back to the second half of 2021 and reported an increase in sales at its Asia and Africa operations.
BT retreated as the telecoms operator posted a 7% fall in revenue and a 6% fall in adjusted earnings for the year to end-March, reflecting the impact of Covid-19.
On the upside, 3i Group bucked the trend after well-received full-year results,
Elementis rose after the specialty chemicals company said its full-year performance was set to be towards the top end of consensus expectations amid an improvement in demand.
NNC rallied after announcing the planned acquisition of intellectual property management business Iron Mountain for $220m (£156m).
Market Movers
FTSE 100 (UKX) 6,859.69 -2.07%
FTSE 250 (MCX) 21,820.00 -1.30%
techMARK (TASX) 4,165.87 -1.60%
FTSE 100 – Risers
3i Group (III) 1,210.50p 1.04%
Pershing Square Holdings Ltd NPV (PSH) 2,530.00p 0.80%
Aveva Group (AVV) 3,124.00p 0.55%
Intertek Group (ITRK) 5,818.00p 0.17%
Spirax-Sarco Engineering (SPX) 11,795.00p 0.13%
Ashtead Group (AHT) 4,805.00p 0.08%
SSE (SSE) 1,448.00p 0.03%
RSA Insurance Group (RSA) 683.60p -0.03%
Auto Trader Group (AUTO) 543.40p -0.04%
Ocado Group (OCDO) 1,939.00p -0.05%
FTSE 100 – Fallers
Burberry Group (BRBY) 1,940.00p -7.79%
Hargreaves Lansdown (HL.) 1,675.00p -5.47%
Anglo American (AAL) 3,227.50p -5.10%
Prudential (PRU) 1,447.50p -5.08%
BT Group (BT.A) 160.85p -4.85%
BHP Group (BHP) 2,237.00p -4.59%
Rio Tinto (RIO) 6,277.00p -4.53%
Legal & General Group (LGEN) 271.10p -3.76%
Barclays (BARC) 174.84p -3.65%
Glencore (GLEN) 321.00p -3.63%
FTSE 250 – Risers
NCC Group (NCC) 274.50p 8.07%
Network International Holdings (NETW) 378.50p 1.77%
ICG Enterprise Trust (ICGT) 1,086.00p 1.50%
Elementis (ELM) 141.70p 1.14%
Greggs (GRG) 2,496.00p 1.05%
Safestore Holdings (SAFE) 891.00p 0.96%
Man Group (EMG) 162.55p 0.84%
Contour Global (GLO) 194.60p 0.83%
Syncona Limited NPV (SYNC) 216.50p 0.70%
Hilton Food Group (HFG) 1,208.00p 0.67%
FTSE 250 – Fallers
Wood Group (John) (WG.) 267.50p -6.21%
Tullow Oil (TLW) 51.82p -5.37%
Provident Financial (PFG) 228.80p -5.30%
Ferrexpo (FXPO) 475.20p -5.15%
Grainger (GRI) 280.60p -4.88%
Cineworld Group (CINE) 85.00p -4.88%
National Express Group (NEX) 280.00p -4.63%
Hochschild Mining (HOC) 191.50p -4.44%
Hammerson (HMSO) 34.60p -4.42%
Restaurant Group (RTN) 122.20p -4.38%
