London stocks were still just a touch higher in early trade on Tuesday as investors eyed the latest US inflation reading, with AB Foods on a tear after results.
The FTSE 100 was up 0.1% at 7,309.37.
Neil Wilson, chief market analyst at Markets.com, said: “Gains of about 0.1% for the DAX and FTSE 100 keeping risk just in the green but the Stoxx 50 is flat. For US stocks it’s been a straight line up since the middle of October and whilst there is always this sense that ‘it must pull back soon’, that is sometimes when it’s finding the path of least resistance to the upside.
“Risks are starting to take shape around rising covid cases in mainland Europe and the possibility of new lockdowns – something to watch in the coming days as it could play out with weakness for European equities. German infection rate at the highest since the pandemic started. Meanwhile the inflation threat looms as large as ever – tomorrow’s CPI numbers for the US will be closely assessed.
“Today we get the PPI numbers which are going to show ongoing supply chain pressure and pass through of costs to consumers, with the consensus at +0.6% for the headline number and +0.5% for the core PPI. Recent PMI surveys point in one direction for prices and that’s up.”
Industry data out earlier showed that retail sales jumped last month as consumers splashed out on Halloween and got festive shopping underway.
According to the latest BRC-KPMG Retail Sales Monitor, total sales grew by 1.3% in October compared to the same month a year earlier, or by 6.3% when compared to October 2019. On a like-for-like basis, retail sales were down 0.2% year-on-year.
Over the three months to October, food sales rose 0.3% on a like-for-like basis, while non-food retail sales eased 0.1%.
The best-performing sectors were clothing, footwear and jewellery and watches. Furniture and computing were two of the weakest categories, hit by supply chain issues including the semiconductor shortage.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Customer demand is getting back on track ahead of Christmas, as sales grew at a faster rate than the month prior, and well above pre-pandemic levels. As social calendars started filling up with festivities, clothing and footwear sales performed well.
“However, there are challenges ahead, with higher prices on the horizon compounded by the many increasing costs faced by consumers.”
In equity markets, Primark owner Associated British Foods jumped to the top of the FTSE 100 after saying it expected “significant progress” in the current year as it reported a rise in annual profits but warned that food prices may have to rise due to increasing costs.
Aerospace and defence giant Rolls-Royce rallied as it said that following a successful equity raise, it has now established its small modular reactor business as part of the UK government’s net zero strategy.
BT was also on the rise after an upgrade to ‘buy’ from ‘hold’ at Berenberg.
Watches of Switzerland surged after upgrading its full-year outlook following a better-than-expected first-half performance. For FY22 the company now expects revenue of between £1.15bn and £1.20bn, up from previous guidance of between £1.05bn and £1.10bn. Earnings before interest, tax, depreciation and amortisation and adjusted EBITDA margin are seen up 1% to 1.5%, versus previous guidance of flat to up 0.5%.
On the downside, housebuilder Persimmon fell even as it said it was on track to grow new home completions by 10% this year and targeted a return to pre-pandemic trading levels by 2022.
DCC lost ground even as the sales, marketing and support services group reported a jump in first-half profit and revenue and said full-year results were on track to meet market expectations.
Market Movers
FTSE 100 (UKX) 7,309.37 0.12%
FTSE 250 (MCX) 23,562.77 0.10%
techMARK (TASX) 4,646.45 0.37%
FTSE 100 – Risers
Associated British Foods (ABF) 1,968.00p 5.89%
Rolls-Royce Holdings (RR.) 147.80p 4.26%
BT Group (BT.A) 163.90p 3.44%
Ocado Group (OCDO) 1,743.00p 2.44%
WPP (WPP) 1,098.50p 2.00%
Vodafone Group (VOD) 112.74p 1.60%
Pearson (PSON) 609.80p 1.53%
Flutter Entertainment (CDI) (FLTR) 12,645.00p 1.32%
ITV (ITV) 110.20p 1.29%
Antofagasta (ANTO) 1,416.50p 1.21%
FTSE 100 – Fallers
DCC (CDI) (DCC) 6,048.00p -3.79%
Persimmon (PSN) 2,647.00p -2.72%
Darktrace (DARK) 634.50p -2.31%
Abrdn (ABDN) 260.20p -1.40%
Pershing Square Holdings Ltd NPV (PSH) 2,985.00p -1.32%
Phoenix Group Holdings (PHNX) 654.80p -1.27%
Berkeley Group Holdings (The) (BKG) 4,233.00p -1.26%
Smiths Group (SMIN) 1,425.00p -1.18%
Admiral Group (ADM) 2,868.00p -1.10%
Aviva (AV.) 398.90p -1.09%
FTSE 250 – Risers
Watches of Switzerland Group (WOSG) 1,292.00p 13.93%
Sirius Real Estate Ltd. (SRE) 138.80p 4.68%
Airtel Africa (AAF) 127.20p 3.84%
4Imprint Group (FOUR) 3,015.00p 3.79%
PZ Cussons (PZC) 211.00p 3.18%
Reach (RCH) 327.00p 2.99%
Baltic Classifieds Group (BCG) 199.00p 2.58%
Marks & Spencer Group (MKS) 194.75p 2.34%
Bridgepoint Group (Reg S) (BPT) 542.00p 2.26%
Energean (ENOG) 931.50p 1.75%
FTSE 250 – Fallers
Direct Line Insurance Group (DLG) 279.60p -2.98%
Beazley (BEZ) 411.80p -2.67%
easyJet (EZJ) 634.40p -2.46%
Wood Group (John) (WG.) 199.00p -2.36%
Ashmore Group (ASHM) 309.80p -2.33%
Redde Northgate (REDD) 418.50p -1.88%
Marshalls (MSLH) 731.50p -1.81%
Hiscox Limited (DI) (HSX) 813.20p -1.81%
Hays (HAS) 163.00p -1.81%
Liontrust Asset Management (LIO) 2,200.00p -1.79%
