London stocks remained little changed come midday thanks to an apparent easing in geopolitical tensions, even as data showed UK consumer price inflation increased at the fastest clip since March 1992 in January.
On Wednesday, Moscow’s ambassador to the European Union, Vladimir Chizhov, told Die Welt that “There will be no escalation in the coming week, or in the week after that, or in the coming month.”
Against that backdrop, as of 1203 GMT, the FTSE 100 was off by 0.21% at 7,593.09, while sterling was 0.18% firmer against the dollar at 1.3563. The second-tier index meanwhile was drifting just 0.07% lower to 21,838.15.
“With tensions easing on the border, attention has quickly shifted back to inflation following some more disappointing figures this morning,” Oanda senior market analyst Craig Erlam mused out loud.
“Ultimately, the economy will suffer further even if many are better able to absorb higher prices as a result of savings built up over the last couple of years. That may encourage the Bank of England to be cautious in raising rates in the second half of the year as inflation falls but markets are clearly not of that view.”
According to Erlam, financial markets were pricing-in another five 25 basis point hikes in Bank Rate by year end.
Figures released earlier by the Office for National Statistics showed that inflation hit 5.5% in January (consensus: 5.4%) as consumer prices reached their highest level in 30 years.
ONS said there had been fewer January sales as retailers looked to pass on higher costs.
“Clothing and footwear pushed inflation up this month and although there were still the traditional price drops, it was the smallest January fall since 1990, with fewer sales than last year,” said ONS chief economist Grant Fitzner.
Electricity prices rose by 19.2% year on year, with gas prices surging 28.3% due to energy price cap increases last April and October 2021, and rising energy prices in Northern Ireland, which is not subject to regulatory capping measures.
The Bank of England earlier this month said it expected inflation would peak at around 7.25% in April, when a 54% rise in regulated household energy bills take effect.
In equity markets, Indivior surged to the top of the FTSE 250 after saying it was considering a US listing for its shares as the drugs company swung to an annual profit and predicted strong growth for its Sublocade opioid.
Primary Health Properties also rose after it lifted its dividend and unveiled a rise in annual earnings, driven by demand for facilities to catch up on the backlog of delayed operations due to the Covid pandemic.
In broker note action, BAE Systems was a little weaker after a downgrade to ‘equalweight’ at Morgan Stanley, while Howden Joinery was boosted by an upgrade to ‘buy’ at Citi.
Market Movers
FTSE 100 (UKX) 7,588.65 -0.27%
FTSE 250 (MCX) 21,841.03 -0.05%
techMARK (TASX) 4,390.01 -0.32%
FTSE 100 – Risers
Polymetal International (POLY) 1,167.50p 3.36%
Fresnillo (FRES) 654.40p 1.80%
Anglo American (AAL) 3,561.00p 1.28%
SSE (SSE) 1,570.50p 1.03%
Smurfit Kappa Group (CDI) (SKG) 4,079.00p 0.97%
Dechra Pharmaceuticals (DPH) 3,916.00p 0.77%
British Land Company (BLND) 542.60p 0.59%
Hargreaves Lansdown (HL.) 1,313.50p 0.57%
Scottish Mortgage Inv Trust (SMT) 1,085.50p 0.56%
BP (BP.) 399.40p 0.52%
FTSE 100 – Fallers
Ocado Group (OCDO) 1,321.00p -3.08%
B&M European Value Retail S.A. (DI) (BME) 567.60p -2.00%
Tesco (TSCO) 294.30p -1.64%
Whitbread (WTB) 3,173.00p -1.61%
JD Sports Fashion (JD.) 166.15p -1.60%
Compass Group (CPG) 1,785.50p -1.60%
Auto Trader Group (AUTO) 640.20p -1.51%
Informa (INF) 615.60p -1.35%
Rightmove (RMV) 629.80p -1.32%
Royal Mail (RMG) 432.20p -1.30%
FTSE 250 – Risers
Indivior (INDV) 252.60p 10.89%
Ferrexpo (FXPO) 294.00p 3.38%
Tritax Eurobox (GBP) (EBOX) 104.60p 2.55%
Hilton Food Group (HFG) 1,048.00p 2.34%
Watches of Switzerland Group (WOSG) 1,342.00p 2.13%
Baillie Gifford US Growth Trust (USA) 242.50p 2.11%
Trustpilot Group (TRST) 160.00p 1.98%
Energean (ENOG) 949.00p 1.93%
TUI AG Reg Shs (DI) (TUI) 293.50p 1.80%
Mediclinic International (MDC) 345.40p 1.77%
FTSE 250 – Fallers
Drax Group (DRX) 607.50p -2.96%
Darktrace (DARK) 349.80p -2.73%
Mitie Group (MTO) 60.80p -2.41%
Cineworld Group (CINE) 40.29p -2.40%
SSP Group (SSPG) 292.40p -2.37%
Auction Technology Group (ATG) 908.00p -2.37%
Capita (CPI) 30.22p -2.36%
FDM Group (Holdings) (FDM) 930.00p -2.31%
Diploma (DPLM) 2,624.00p -2.31%
National Express Group (NEX) 273.60p -2.29%
