Stock prices in London were in the green on Wednesday morning, after Office for National Statistics data showed that while the rise in consumer prices accelerated, it was softer than anticipated.
The FTSE 100 index opened 50.47 points, or 0.6%, at 8,285.28. The FTSE 250 was up 129.38 points, 0.6%, at 20,874.28, and the AIM All-Share was up 1.62 points, or 0.2%, at 769.60.
The Cboe UK 100 was up 0.8% at 828.72, the Cboe UK 250 was up 0.5% at 18,287.16, and the Cboe Small Companies was unchanged at 16,806.76.
The Office for National Statistics reported that annual consumer price index inflation in the UK increased to 2.2% in July from 2.0% in June.
However, this was short of the increase to 2.3% that had been expected by FXStreet-cited market consensus. It marks the first time annual CPI inflation accelerated since December, when it increased to 4.0% from 3.9% in November.
On a monthly basis, prices declined by 0.2% in July, compared to an increase of 0.1% in June from May. CPI including owner occupiers’ housing costs, or CPIH, rose 3.1% on-year in July, accelerating from 2.8% in June.
Producer prices meanwhile rose 0.4% annually in July, up from flat in June, which had been upwardly revised from a previously reported decline of 0.4%. On a monthly basis, producer input prices edged down by 0.1%, slowed from a contraction of 0.4% in June.
‘We’ve long argued for a gradual dial down of restrictive policy, with the Monetary Policy Committee pushing through quarterly rate cuts all the way down to neutral. But today’s CPI report suggests that inflation isn’t quite that linear. Non-linear misses are to be expected, especially when we’ve seen big gains from volatile items,’ said Deutsche Bank’s chief UK economist, Sanjay Raja.
Raja added: ‘The next round of inflation and labour market data will be crucial in deciding whether the MPC could push through a September rate cut. While not our base case, the odds of a back-to-back rate cut are on the rise. A September rate cut should no longer be off the table. And it’s entirely conceivable to think that we could get multiple more rate cuts this year.’
In European equities on Wednesday, the CAC 40 in Paris was up 0.4%, while the DAX 40 in Frankfurt was up 0.5%.
The pound was quoted at $1.2832 early on Wednesday in London, up compared to $1.2826 at the equities close on Tuesday. The euro stood at $1.0998, up against $1.0956. Against the yen, the dollar was trading at JP¥147.20, up compared to JP¥147.03.
In the FTSE 100, AstraZeneca was up 0.4%.
The pharmaceutical firm’s shares enjoyed a small boost, after announcing that its Lynparza and Imfinzi combination has been approved in the EU for patients with mismatch repair proficient advanced or recurrent endometrial cancer.
Imfinzi plus chemotherapy as a first-line treatment, followed by Lynparza and Imfinzi, has been approved for patients with mismatch repair proficient disease, while Imfinzi plus chemotherapy followed by Imfinzi alone has been approved for patients with mismatch repair deficient disease.
In the FTSE 250, Balfour Beatty lost 1.1%.
The infrastructure construction contractor said it is on track to achieve full-year expectations, after reporting pretax profit for the six months ended June 28 of £112 million, up from £82 million a year prior. Revenue came to £4.7 billion, up 3% from £4.5 billion, driven by increases at Support Services and Gammon.
Underlying profit from operations was £77 million, down from £80 million, while the order book stood at £16.6 billion, up from £16.5 billion the year before. Balfour Beatty raised its interim dividend by 9% to 3.8 pence from 3.5p.
Glanbia gained 9.1%.
The London-based sports nutrition company posted a pretax profit fall of 21% to $169.7 million for the six months ended June 29, from $214.0 million a year prior. Revenue was down 1.2% to $1.82 billion from $1.84 billion. Adjusted earnings per share came to 68.20 cents, up 12% from 60.78 cents a year before.
Chief Executive Officer Hugh McGuire said: ‘...with the continued consumer and customer demand for our Better Nutrition brands and ingredients we will see a sequential improvement in volumes across GPN and NS in the second half of the year. Today we are reiterating our full year guidance of 5% to 8% growth in adjusted EPS.’
Separately, the firm also announced the start of a €50 million share buyback to be run by Davy stockbrokers.
In Asia on Wednesday, the Nikkei 225 index in Tokyo was up 0.6%. In China, the Shanghai Composite and the Hang Seng index in Hong Kong were both down 0.6%. The S&P/ASX 200 in Sydney closed up 0.3%.
Japan’s unpopular Prime Minister Fumio Kishida is set to quit after announcing on Wednesday he will not seek re-election as party chief. The ruling Liberal Democratic Party, which has governed almost uninterrupted since 1945, is due to hold a leadership contest next month.
‘In this (party) presidential election, it is necessary to show the people that the LDP is changing and the party is a new LDP,’ Kishida told reporters in Tokyo.
‘...The most obvious first step to show that the LDP will change is for me to step aside,’ he said.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.0%, the S&P 500 up 1.7% and the Nasdaq Composite up 2.4%.
As the presidential election campaign heats up, Donald Trump is set to attack the Biden administration’s economic record, just days before Kamala Harris unveils her economic agenda. Trump’s campaign said he would deliver remarks in the city of Asheville, in the crucial battleground state of North Carolina, on the ‘economic hardships created by the Harris-Biden administration.’
‘Hard-working Americans are suffering because of the Harris-Biden administration’s dangerously liberal policies,’ the campaign said in a statement.
Meanwhile, Tim Walz made his first solo outing as a vice-presidential candidate on Tuesday as the Democratic ticket looks to build momentum in the quickening US election campaign.
The Midwesterner addressed union organisers in Los Angeles, pledging he would be part of a pro-worker administration. But in a shout-out to moderate Republicans wary of Trump’s hard-right positions, he also invoked a hero of the party, noting that he was the ‘first union member on a presidential ticket since Ronald Reagan.
Gold was quoted at $2,467.20 an ounce early on Wednesday, lower than $2,470.54 on Tuesday.
Brent oil was trading at $81.05 a barrel early Wednesday, higher than $80.98 late Tuesday.
Still to come on Wednesday’s economic calendar, there is unemployment, GDP, and industrial production from the eurozone at 1000 BST. Later in the day, both CPI and EIA crude oil stocks from the US.
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