European markets were muted on Wednesday, following hot inflation data from the UK and US.
Across the Atlantic, meanwhile, New York opened higher on the day the new Wall Street banking earnings season kicked off, with JPMorgan the first to report.
The FTSE 100 index inched up 4.14 points, or 0.1%, at 7,580.80 on Wednesday. The mid-cap FTSE 250 index nudged down 25.16 points, or 0.1%, at 20,984.45, while the AIM All-Share index added 1.15 points, or 0.1%, at 1,056.81.
The Cboe UK 100 index ended down 0.1% at 754.18. The Cboe 250 closed down 0.2% at 18,443.93, and the Cboe Small Companies rose 0.1% at 15,422.92.
In mainland Europe, the CAC 40 in Paris closed up 0.1%, while the DAX 40 in Frankfurt ended down 0.3%.
The UK consumer price index rose by 7.0% in the 12 months to March 2022, advancing from February’s 6.2% rise, data from the Office for National Statistics showed.
Wednesday’s print is the highest 12-month inflation rate in the National Statistics series, which began in January 1997. It is also the highest rate in the historic series since March 1992.
The UK inflation data followed two equally hot figures in Germany and the US on Tuesday.
US producer price growth was also robust, according to figures on Wednesday.
On an annual basis, PPI surged over 11.2% in March, which the Bureau of Labor Statistics noted is the largest increase since 12-month data was first calculated in November 2010. The market expected a 10.5% increase.
The pound was quoted at $1.3060 at the time of London equities close on Wednesday, up from $1.3037 late Tuesday. The euro was priced at $1.0863, unchanged from late Tuesday.
On Thursday, eyes turn to the European Central Bank, with its latest interest rate decision at 1245 BST. A press conference will follow at 1330 BST.
Against the yen, the dollar was trading at JP¥125.69, up from JP¥125.14.
Gold prices rose, meanwhile, with the yellow metal seen as a hedge against inflation.
Gold stood at $1,977.64 an ounce late Wednesday, up against $1,973.44 late Tuesday.
Bullion hit an intraday high of $1,980.65 an ounce on Wednesday, a one-month high.
Gold miner Fresnillo closed among the best performing London-listed large caps, rising 2.7%. Peer Hochschild Mining rose 6.3%, topping the FTSE 250s.
Elsewhere in London, grocer Tesco fell 2.3% after it forecast growth slowing in the current financial year.
Tesco warned of a hit to profit in the year ahead amid inflationary pressures and normalising consumer behaviour post-pandemic.
For the financial year ended February 26, pretax profit ballooned to £2.03 billion from £636 million. Revenue rose 6% to £61.34 billion from £57.89 billion, as group sales increased 2.5% to £54.77 billion from £53.45 billion.
Revenue came in above the company-compiled consensus of £61.20 billion.
For the new financial year, Tesco is guiding for retail adjusted operating profit between £2.4 billion and £2.6 billion - which would be below the £2.65 billion registered in financial 2022. It gave the guidance ‘in the form of a wider than usual range’ to reflect the uncertainties facing the business, such as inflation and normalising customer behaviour.
Darktrace shares initially rose before facing selling pressure. The stock closed down 12%, despite the cyber security firm lifting its outlook for the year ending June 30.
Revenue for the penultimate quarter rose 50% yearly to $109.8 million, bringing its nine-month total to $302.4 million, up 52% year-on-year.
Darktrace said it is increasing its financial 2022 guidance. It now expects annualised recurring revenue growth between 40% and 42%, up from a range of 39% to 40% previously.
London-listed retailers largely struggled on Wednesday, with traders mindful of an inflationary hit to consumer spending. Furniture seller Made.com fell 3.2%, high street chain Superdry lost 4.2%, while fast-fashion company boohoo dropped 4.8%.
Ted Baker bucked the trend, however, rising 3.3%.
Ted Baker confirmed that Sycamore Partners Management will participate in the retailer’s formal sale process but cautioned that there is no certainty any offer will be made. As such, Sycamore is no longer required to stick to Friday’s deadline to either make a firm offer for Ted Baker or walk away.
Stocks in New York were higher at the time of the closing bell in Europe. The Dow Jones Industrial Average rose 0.6%, the S&P 500 added 0.7%, while the Nasdaq Composite climbed 1.5%.
JPMorgan shares were 2.3% lower, however.
It kicked off first-quarter earnings season for US banks with a drop in net income after building up credit reserves. It also saw revenue fall as its investment bank suffered from lower fees.
In the three months to March 31, net income slumped 42% to $8.28 billion from $14.30 billion. Diluted earnings per share fell to $2.63 from $4.50.
JPMorgan blamed the sharp drop in profit on a net credit reserve build of $902 million in the quarter compared to a net credit reserve release of $5.2 billion in the prior year.
Total net revenue slipped 5% to $30.72 billion from $32.27 billion.
‘We remain optimistic on the economy, at least for the short term - consumer and business balance sheets as well as consumer spending remain at healthy levels - but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine,’ cautioned Chief Executive Jamie Dimon.
JPMorgan has set the bar for the rest of the US banking sector, kicking off earnings season with peers Goldman Sachs, Morgan Stanley, Wells Fargo and Citigroup to follow on Thursday, with Bank of America reporting on Monday.
Brent oil was quoted at $106.79 a barrel late Wednesday, up against $104.70 at the time of the equity market close in London on Tuesday.
Following the ECB’s interest rate decision, Thursday’s economic calendar has the latest US initial unemployment claims at 1330 BST.
Thursday’s UK corporate calendar has a trading statement from furniture retailer Dunelm and emerging markets-focused asset manager Ashmore Group.
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