London’s FTSE 100 traded 0.7% lower at 7,044.16 by lunchtime on Thursday with heavyweight oil firms BP (BP.) and Royal Dutch Shell (RDSB) in the red amid a slump in crude prices as OPEC reached a compromise on increasing production.
A steady rise in inflation coupled with higher local coronavirus infections also stoked concerns of slowing the pace of economic recovery.
Mid-caps were also weaker by noon, the FTSE 250 down 0.7% to 22,589 as fears over rising inflation weighed on the more domestically focused stocks.
Bank of England Governor Andrew Bailey said the central bank would assess inflation data for things that could be temporary, before taking a call on raising rates, while a roaring jobs market in June also showed growing inflation pressures from rising wages.
Across the pond, Jay Powell denied the Federal Reserve was being complacent about the issue as he addressed the House financial services committee Wednesday. Concerns mounted after official figures revealed the cost of living jumped by an annualised 5.4% as the world’s largest economy continued to recover from the pandemic.
COMPANIES MOVING ON THE MARKET
In corporate news, UK-based cybersecurity firm Avast (AVST) surged 15% to 580p, topping the FTSE 100 leaderboard, after it said it was in advanced talks over a merger with peer NortonLifeLock.
Cyber security play Darktrace (DARK) was up 5% to 606.4p on a robust trading update and raised profit expectations.
Shares in the world’s largest credit data company Experian (EXPN) jumped 3.8% to £30.89 as it raised its annual outlook after posting a 31% jump in its first-quarter revenue.
Online food delivery platform Just Eat Takeaway.com (JET) upgraded its annual outlook on performance, driven by the removal of fee caps in the US and Canada, improved operational performance.
Order growth forecast for 2021 was lifted to more than 45% from previous guidance of more than 42% order growth, with gross transaction value expected to be in a range of €28 billion to €30 billion.
Shares in Just Eat Takeaway.com dipped 4.4% to £61.38 with investors still showing concerns for longer-run growth amid intense competition.
Online fashion retailer ASOS (ASC:AIM) said it expected annual adjusted profit to be in line with expectations amid continued social restrictions and global supply chain pressures.
For the four months to 30 June 2021, revenue was up 31% to £1.29 billion, with UK revenue rising 60% to £526.4 million. Its share price, however, plummeted by 15% to £39.90.
ELSEWHERE ON THE MARKET
Recruitment company Hays (HAS) upgraded its outlook on profit after reporting a 39% rise in fees in the fourth quarter of its fiscal year following a sharp rebound in permanent placements.
The company said it now expect FY21 operating profit of about £95 million, ahead of market expectations of about £90.9 million, yet the stock reversed 5.3% to 159p.
Water supply operator Severn Trent (SVT) is ‘confident’ is can achieve at least £40 million positive net outperformance on customer outcome deliver incentives after a strong start to the year.
The announcement boosted its share price by 0.3% to £26.83.
The company also said it is on track to invest up to £650 million during the year, including its Green Recovery projects, and is processing as planned to deliver on its Net Zero ambitions by 2030.
Shopping centre owner Hammerson (HMSO) said rent collection was 68% in in the first half of the year, as footfall trends in all territories remained encouraging. Its share price was down 1.8% to 35.5p.
Gene and cell therapy group Oxford Biomedica (OXB) has named Dr Michael Hayden as a non-executive director, effective from July 15. The shares softened 1% to £13.18.
