(Sharecast News) – London stocks had pared earlier gains by midday on Wednesday as sterling gained, with investors looking ahead to Joe Biden’s inauguration as US President, as they mulled the latest UK inflation data.
The FTSE 100 was down 0.1% at 6,722.80, underperforming its European peers, as sterling rose 0.3% against the dollar to 1.3676. A firmer pound tends to dent the top-flight index as around 70% of its constituents derive most of their earnings from overseas.
IG market analyst Joshua Mahony said: “What Biden brings in terms of spending promises have understandably grabbed the headlines, with Janet Yellen perhaps channelling the spirit of Trump to encourage Senate to ‘act big[ly]’. However, with Trump and Brexit negotiations in the rear-view mirror, markets are faced with a four-year stint of greater stability and less uncertainty.
“The coronavirus pandemic remains a clear hurdle to overcome, yet the actions taken at both government and central bank level have mitigated a great deal of the suffering that would have come in 2020 otherwise. With the FTSE 350 gainers being dominated by high-street and service sector names such as Restaurant Group, Mitchells & Butlers and WH Smith, there is a clear feeling that the current suffering provides a buying opportunity for those willing to wait it out until H2.”
On home shores, investors were digesting the latest data from the Office for National Statistics, which showed that inflation rose to 0.6% in December from 0.3% in November despite the closure of non-essential shops.
ONS deputy national statistician for Economic Statistics Jonathan Athow said: “Clothing prices put upward pressure on inflation in December, despite some evidence of continued discounting. Transport costs, including air, sea and coach fares, as well as petrol prices, rose as some travel restrictions eased during parts of the month.
“These were partially offset by falling food prices, most notably for vegetables and meat.”
In equity markets, education publisher Pearson was the standout gainer on the FTSE 100 as it said sales and profit for the full year were in line with expectations despite the additional impact of Covid-19 in the fourth quarter.
Burberry rallied after it said sales fell in the third quarter as the impact of Covid-19 and fewer price cuts offset strong sales of full-price items boosted by its association with footballer Marcus Rashford.
Hochschild was on the front foot as the miner lifted 2021 output guidance after full-year production came in at the upper end of forecasts, despite pandemic disruption.
Stationery retailer WH Smith gained after it reported better-than-expected Christmas trading despite burning through £15m to £20m in cash a month during the current Covid-19 lockdown.
Diploma was also higher after hailing a strong start to the year, with improved trends in underlying trading across all of its three sectors in the first quarter.
On the downside, Dixons Carphone was in the red even as it maintained full-year guidance and reported a sharp rise in electricals revenue over the Christmas period, driven by people buying televisions and computers during the coronavirus lockdown. The company said mobile phone total revenue plunged 40% as its Carphone Warehouse stores were closed under Covid restrictions.
In broker note action, Standard Chartered was weaker after a downgrade to ‘neutral’ at Citi after the recent share price rally. Wood Group was knocked lower by a downgrade to ‘underperform’ at Jefferies, while Royal Mail was boosted by an upgrade to ‘buy’ at Deutsche Bank.
FTSE 100 (UKX) 6,709.77 -0.05%
FTSE 250 (MCX) 20,779.26 0.86%
techMARK (TASX) 4,169.01 0.43%
FTSE 100 – Risers
Pearson (PSON) 723.80p 6.60%
Johnson Matthey (JMAT) 2,864.00p 4.64%
Evraz (EVR) 519.00p 3.02%
Glencore (GLEN) 280.55p 2.48%
BHP Group (BHP) 2,162.00p 2.42%
Antofagasta (ANTO) 1,546.50p 2.35%
Polymetal International (POLY) 1,675.50p 2.32%
Hikma Pharmaceuticals (HIK) 2,551.00p 2.20%
Entain (ENT) 1,272.00p 2.17%
Anglo American (AAL) 2,680.50p 2.08%
FTSE 100 – Fallers
Standard Chartered (STAN) 461.50p -3.17%
Lloyds Banking Group (LLOY) 35.17p -2.31%
National Grid (NG.) 863.60p -1.73%
Barclays (BARC) 144.62p -1.53%
NATWEST GROUP PLC ORD 100P (NWG) 155.05p -1.43%
GlaxoSmithKline (GSK) 1,391.20p -1.36%
Experian (EXPN) 2,646.00p -1.23%
Avast (AVST) 533.50p -1.20%
HSBC Holdings (HSBA) 406.50p -1.20%
Unilever (ULVR) 4,332.00p -1.12%
FTSE 250 – Risers
WH Smith (SMWH) 1,703.00p 9.52%
Mitchells & Butlers (MAB) 277.00p 8.63%
Hochschild Mining (HOC) 205.80p 6.30%
Renishaw (RSW) 6,100.00p 4.45%
Wetherspoon (J.D.) (JDW) 1,234.00p 4.31%
Herald Investment Trust (HRI) 2,290.00p 4.09%
4Imprint Group (FOUR) 2,295.00p 4.08%
RHI Magnesita N.V. (DI) (RHIM) 3,916.00p 3.98%
Ascential (ASCL) 368.20p 3.89%
Gamesys Group (GYS) 1,344.00p 3.70%
FTSE 250 – Fallers
Wood Group (John) (WG.) 313.90p -4.56%
AO World (AO.) 348.00p -3.73%
Dixons Carphone (DC.) 119.30p -3.32%
Elementis (ELM) 113.60p -2.82%
easyJet (EZJ) 823.00p -2.63%
JPMorgan Japanese Inv Trust (JFJ) 718.00p -1.24%
Avon Rubber (AVON) 3,380.00p -1.17%
Paragon Banking Group (PAG) 477.00p -1.12%
Serco Group (SRP) 122.90p -1.05%
Telecom Plus (TEP) 1,354.00p -1.02%