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London pre-open: Stocks seen higher as investors mull inflation data

(Sharecast News) – London stocks were to rise at the open on Wednesday as investors mull the latest UK inflation data.
The FTSE 100 was called to open 15 points higher at 6,728.

CMC Markets analyst Michael Hewson said: “Last night’s positive US finish looks set to translate into a mixed European open this morning, as the continued delays to a return to some semblance of an economic normal, caused by a slow vaccine rollout in Europe, and the further extension of restrictions, is making it much more difficult to time any sort of recovery trade for European stocks.”

Investors will be 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 corporate news, Dixons Carphone maintained full year guidance as it 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 like-for-like revenue from the electricals unit rose 11% in the 10 weeks to January 9. In the UK and Ireland online sales grew 121%. However mobile phone total revenue plunged 40% as its Carphone Warehouse stores were closed under Covid restrictions.

Burberry sales fell in the third quarter as the impact of Covid-19 and fewer price cuts offset strong sales of full-price items.

Reported retail revenue fell 4% to £688m in the three months to the end of December as coronavirus-related store closures averaged 7%. Comparable store sales fell 9% as Burberry reduced markdowns but full-price transactions rose at a “high single-digit” pace.

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