(Sharecast News) - London stocks ended just a smidgen lower on Wednesday after a key US inflation reading met expectations, and as investors eyed quarterly results from US chipmaker Nvidia, due after the Wall Street close.
The FTSE 100 closed down 0.1% at 10,878.12, while Brent crude was up 0.5% at $89.03 a barrel and West Texas Intermediate was 0.6% higher at $82.89, creeping higher again, having fallen earlier on reports that Iran and Oman were getting closer to reaching a deal to secure an interim reopening of the Strait of Hormuz.
Dan Coatsworth, head of markets at AJ Bell, said: "US inflation becoming sticky like a fly trap helped check the momentum of US stocks at the opening bell on Wall Street.
"The Core PCE number, historically closely watched by the Federal Reserve and investors thanks to its flexibility and the broad picture it offers of consumer spending, was in line with expectations. However, the data still carried the implication that inflationary pressures are becoming more entrenched as the impacts of the Iran war feed through to the world's largest economy.
"The S&P 500 was still just about in positive territory as investors await earnings from Nvidia, which will give a read on the sustainability of the AI story - a key area of debate for markets in 2026. Nvidia beating expectations is usually treated with a shrug at best by investors these days, so the business will have to go further if it is to provide reassurance that the AI trade still has legs.
"The FTSE 100 was steady as it remained in sight of its recent all-time highs despite selling in BP and Shell on lower oil prices. The winners in London could be found instead in the retail and aviation sectors on hopes of some progress towards resolving the Middle East crisis."
On home shores, the latest Distributive Trades Survey from the Confederation of British Industry showed that retail sales fell sharply in August as the hot weather extended a "prolonged period of weak demand".
Retail sales volumes fell at a weighted balance of -48% in the year to August, compared with -26% in July. However, retailers expect the decline to ease in September, to -22%.
Sales were also judged to be poor for the time of year, while sentiment among retailers deteriorated to -29% from -15% in May.
Price pressures picked up, with retail selling price growth accelerating to +35% from +28% in May. Retailers expect inflation to accelerate further next month, to +53%.
Across the broader distribution sector, sales volumes fell at a balance of -27%, after stabilising in July.
"Retail firms grew more downbeat in August as they grappled with sharply falling sales volumes," said Martin Sartorius, lead economist at the CBI, who noted that weak sentiment was weighing on retailers' investment and hiring plans.
Employment also continued to decline, although at a slower pace than in May, while retailers still expect to cut capital expenditure over the next 12 months.
"With parliament returning next week, thoughts will start turning to the Autumn Budget and the steps that the Government can take to restore confidence across retail and the broader distribution sector," he said.
UK corporate news was scarce, but Sage Group was the biggest faller on the top-flight index following disappointing guidance from US peer Intuit.
Hochschild Mining surged to the top of the FTSE 250 as it said first-half adjusted earnings before interest, tax, depreciation and amortisation jumped 119% to $491.5m, while revenue rose 62% to $844.4m, underpinned by higher metals prices.
In broker note action, Softcat fell after a downgrade to 'hold' from 'buy' at Deutsche Bank, while Bytes Technology rallied after an upgrade to 'buy' by the same outfit.
Market Movers
FTSE 100 (UKX) 10,878.12 -0.07%
FTSE 250 (MCX) 24,897.84 0.17%
techMARK (TASX) 6,168.04 -0.29%
FTSE 100 - Risers
JD Sports Fashion (JD.) 87.86p 3.00%
IG Group Holdings (IGG) 1,393.00p 2.73%
British American Tobacco (BATS) 4,238.00p 2.54%
Standard Chartered (STAN) 2,182.00p 1.96%
Persimmon (PSN) 1,205.50p 1.82%
Diploma (DPLM) 7,355.00p 1.73%
Airtel Africa (AAF) 339.60p 1.62%
Imperial Brands (IMB) 2,559.00p 1.55%
Games Workshop Group (GAW) 18,800.00p 1.40%
Coca-Cola HBC AG (CDI) (CCH) 4,666.00p 1.39%
FTSE 100 - Fallers
The Sage Group (SGE) 1,063.00p -3.76%
Compass Group 11 (CPG) 30.08p -2.34%
3i Group (III) 2,844.00p -2.07%
AstraZeneca (AZN) 12,234.00p -1.94%
Entain (ENT) 530.40p -1.78%
Fresnillo (FRES) 3,126.00p -1.57%
Experian (EXPN) 2,967.00p -1.40%
London Stock Exchange Group (LSEG) 8,688.00p -1.25%
Relx plc (REL) 2,586.00p -1.22%
BP (BP.) 522.70p -1.12%
FTSE 250 - Risers
Hochschild Mining (HOC) 659.00p 5.36%
Watches of Switzerland Group (WOSG) 711.00p 3.80%
Wizz Air Holdings (WIZZ) 1,122.00p 3.41%
Pollen Street Group Limited (POLN) 899.00p 2.98%
TBC Bank Group (TBCG) 5,105.00p 2.80%
Bytes Technology Group (BYIT) 425.60p 2.75%
Vietnam Enterprise Investments (DI) (VEIL) 733.00p 2.66%
Discoverie Group (DSCV) 801.00p 2.56%
Morgan Advanced Materials (MGAM) 241.00p 2.55%
Domino's Pizza Group (DOM) 211.80p 2.52%
FTSE 250 - Fallers
Energean (ENOG) 740.50p -3.20%
WPP (WPP) 381.30p -2.78%
Paragon Banking Group (PAG) 797.00p -2.09%
Raspberry PI Holdings (RPI) 575.50p -2.04%
Ceres Power Holdings (CWR) 403.20p -1.90%
Close Brothers Group (CBG) 420.00p -1.87%
Softcat (SCT) 2,044.00p -1.83%
Hays (HAS) 74.90p -1.71%
Bloomsbury Publishing (BMY) 647.00p -1.67%
Rank Group (RNK) 106.80p -1.66%
8.04 (0.07%)
41.79
0.00