London open: FTSE slides as Reckitt, HSBC drop after results

(Sharecast News) - London stocks slid in early trade on Tuesday, with HSBC and Reckitt Benckiser under the cosh after third-quarter results failed to impress.

At 0835 GMT, the FTSE 100 was down 1% at 10,663.31.

Investors were be mulling data showing that shop price inflation rose in October to its highest level in two and a half years as energy and transport costs took their tool.

The latest BRC-NIQ shop price monitor showed that shop price inflation increased to 2.1% year-on-from 1.4% in September. This was above the three-month average of 1.6%.

Food inflation rose to 2.9%, against growth of 2.5% in September, while non-food inflation grew to 1.7% in October from 0.8% in September.

Fresh food inflation was unchanged at 2.6%, while ambient food inflation increased to 3.2% from 2.2%.

Helen Dickinson, chief executive of the British Retail Consortium, said: "The dam is starting to break on the huge wave of costs retailers have absorbed over the last two years. Food inflation rose again, driven by ambient groceries, although retailers still delivered plenty of promotions on sweet treats ahead of Halloween. Non-food inflation climbed to an almost three-year peak as high energy and transport costs pushed up prices with furniture, flooring and DIY particularly affected this month.

"The message to the Chancellor ahead of tomorrow's Budget could not be clearer: act now or prices will keep on rising. Retailers cannot endlessly swallow higher business rates, employment costs, energy bills, and packaging taxes. Without a change of course, October's jump in inflation is only the beginning. Our recipe for the Chancellor is simple. Slash employment costs. Cancel the 3.5% business rates increase. Remove shops from the high-value surtax. Otherwise, households will end up paying the price."

In equity markets, Reckitt Benckiser slid as the consumer goods giant cut its full-year sales growth guidance after third-quarter trading fell short of expectations, hit by manufacturing constraints in North America and weaker demand for vitamins and supplements in China.

HSBC tumbled as it posted a 32% jump in pre-tax profit but third-quarter results from the bank were a touch short of expectations. Pre-tax profit rose to $9.63bn, with revenue 5% higher at $18.62bn, mainly reflecting growth in banking net interest income. Both figures were just slightly below forecasts, however, as analysts were expecting pre-tax profit of $9.69bn and revenue of $18.93bn.

Net interest income - the difference between what banks charge for loans and what they pay out for savers' deposits - was up 6% on the same period a year earlier to $9.3bn.

Chris Beauchamp, chief market analyst at IG, said: "You don't usually get fireworks from HSBC results, and these are no exception. There are signs of some improvement overall, and a boost to the buyback is welcome, but it's clear why the market wasn't really inspired by these numbers.

"HSBC seems to be doing ok, but ok doesn't really cut it in a world where inflation is back on the menu and growth may start to slow. At least it's not exactly rolling in profits this time around, providing some useful air cover ahead of a UK budget that will may include another raid on banks."

Informa fell as it maintained its full-year earnings growth guidance despite further disruption to events in the Middle East, but warned that revenue growth could slow significantly if trading in Saudi Arabia remained suspended.

On the upside, housebuilder Vistry rallied after saying it has appointed Helen Miles - the current chief financial officer of water company Severn Trent - as its new CFO. Severn Trent was in the red.

Market Movers

FTSE 100 (UKX) 10,663.31 -0.97%

FTSE 250 (MCX) 24,458.30 -0.18%

techMARK (TASX) 6,282.42 -0.51%

FTSE 100 - Risers

Computacenter (CCC) 5,320.00p 2.12%

Rio Tinto (RIO) 6,347.00p 1.76%

Antofagasta (ANTO) 3,220.00p 1.26%

Rentokil Initial (RTO) 344.30p 1.09%

Anglo American (AAL) 3,786.00p 0.77%

Pershing Square Holdings Ltd NPV (PSH) 3,806.00p 0.69%

Abrdn (ABDN) 219.60p 0.64%

Balfour Beatty (BBY) 853.50p 0.53%

Glencore (GLEN) 541.90p 0.52%

IG Group Holdings (IGG) 966.00p 0.47%

FTSE 100 - Fallers

Reckitt Benckiser Group (RKT) 5,116.00p -6.86%

HSBC Holdings (HSBA) 1,279.00p -6.18%

Informa (INF) 819.80p -2.11%

Standard Chartered (STAN) 1,976.50p -1.62%

Burberry Group (BRBY) 1,051.00p -1.45%

Sainsbury (J) (SBRY) 348.00p -1.44%

Severn Trent (SVT) 3,202.00p -1.42%

3i Group (III) 2,345.00p -1.22%

United Utilities Group (UU.) 1,487.00p -1.13%

Whitbread (WTB) 2,574.00p -1.11%

FTSE 250 - Risers

Vistry Group (VTY) 263.80p 3.21%

Pollen Street Group Limited (POLN) 935.00p 2.75%

Ocado Group (OCDO) 329.20p 1.86%

Pacific Horizon Inv Trust (PHI) 992.00p 1.74%

RHI Magnesita N.V. (DI) (RHIM) 2,660.00p 1.53%

Schroder Asia Pacific Fund (SDP) 777.00p 1.44%

Sequoia Economic Infrastructure Income Fund Limited (SEQI) 81.50p 1.37%

Man Group (EMG) 335.40p 1.33%

HGCapital Trust (HGT) 406.00p 1.25%

Workspace Group (WKP) 340.00p 1.19%

FTSE 250 - Fallers

AO World (AO.) 92.30p -3.98%

Oxford Biomedica (OXB) 524.00p -3.23%

B&M European Value Retail (BME) 274.60p -1.85%

Auction Technology Group (ATG) 465.80p -1.81%

Patria Private Equity Trust (PPET) 598.00p -1.64%

Trustpilot Group (TRST) 249.80p -1.58%

Globaldata (DATA) 62.95p -1.56%

International Workplace Group (IWG) 183.50p -1.45%

Fidelity Emerging Markets Limited Ptg NPV (FEML) 1,304.00p -1.36%

Inchcape (INCH) 640.50p -1.31%