London open: Stocks nudge up; inflation eases as expected

(Sharecast News) - London stocks nudged higher in early trade on Wednesday as investors mulled the latest UK inflation data and continued to eye developments in the Middle East.

At 0830 BST, the FTSE 100 was up 0.1% at 8,845.16.

Figures released earlier by the Office for National Statistics showed the consumer price index rose 3.4% in May, down from 3.5% in April and in line with expectations.

The ONS said the largest downward contribution came from transport, while the largest upward contributions came from food, and furniture and household goods.

Core CPI - which excludes food and energy - rose 3.5% in May, down from 3.8% the month before. This was also in line with analysts' expectations.

The data also showed that services CPI increased 4.7%, down from 5.4% in April.

ONS acting chief economist Richard Heys said: "A variety of counteracting price movements meant inflation was little changed in May.

"Air fares fell this month, compared with a large rise at the same time last year, as the timing of Easter and school holidays affected pricing. Meanwhile, motor fuel costs also saw a drop.

"These were partially offset by rising food prices, particularly items such as chocolates and meat products. The cost of furniture and household goods, including fridge freezers and vacuum cleaners, also increased."

Richard Hunter, head of markets at Interactive Investor, said: "The UK inflation rate, while stable, is most unlikely to sway the Bank of England from its expected no-change decision on interest rates tomorrow. Further out, a softening labour market, weakening GDP growth, domestic cost increases and general global uncertainty may force its hand to reduce rates and provide a boon for an ailing UK economy, but for the moment its generally cautious and conservative attitude is likely to prevail.

"Meanwhile, investors were undecided in the absence of any further major developments, with the FTSE 100 making limited but unconvincing progress at the open. The premier index has struggled to form a new base camp from which to build on its recent record highs. Even so, a rise of 8.3% so far this year puts it in prime position compared to many developed markets, with its previously untouchable reputation increasingly being eroded."

Looking ahead to the rest of the day, attention will turn to the Federal Reserve's latest policy announcement, due after the close of European markets, with no changes to the policy rate expected.

In equity markets, Rathbones surged after Bank of America initiated coverage of the stock at 'buy'.

PZ Cussons gained after saying it had sold its 50% equity stake in non-core Nigerian joint venture PZ Wilmar and narrowing its guidance for FY25 adjusted operating profit.

Tullow Oil slumped following a report that potential merger talks between it and Canadian-listed peer Meren Energy have collapsed.

Market Movers

FTSE 100 (UKX) 8,845.16 0.13%

FTSE 250 (MCX) 21,242.18 0.02%

techMARK (TASX) 5,065.57 -0.08%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 20,270.00p 1.99%

Entain (ENT) 851.20p 1.62%

Melrose Industries (MRO) 479.30p 1.08%

The Sage Group (SGE) 1,281.00p 0.99%

Babcock International Group (BAB) 1,060.00p 0.86%

Aviva (AV.) 609.60p 0.83%

Imperial Brands (IMB) 2,949.00p 0.75%

Auto Trader Group (AUTO) 807.80p 0.72%

Admiral Group (ADM) 3,352.00p 0.72%

Tesco (TSCO) 399.00p 0.71%

FTSE 100 - Fallers

AstraZeneca (AZN) 10,508.00p -1.44%

GSK (GSK) 1,460.00p -1.35%

Smith & Nephew (SN.) 1,066.00p -1.07%

Smurfit Westrock (DI) (SWR) 3,177.00p -0.87%

Compass Group (CPG) 2,526.00p -0.79%

easyJet (EZJ) 532.40p -0.63%

Convatec Group (CTEC) 284.20p -0.63%

Scottish Mortgage Inv Trust (SMT) 1,001.00p -0.55%

WPP (WPP) 528.80p -0.45%

Ashtead Group (AHT) 4,544.00p -0.44%

FTSE 250 - Risers

Rathbones Group (RAT) 1,772.00p 6.62%

Bloomsbury Publishing (BMY) 528.00p 4.55%

Victrex plc (VCT) 792.00p 2.33%

Me Group International (MEGP) 215.00p 1.90%

Rank Group (RNK) 133.00p 1.53%

Telecom Plus (TEP) 2,060.00p 1.48%

Just Group (JUST) 142.60p 1.42%

Merchants Trust (MRCH) 568.00p 1.07%

B&M European Value Retail S.A. (DI) (BME) 267.20p 1.06%

Helios Towers (HTWS) 120.00p 1.01%

FTSE 250 - Fallers

Senior (SNR) 159.80p -4.77%

Howden Joinery Group (HWDN) 850.00p -2.86%

THG (THG) 25.14p -2.41%

FirstGroup (FGP) 217.00p -2.34%

Carnival (CCL) 1,566.50p -1.48%

Ferrexpo (FXPO) 48.35p -1.33%

Ninety One (N91) 178.90p -1.21%

Renishaw (RSW) 2,815.00p -1.05%

Barr (A.G.) (BAG) 668.00p -1.04%

Travis Perkins (TPK) 614.50p -0.97%