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(Alliance News) - Stocks in London were trading lower on Wednesday amid concern about the impact that higher prices will have on economies around the world
The FTSE 100 index was down 37.98 points, or 0.5%, at 7,086.74 early Wednesday. The mid-cap FTSE 250 index was down 107.78 points, or 0.5%, at 22,819.03. The AIM All-Share index was down 0.4% at 1,244.59.
The Cboe UK 100 index was down 0.4% at 705.93. The Cboe 250 was 0.5% lower at 20,482.95, and the Cboe Small Companies down 0.1% at 15,300.82.
In mainland Europe, the DAX 30 in Frankfurt was 0.2% lower early Wednesday. Financial markets are closed in France on Wednesday for the Bastille Day holiday.
The Office for National Statistics said the UK consumer price index jumped 2.5% on an annual basis in June, accelerating from 2.1% growth in May. The largest upward contribution to the 12-month inflation rate came from transport.
Month-on-month, UK consumer prices rose 0.5% in June, slower than May's 0.6% rate of monthly growth.
Prices for food, second-hand cars, clothing and footwear, eating and drinking out, and motor fuel rose between May and June after falling between the same two months a year ago.
A separate release from the ONS on Wednesday showed UK producer price inflation also strengthened in May.
Output prices grew 4.3% in the year to June, slowing from growth of 4.4% in May, while input prices jumped 9.1% on a 12-month basis, again easing from May when prices grew 10%.
"Inflation has risen ahead of economist's expectations and is now firmly above the Bank of England's [2.0%] target. However we're still stuck in inflationary limbo, where we can't tell if rising prices are a statistical blip, or a more concerning and permanent feature of the global economic recovery," said IG Bell financial analyst Laith Khalaf.
The UK print on Wednesday followed figures on Tuesday showing US consumer price inflation accelerated to 5.4% in June from 5.0% in May.
Sterling was quoted at USD1.3849 early Wednesday, higher than USD1.3838 at the London equities close on Tuesday.
The euro traded at USD1.1795 early Wednesday, lower against USD1.1815 late Tuesday. Against the yen, the dollar was up to JPY110.49 from JPY110.33.
On the London Stock Exchange, Barratt Developments was up 0.7% after reporting strong demand across the country in the financial year that ended June 30. Net private reservations per active outlet per week were 0.78, up from 0.60 in financial 2020 and 0.70 in financial 2019.
Completion volumes also ticked up, with 17,243 total homes completed in the recent financial year versus 12,604 homes in financial 2020 and 17,856 homes in financial 2019.
Barratt said it expects pretax profit, after adjusted items of GBP107 million, to be at the top end of the range of market forecasts.
Looking ahead, the company said it is well positioned for its new financial year, with total forward sales - including joint ventures - as at June 30 of 14,334 homes, up from 14,326 homes the year before and up from 11,419 homes year-on-two-years.
Among the mid-caps, Coats Group was the second-best performer, up 1.8% in morning trading.
The industrial thread maker said that strong operational performance and demand recovery have continued in the first half of 2021, despite the impact of recent lockdowns in India in May and June, which have now subsided.
Sales for the half-year were USD732 million, up from USD536 million a year ago and up from USD705 million in the first half of 2019.
Coats said it now expects adjusted operating profit for the first half to be around USD95 million, almost tripled from USD34 million a year prior but lower than USD102 million in the first half of 2019.
Dunelm was at the other end of the FTSE 250-index, down 2.8% despite reporting total sales in the 13-week period ended June 26 more than doubled compared to the same period last year. On a two-year basis, total sales in the quarter were up by 44%.
Digital sales growth also remained strong throughout the quarter, up 38% on the same period last year, Dunelm said.
Looking ahead, Chief Executive Nick Wilkinson said: "With many exciting developments in the pipeline to make us the first choice for home, and grow our customer base and frequency, there is a lot to look forward to."
Elsewhere, McBride was down 3.4% as it expects to report revenue at constant currency for the financial year to June 30 down 4.0% versus the previous year.
The cleaning and household products company said weaker run rates, coupled with short-term consumer stockpiling in the comparative period in the early stage of lockdown in 2020, have resulted in lower second half revenue.
McBride said the raw material environment also remains challenging, both in terms of supply availability and exceptional price increases.
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.4%. In China, the Shanghai Composite closed down 1.1%, and the Hang Seng index in Hong Kong fell by 0.7%.
"Some investors looked for bargains, but overall Asian markets have been rather soft. The Nikkei index lacked the energy to shoot into positive territory," SMBC Nikko Securities said.
Brent oil was trading at USD76.49 a barrel early Wednesday, rising from USD75.50 late Tuesday. Gold was quoted at USD1,813.35 an ounce early Wednesday, up from USD1,811.70 on Tuesday.
The economic events calendar on Wednesday has eurozone industrial production numbers at 1000 BST and US producer prices at 1330 BST.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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