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(Alliance News) - Stock prices in London opened slightly higher on Wednesday in the wake of fresh data that revealed inflation in the UK was cooling.
On an annual basis, the consumer price index eased to 10.1% in January from 10.5% in December. Consensus had expected inflation to cool to 10.3%, according to FXStreet.
Giles Coghlan, chief market analysts at HYCM said: "Although today’s modest decline in inflation shows that CPI is slowly heading in the right direction, the strength of UK wage growth remains a key concern to Bank of England policymakers, who are likely to have at least one more interest rate hike to go."
The figures come a day after US consumer price inflation slowed in January, though not by as much as expected.
Annually, inflation was 6.4%, easing slightly from 6.5% in December. The figure came above market consensus, as cited by FXStreet, which expected inflation to slow to 6.2%.
In UK corporate news, Barclays profit was hurt by credit impairments in 2022, while Hargreaves Lansdown reported a fall in managed assets over the course of its financial first half.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 3.18 points at 7,950.78
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Hang Seng: down 1.6% at 20,785.72
Nikkei 225: closed down 0.4% at 27,501.86
S&P/ASX 200: closed down 1.1% at 7,352.20
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DJIA: closed up 376.66 points, 1.1%, at 34,245.93
S&P 500: closed up 1.1% at 4,137.29
Nasdaq Composite: closed up 1.4% at 11,891.79
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EUR: down at USD1.0709 (USD1.0731)
GBP: down at USD1.2095 (USD1.2174)
USD: up at JPY133.29 (JPY132.77)
Gold: down at USD1,836.88 per ounce (USD1,852.49)
(Brent): down at USD84.36 a barrel (USD85.67)
(changes since previous London equities close)
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ECONOMICS
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Wednesday's key economic events still to come:
08:15 EST Canada housing starts
08:30 EST Canada wholesale trade
08:30 EST Canada survey of manufacturing
11:00 CET EU foreign trade
11:00 CET EU industrial production
09:30 GMT UK house price index
07:00 EST US MBA mortgage applications survey
09:15 EST US industrial production
10:00 EST US manufacturing and trade
10:00 EST US NAHB housing market index
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Inflation in the UK slowed by slightly more than forecast in January, though remained in double digits, figures from the Office for National Statistics showed. On an annual basis, the consumer price index eased to 10.1% in January from 10.5% in December. Consensus had expected inflation to cool to 10.3%, according to FXStreet. The easing in the annual inflation rate in January mainly reflected price changes in the transport division, particularly for passenger transport and motor fuels, the ONS said. On a monthly basis, UK consumer prices fell by 0.6%, compared to a 0.4% rise in December. The decline was slightly more than market expectations. Month-on-month inflation was forecast to be negative 0.4% in January. Core inflation - excluding energy, food, alcohol, and tobacco - cooled to 5.8% in January on an annual basis, from 6.3% in December.
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The Office for National Statistics said UK factory gate inflation eased in January. UK producer input prices rose 14.1% annually in January, slowing from 16.2% in December, while producer output prices rose 13.5% annually in January, slowing from 14.6% in December.
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BROKER RATING CHANGES
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Deutsche Bank raises Coca-Cola HBC price target to 2,580 (2,420) pence - 'buy'
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Deutsche Bank raises Tui price target to 168 (152) pence - 'hold'
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Berenberg raises Pets at Home price target to 430 (370) pence 'buy'
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COMPANIES - FTSE 100
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Barclays reported a fall in annual profit as a result of higher credit impairments, citing deteriorating economic forecasts. In 2022, the bank posted pretax profit of GBP7.01 billion, down from GBP8.19 billion the previous year. It booked credit impairment charges of USD1.22 billion in the year, compared to credit impairment releases of GBP653 million in 2021. Chief Executive C S Venkatakrishnan said: "Barclays performed strongly in 2022. Each business delivered income growth, with group income up 14%. We achieved our RoTE target of over 10%, maintained a strong common equity tier 1 capital ratio of 13.9%, and returned capital to shareholders. We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023."
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Hargreaves Lansdown reported a fall in managed assets over the course of its financial first half, but revenue and profit surged. Hargreaves also promised to grow its ordinary dividend. The retail investment platform reported that revenue in the six months ended December 31 jumped 20% to GBP350.0 million from GBP291.1 million a year ago. Pretax profit surged 31% to GBP197.6 million from GBP151.2 million. The Bristol, England-based company had 1.768 million active clients on December 31, which it said was up 31,000 during the half-year. Hargreaves ended the six-month period with GBP127.1 billion in total assets under administration, sliding 10% from GBP141.2 billion at the same point the year prior. However, this marks a slight improvement from GBP123.8 billion at June 30, the end of financial year 2022.
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Anglo American Platinum said Chief Executive Natascha Viljoen has resigned to go to work for US miner Newmont. The Johannesburg-listed platinum producer, which is 79% owned by Anglo American PLC, said Viljoen will continue to serve as CEO until the completion of her notice period of up to 12 months. She has been chief executive since April 2020. Viljoen will join Newmont, a Denver, Colorado-based gold miner, as its chief operating officer. Earlier this month, Newmont confirmed it has proposed to acquire Australian peer Newcrest Mining in an all-share transaction.
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COMPANIES - FTSE 250
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Dunelm reported a drop in pretax profit in the first half of its financial year to December 31. Pretax profit fell 17% year-on-year to GBP117.4 million from GBP140.8 million a year prior. Sales climbed 5.0% to GBP835.0 million from GBP795.6 million. The homewares retailer explained that the drop in interim profit was expected and reflecting the impact of sale timing and strong post-pandemic demand in the previous year, as well as the impact of inflation. Dunelm declared an interim dividend of 15 pence, up from 14p a year prior, and a special dividend of 40p.
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OTHER COMPANIES
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Brunner Investment Trust reported a net asset value of 1,164.4 pence as of November 30, 2022. This was down from a NAV of 1,176.9p at the same time a year prior. The trust's total NAV return in the year ended November 30 was 3.0%, ahead of the company's benchmark index - 70% FTSE World Ex-UK and 30% FTSE All Share Index - which returned 1.4%. Brunner said this marked the fourth year of outperformance against its benchmark index in "extremely varied and volatile conditions". The company proposed a final dividend of 6.05p, which would take the total dividend payout to 21.5p, up 6.7% against financial 2021.
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By Heather Rydings, Alliance News senior economics reporter
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