The latest Investing Matters Podcast episode with Inclusive Asset Management's Alexandra McGuigan has just been released. Listen here.

Less Ads, More Data, More Tools Register for FREE

LONDON MARKET CLOSE: Investors celebrate steady UK inflation

Wed, 14th Feb 2024 16:53

(Alliance News) - Stock prices in London closed higher on Wednesday, after data showed that the UK's annual inflation rate was steady last month, defying expectations of an acceleration.

The FTSE 100 index closed up 56.12 points, 0.8%, at 7,568.40. The FTSE 250 ended up 80.06 points, 0.4%, at 19,003.89, and the AIM All-Share closed up 3.21 points, 0.4%, at 750.45.

The Cboe UK 100 ended up 0.7% at 755.91, the Cboe UK 250 closed up 0.7% at 16,459.15, and the Cboe Small Companies ended up 0.3% at 14,403.20.

In European equities on Wednesday, the CAC 40 in Paris ended up 0.7%, while the DAX 40 in Frankfurt ended up 0.4%.

According to the Office for National Statistics, the rate of annual consumer price inflation was unmoved at 4.0% in January, where it had stood in December. It had been expected to pick up to 4.2%, according to FXStreet-cited consensus.

The UK annual inflation rare hit a recent peak of 11.1% in October 2022, and faded to as low as 3.9% in November of last year. The Bank of England has a 2% inflation target, with the current rate still double that.

The next Bank of England decision is on March 21. There will be another consumer price index reading a day prior to that decision for Threadneedle Street to digest.

The pound was weaker, after the UK inflation data came in below expectations. The pound was quoted at USD1.2542 at the London equities close Wednesday, down compared to USD1.2596 at the close on Tuesday.

Meanwhile, interest rate sensitive stocks rose. Housebuilders Persimmon, Taylor Wimpey and Barratt Developments added 3.8%, 1.7% and 1.6%, respectively.

Berenberg said that after the small upside surprise in US inflation data on Tuesday, the UK release was awaited with "bated breath".

According to the Bureau of Labor Statistics, US consumer price inflation eased to 3.1% in January, from 3.4% in December. It had been expected to ebb to 2.9%, according to FXStreet-cited consensus, so the latest reading topped expectations.

AJ Bell's Russ Mould said the data has raised the prospect "of the Bank of England cutting its own rates before the US." This felt unlikely just a few weeks ago.

Stocks in New York were higher at the London equities close, with the DJIA up 0.2%, the S&P 500 index up 0.5%, and the Nasdaq Composite up 0.7%.

The euro stood at USD1.0720 at the European equities close Wednesday, higher against USD1.0716 at the same time on Tuesday. Against the yen, the dollar was trading at JPY150.62, lower compared to JPY150.66 late Tuesday.

In the FTSE 100, drink bottling company Coca-Cola HBC closed up 8.0%. It was the best performer on the index on Wednesday.

The firm, which operates in nations including Cyprus, Greece and Italy, said net sales revenue surged 11% in 2023 to EUR10.18 billion, from EUR9.20 billion in 2022. Net sales fell shy of the Vuma cited consensus of EUR10.25 billion.

Pretax profit shot up 46% to EUR910.3 million from EUR623.6 million, but was shy of consensus of EUR976.3 million.

"I am deeply proud of our team as we delivered a third year of double-digit growth and record profits," Chief Executive Officer Zoran Bogdanovic said.

The CEO added: "2023 was another year of consistent execution of our growth strategy. We delivered volume growth, share gains, improved margins and record levels of free cash flow. As a result, we were able to increase shareholder returns, including the launch of a share buyback programme

In the FTSE 250, Tui fell 6.0% amid plans to be delisted in London.

Tui held its annual general meeting on Tuesday, at which shareholders were asked to approve its plan to delist from the London Stock Exchange, while upgrading to a 'prime standard' listing in Frankfurt with inclusion on the MDAX index of German mid-cap stocks. The plan, announced early last month, is to achieve "centralisation of liquidity" for Tui shares.

Late on Tuesday, Tui said shareholders voted clearly in favour of the proposed change to the company's dual listing and voted by a large majority, 98.35%, to delist from the LSE.

Dunelm lost 2.6%.

The Leicester, England-based homeware retailer said revenue rose 4.5% to GBP872.5 million in the six months to December 30, from GBP835.0 million a year prior. Pretax profit was up 4.8% to GBP123.0 million from GBP117.4 million over the same period.

Dunelm has declared an interim dividend of 16p per share, ahead of last year's 15p dividend. Further, the company declared a special dividend of 35p, down 13% from 40p a year prior.

Amongst London's small-caps, Bloomsbury Publishing shares rose 6.6%. It expects annual results to be "significantly ahead of upgraded market expectations".

The publisher noted that consensus for the year ending February 29 stands at GBP291.4 million for revenue, and GBP37.2 million for pretax profit before "highlighted items". It would represent growth of 10% for revenue and 20% for profit.

"Bloomsbury's latest trading update shows a business enjoying strong momentum. Covid lockdowns rekindled people's love of reading and unlike many other past times, this one seems to have stayed popular as the pandemic is confined to the rear-view mirror," AJ Bell's Mould said.

Brent oil was quoted at USD82.63 a barrel at the London equities close Wednesday, down from USD82.93 late Tuesday. Gold was quoted at USD1,988.99 an ounce at the London equities close Wednesday, lower against USD1,995.88 at the close on Tuesday.

In Thursday's UK corporate calendar, there are full year results from Centrica and Relx. There are also half year results from MJ Gleeson and South32.

The economic calendar for Thursday has a gross domestic product reading from the UK at 0700 GMT, as well as industrial production and trade balance readings.

Across the Atlantic, there is the weekly initial jobless claims report.

By Sophie Rose, Alliance News senior reporter

Comments and questions to newsroom@alliancenews.com

Copyright 2024 Alliance News Ltd. All Rights Reserved.

Related Shares

More News
14 Feb 2024 12:02

LONDON MARKET MIDDAY: FTSE 100 outperforms as UK inflation undershoots

(Alliance News) - Stock prices in London were higher on Wednesday afternoon, taking confidence from a more favourable than expected UK inflation readi...

14 Feb 2024 10:13

SMALL-CAP WINNERS & LOSERS: Bloomsbury Publishing jumps to record high

(Alliance News) - The following stocks are the leading risers and fallers among London Main Market small-caps on Wednesday.

14 Feb 2024 09:42

Bloomsbury Publishing profit to top forecasts on fantasy novel demand

(Alliance News) - Shares in Bloomsbury Publishing PLC rose on Wednesday, after the company hailed an "exceptionally strong" period of trading on surgi...

14 Feb 2024 08:39

LONDON MARKET OPEN: Stocks up on tamer than forecast UK inflation data

(Alliance News) - London's FTSE 100 opened higher on Wednesday, with a favourable UK inflation reading given equities a much-needed shot in the arm, a...

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.