(Alliance News) - Stock prices in London rose sharply at Wednesday's open, with official figures showing signs that runaway UK inflation might be easing.
The FTSE 100 index opened up 88.26 points, 1.2%, at 7,541.95. The FTSE 250 was up 460.88 points, 2.4%, at 19,079.10, and the AIM All-Share was 4.52 points, 0.6%, at 758.88.
The Cboe UK 100 was up 1.2% at 752.36, the Cboe UK 250 was up 2.4% at 16,745.20, and the Cboe Small Companies was up 0.5% at 13,545.44.
In European equities on Wednesday, the CAC 40 in Paris was up 0.8%, while the DAX 40 in Frankfurt was up 0.5%.
Inflation in the UK cooled more quickly than expected in June, figures from the Office for National Statistics showed on Wednesday.
Annually, consumer prices rose by 7.9% in June, cooling from an 8.7% jump in May. June's reading was lower than market forecasts of 8.2%, as cited by FXStreet.
Whilst still elevated by historical standards, June's inflation rate was the lowest since March 2022.
"While one swallow doesn't make a summer, there will be real hopes that this marks a turning point for UK inflation," said Nicholas Hyett, investment manager at Wealth Club.
The annual fall was led by easing price rises for motor fuels, as well as food and non-alcoholic beverages, furniture and household goods, and restaurants and hotels, the ONS said.
The crucial figure of core inflation - which excludes energy, food, alcohol, and tobacco - unexpectedly cooled to an annual rate of 6.9%. It had been expected to remain unchanged from May's reading of 7.1%.
"In normal circumstances, this could signal an easing monetary policy from the Bank of England with inflation moving in the right direction, but with the 2% target in mind, this latest release represents victory in one battle, but not the war," said interactive investor's Richard Hunter.
"Even so, the subsequent weakness in sterling provided the premier index with an early boost given its majority exposure to overseas earnings, with the FTSE 100 clawing its way back into positive territory for the year," he added.
Sterling was quoted at USD1.2953 early Wednesday, lower than USD1.3083 at the London equities close on Tuesday.
The euro traded at USD1.1233, slightly lower than USD1.1237. Against the yen, the dollar was quoted at JPY139.27, up versus JPY138.76.
With markets rushing to price in a lower peak for interest rates, the outlook for the mortgage sector improved. Housebuilding stocks rallied in early trade, with Persimmon, Barratt, Taylor Wimpey, up 7.3%, 6.5%, and 6.6% respectively.
Other stocks in the property sector also made gains, with real estate platform Rightmove up 3.5%, and St James's Place up 3.4%.
Segro rose 7.0%, as Exane BNP raised the commercial real estate firm's stock to 'outperform'.
However, the good feeling wasn't universal across the sector. On AIM, Watkin Jones shares plunged 35%.
The London-based developer and manager of rental properties said its Chief Executive Richard Simpson has stepped down. The firm's Chief Investment Officer Alex Pease will take on the role of CEO on an interim basis.
Further, Watkin Jones said it expects an impairment charge of some GBP10 million, after reassessing the carrying value of certain assets. It also expects to increase its provision for remedial works for legacy properties by a further GBP30 million to GBP35 million.
Meanwhile, Hargreaves Lansdown rose 5.7%, as the retail investment platform reported strong new business wins. In the company's fourth quarter ended June 30, net new business rose 6% to GBP1.7 billion from the previous quarter. Assets under administration climbed 1.5% over the quarter to GBP134.0 billion at the end of June.
In London's small-caps, Restaurant Group rose 10%, reporting a recent climb in sales, despite lower footfall in May and June amid hot weather.
In the two weeks to July 16, which forms part of TRG's third-quarter, like-for-like sales at Wagamama surged 21% on-year. Growth accelerated from 5% in the second quarter to July 2, and 2% in the first quarter, which ran to April 2.
Meanwhile, in the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.1%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.8%.
Sentiment had been boosted by better-than-expected earnings from Bank of America and Morgan Stanley, despite slightly weak US retail sales and industrial production figures for June.
"The current reporting season is off to a strong start, albeit against low expectations, pointing to an economy which has yet to suffer from the rising interest rate environment," ii's Hunter said.
Later on Wednesday, there will be results from Goldman Sachs, IBM, Netflix and Tesla.
Gold was quoted at USD1,980.76 an ounce early Wednesday, down from USD1,982.17 on Tuesday. Brent oil was trading at USD79.63 a barrel, lower than USD79.67.
Trading was mixed in Asia on Wednesday, the Nikkei 225 index in Tokyo closed up 1.2%. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney closed up 0.6%.
Still to come on Wednesday's economic calendar, there are final EU inflation figures for June at 1000 BST.
By Elizabeth Winter, Alliance News senior markets reporter
Comments and questions to newsroom@alliancenews.com
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Persimmon (PSN)
Barratt Developments (BDEV)
Taylor Wimpey (TW.)
Segro (SGRO)
Rightmove (RMV)
St James's Place (STJ)
Watkin Jones (WJG)
Hargreaves Lansdown (HL.)