(Alliance News) - Stocks early Wednesday continued the week's hesitant trade as investors eye a key US inflation print for May, though they will need to wait another day for this.
The FTSE 100 index was down 25.20 points, or 0.4%, at 7,069.89 early Wednesday. The mid-cap FTSE 250 index was down 21.39 points, or 0.1%, at 22,874.11. The AIM All-Share index was down 0.4% at 1,253.02.
The Cboe UK 100 index was down 0.5% at 704.35. The Cboe 250 was down 0.2% at 20,629.57 and the Cboe Small Companies down 0.1% at 15,210.98.
In mainland Europe, the CAC 40 in Paris was up 0.1%, while the DAX 30 in Frankfurt dipped 0.1% early Wednesday.
"Markets remain in a holding pattern ahead of the next economic release, which could serve to reignite the inflation debate," said Richard Hunter, head of markets at Interactive Investor.
"Tomorrow's consumer price index reading in the US is expected to reveal that the total annual inflation rate rose to 4.7% and core inflation to 3.4%, above the Federal Reserve's target of 2%," said Hunter. "Certainly, any numbers above these levels would draw comment from the Fed, who otherwise fully expect inflationary pressures to diminish over the coming months."
Thursday's US inflation data will follow figures overnight which showed price pressures are gathering in China.
The producer price index, which measures the cost of goods at the factory gate, exceeded expectations to spike 9.0% year-on-year in May, said the National Bureau of Statistics. This marks its highest annual jump since September 2008.
The consumer price index rose less than expected, up 1.3% year-on-year, official data showed. Analysts expect a rise in CPI inflation as producer prices pass through, but believe the rise will be gradual.
In China, the Shanghai Composite closed up 0.3% on Wednesday, while the Hang Seng index in Hong Kong was down 0.1% in late trade.
The Japanese Nikkei 225 index ended down 0.4%. Against the yen, the dollar was soft at JPY109.44 versus JPY109.47.
Sterling was quoted at USD1.4177 early Wednesday, a touch higher than USD1.4147 at the London equities close on Tuesday. The euro traded at USD1.2179, flat on USD1.2181 late Tuesday.
Gold was quoted at USD1,891.55 an ounce early Wednesday, down slightly from USD1,892.50 on Tuesday. Brent oil was trading at USD72.55 a barrel, up from USD71.52 late Tuesday.
On the London Stock Exchange, Smith & Nephew rallied 4.4% after Credit Suisse raised the medical devices manufacturer to Outperform from Neutral.
SSP Group fell 2.1%, as it reported a slump in interim revenue. SSP is an operator of food and beverage outlets in travel locations, and pandemic countermeasures have continued to restrict movement.
Revenue dropped 79% to GBP256.7 million for the half-year ended March 31, with sales severely hit by the pandemic and ensuing reductions in passengers passing through airports and train stations. Like-for-like sales also tumbled 79%.
The firm's pretax loss widened to GBP299.7 million from GBP34.3 million a year ago.
Passenger numbers remained depressed during the first quarter of the financial year and, with infections picking up in key markets alongside the emergence of new variants, second quarter revenue continued at "similarly low levels".
Since the end of March, though, the firm has seen some improvement in trading, driven by the easing of lockdown restrictions in the UK as well as an uptick in passengers numbers in North America.
"Whilst the short-term outlook remains highly uncertain, we remain positive about a further upturn in both domestic and leisure travel across the remainder of the current financial year. We anticipate that the profit conversion on the lower sales, compared with pre-Covid levels, will continue to be in the region of 25% during the second half of the financial year," SSP said.
Shares of Clinigen lost 16% after the pharmaceuticals and services provider guided to a fall in earnings on pandemic disruption to trading.
Covid-19 has hit hospital-based oncology treatments and delayed clinical trials globally, and demand for the company's Proleukin within its current approved indications was "significantly weaker" than expected in recent months.
Proleukin is indicated for the treatment of metastatic melanoma and metastatic renal cell carcinoma.
As a result, net revenue is expected to be in-line with prior guidance and consensus forecasts, but adjusted earnings before interest, taxes, depreciation and amortisation is seen within a range of GBP114 million to GBP117 million. This would be down from the GBP131 million achieved for the 2020 financial year.
"The group believes it is prudent to expect this reduced level of demand for Proleukin to remain until revitalisation efforts into new indications alongside novel cell therapies are successful and normal Hospital and Cancer Centre Services have resumed," it said, adding that it is confident Proleukin demand will return and exceed pre-virus levels in the future.
Clinigen expects double-digit Ebitda growth in the 2022 financial year, it said, and is focused on paying down debt.
The economic events calendar on Wednesday has the Bank of Canada's interest rate decision at 1500 BST.
By Lucy Heming; lucyheming@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
Smith & Nephew (SN.)
SSP Group (SSPG)