London midday: Stocks tread water ahead of US inflation data

(Sharecast News) - London stocks had pared earlier small losses to trade flat by midday on Tuesday as investors mulled a slightly weaker-than-expected UK GDP reading and looked ahead to the release of US inflation data.
The FTSE 100 was steady at 6,886.42.

Spreadex analyst Connor Campbell said: "It was an exceedingly quiet start to trading - perhaps because Tuesday afternoon sees the latest US inflation reading.

"Yesterday's bond auction proved to be something of a non-event, failing to cause any truly noticeable movement. That's the first obstacle, then, cleared for the Dow Jones et al.

"Next up is this afternoon's CPI data. Analysts are expecting the standard figure to rise from 0.4% to 0.5% month-on-month, with the core reading up from 0.1% to 0.2%. Anything higher than those estimates will likely set alarm bells ringing; anything lower will act as reassurance about the pace of building inflationary pressures.

"Since the entire market has been caught up in the inflation/interest rates/bond yield fears that have intermittently taken hold this year, Tuesday's inflation figures are almost as relevant for Europe as they are for the US."

On home shores, figures released earlier by the Office for National Statistics showed the economy returned to growth in February despite Covid-19 restrictions.

The economy grew 0.4% following a 2.2% decline in January, and versus expectations of 0.6% growth. January's figure was revised up from a previous estimate of a 2.9% drop. Still, GDP remained 7.8% below the levels seen in February 2020 - before the pandemic hit - compared with 3.1% below the initial recovery peak in October 2020.

An ONS spokesperson said: "The economy showed some improvement in February after the large falls seen at the start of the year but remains around 8% below its pre-pandemic level.

"Wholesalers and retailers both saw sales pick up a little, while manufacturing improved with car producers experiencing a partial recovery from a poor January.

"Construction grew strongly after revised figures showed they had struggled in the last couple of months.

"Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels. However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade."

In equity markets, Just Eat Takeaway rallied after it said first-quarter orders rose 79%.

JD Sports Fashion advanced as it missed annual profits expectations despite more people buying sports and casualwear during the pandemic lockdown, but reinstated dividend payments and forecast higher earnings for the current year.

Babcock surged as it cautioned investors to expect impairments and charges worth £1.7bn for the full year ending 31 March, but said it is aiming to avoid an equity raise.

XP Power gained ground as it reported a 16% jump in first-quarter revenue and said it was recommending a dividend of 18p a share.

Hays pushed higher after the recruiter said full-year operating profit is set to beat market expectations of around £61m and be at least £85m, given improving fees and good underlying cost management, and assuming a continuation of current market conditions.

Market Movers

FTSE 100 (UKX) 6,886.42 -0.04%
FTSE 250 (MCX) 22,190.17 0.17%
techMARK (TASX) 4,283.72 -0.13%

FTSE 100 - Risers

Just Eat Takeaway.Com N.V. (CDI) (JET) 7,576.00p 3.02%
JD Sports Fashion (JD.) 938.80p 2.76%
B&M European Value Retail S.A. (DI) (BME) 548.40p 2.39%
Kingfisher (KGF) 341.80p 2.12%
Auto Trader Group (AUTO) 582.40p 2.07%
Weir Group (WEIR) 1,880.50p 2.01%
Entain (ENT) 1,604.00p 1.97%
Evraz (EVR) 606.20p 1.85%
Burberry Group (BRBY) 2,087.00p 1.71%
Rightmove (RMV) 610.00p 1.57%

FTSE 100 - Fallers

United Utilities Group (UU.) 957.00p -1.30%
Severn Trent (SVT) 2,404.00p -1.15%
British American Tobacco (BATS) 2,758.50p -1.08%
SSE (SSE) 1,517.00p -1.04%
BAE Systems (BA.) 500.00p -0.99%
Rentokil Initial (RTO) 508.20p -0.94%
National Grid (NG.) 891.40p -0.89%
InterContinental Hotels Group (IHG) 5,080.00p -0.86%
Experian (EXPN) 2,627.00p -0.79%
Diageo (DGE) 3,137.00p -0.79%

FTSE 250 - Risers

Babcock International Group (BAB) 320.00p 32.23%
XP Power Ltd. (DI) (XPP) 5,170.00p 7.93%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,576.00p 3.02%
TBC Bank Group (TBCG) 1,130.00p 2.91%
TI Fluid Systems (TIFS) 304.50p 2.70%
Marks & Spencer Group (MKS) 158.95p 2.65%
WH Smith (SMWH) 1,855.00p 2.34%
National Express Group (NEX) 312.80p 2.29%
Redrow (RDW) 672.20p 2.25%
Hays (HAS) 163.20p 2.19%

FTSE 250 - Fallers

ICG Enterprise Trust (ICGT) 1,030.00p -2.65%
Watches of Switzerland Group (WOSG) 710.00p -2.47%
Sanne Group (SNN) 643.00p -2.43%
PureTech Health (PRTC) 405.00p -2.41%
SSP Group (SSPG) 317.00p -2.40%
CMC Markets (CMCX) 516.00p -2.27%
Ashmore Group (ASHM) 396.40p -2.08%
Kaz Minerals (KAZ) 848.80p -2.01%
Jupiter Fund Management (JUP) 290.80p -1.89%
Centamin (DI) (CEY) 106.75p -1.84%