London open: Stocks rise as investors mull inflation data

(Sharecast News) - London stocks rose in early trade on Wednesday, recovering from heavy losses in the previous session despite a continued slump in oil prices, as investors mulled the latest UK inflation data.
At 0830 BST, the FTSE 100 was up 0.6% at 5,676.52.

London Capital Group analyst Jasper Lawler said: "After big slides yesterday caused by the turmoil in oil markets, things look a little brighter on Wednesday. European shares are pointed higher. On the face of it, stock markets have held up remarkably well given that we just witnessed oil turn negative."

Lawler said the FTSE was boosted by news of human trials beginning on Thursday for a coronavirus vaccine.

"Oxford University think the vaccine they are developing has an 80% chance of success," he said. "Corporate partnerships will probably be needed for any vaccine. UK pharmaceutical shares might get their own shot in the arm."

Meanwhile, oil prices remained firmly in focus as Brent crude fell below $16 a barrel, hitting the lowest level since 1999.

"Oil futures prices should turn around once demand picks up for the physical product but that looks a couple of months away given the gradual lockdown easing policies afflicting most economies," said Lawler.

Investors were digesting the latest figures from the Office for National Statistics, which showed that UK consumer price inflation fell to 1.5% in March from 1.7% the month before, in line with consensus expectations, as fuel prices declined and clothing sales were dented by the Covid-19 outbreak.

ONS head of inflation Mike Hardie said: "Clothing prices normally rise between February and March as new year discounting ends.

"However, this year the price of clothes has eased due to some retailers offering discounts due to decreased footfall in stores before the lockdown started. The cost of raw materials for manufacturers fell significantly over the year, driven by a global fall in the price for crude oil, which is at its lowest level since early 2016."

Sterling was up 0.3% against the dollar at 1.2323 after the data.

In equity markets, building materials group CRH was the standout gainer after reporting a rise in first-quarter like-for-like sales and announcing a series of cost-cutting measures, including 25% pay cuts for leadership teams and board members.

Housebuilder Bellway gained ground after saying its board of directors would take a temporary 20% pay cut and donate the money to charity.

Hiscox advanced as it said it could pay out $175m in coronavirus-related claims if lockdowns and travel bans were extended beyond August. The insurer added that "a number" of UK policyholders had disputed the application of their policy in relation to business interruption cover after the company estimated the level of economic loss experienced was "likely to be materially lower than reported revenues".

Power generation company Drax surged after saying that that core profit for 2020 should be in line with market expectations despite a potential ?60m hit from the coronavirus pandemic, although the customer business is expected to make a loss.

On the downside, Sage was the worst performer on the FTSE 100 after a downgrade to 'sell' at Goldman Sachs.

Meanwhile, BP, Shell and Premier Oil all gushed lower amid collapsing oil prices.

Beazley was in the red after it revealed $170m (?138m) of Covid-19 claims for the first quarter as the Lloyd's of London insurer said it was reassessing risk and taking steps to strengthen its capital during the crisis.



Market Movers

FTSE 100 (UKX) 5,676.52 0.63%
FTSE 250 (MCX) 15,390.13 -0.06%
techMARK (TASX) 3,458.42 -0.19%

FTSE 100 - Risers

CRH (CRH) 2,234.00p 4.00%
Ashtead Group (AHT) 1,731.50p 3.34%
Legal & General Group (LGEN) 197.95p 2.56%
easyJet (EZJ) 623.00p 2.20%
Smith (DS) (SMDS) 286.00p 2.18%
JD Sports Fashion (JD.) 490.80p 2.14%
Next (NXT) 4,653.00p 1.99%
Antofagasta (ANTO) 744.40p 1.86%
3i Group (III) 729.00p 1.82%
Evraz (EVR) 238.00p 1.80%

FTSE 100 - Fallers

Sage Group (SGE) 604.20p -3.61%
BP (BP.) 288.45p -1.60%
Centrica (CNA) 30.90p -1.47%
Royal Dutch Shell 'B' (RDSB) 1,273.80p -1.10%
DCC (DCC) 5,336.00p -0.97%
Royal Dutch Shell 'A' (RDSA) 1,298.40p -0.89%
BHP Group (BHP) 1,215.40p -0.86%
BAE Systems (BA.) 530.20p -0.82%
International Consolidated Airlines Group SA (CDI) (IAG) 228.10p -0.35%
Johnson Matthey (JMAT) 1,887.00p -0.21%

FTSE 250 - Risers

Senior (SNR) 59.30p 4.04%
FirstGroup (FGP) 60.85p 4.02%
Aston Martin Lagonda Global Holdings (AML) 54.95p 3.68%
IP Group (IPO) 54.00p 3.65%
Cineworld Group (CINE) 55.74p 3.38%
Fisher (James) & Sons (FSJ) 1,358.00p 2.88%
Capita (CPI) 33.00p 2.87%
Virgin Money UK (VMUK) 68.44p 2.86%
Airtel Africa (AAF) 37.00p 2.78%
Dixons Carphone (DC.) 65.90p 2.33%

FTSE 250 - Fallers

Premier Oil (PMO) 19.81p -5.53%
Vivo Energy (VVO) 65.00p -3.99%
Signature Aviation (SIG) 165.15p -3.98%
Greencoat UK Wind (UKW) 132.80p -3.21%
Avon Rubber (AVON) 2,440.00p -3.17%
Beazley (BEZ) 355.60p -2.95%
Energean Oil & Gas (ENOG) 624.00p -2.80%
The Renewables Infrastructure Group Limited (TRIG) 121.80p -2.40%
Sabre Insurance Group (SBRE) 277.50p -2.29%
Royal Mail (RMG) 140.20p -1.99%