London open: Stocks edge lower amid Covid worries; inflation in focus

Sharecast
Opening Market Report
07:19, 18th November 2020

(Sharecast News) - London stocks edged lower in early trade on Wednesday as investors digested the latest UK inflation figures, with worries about rising coronavirus cases and tighter restrictions continuing to weigh on sentiment.
At 0845 GMT, the FTSE 100 was down 0.5% at 6,335.93.

Data released earlier by the Office for National Statistics showed inflation edged higher in October as the price of clothing rose.

Consumer price inflation rose to 0.7% in October from 0.5% in September. Economists had been expecting 0.6% growth. Meanwhile, core inflation increased to 1.5% from 1.3%, versus expectations for no change.

The largest upward contribution came from clothing and footwear, the ONS said. Clothing prices rose by 2.8% between September and October, mostly due to a rise in the price of womenswear, compared with a 0.9% increase between the same two months a year ago.

Meanwhile, food prices increased 0.1% compared with a 0.6% decline between the same two months a year ago, with the move higher driven mainly by vegetables and fruit.

Jonathan Athow, deputy national statistician for Economic Statistics, said: "The rate of inflation increased slightly as clothing prices grew, returning to their normal seasonal pattern after the disruption this year.

"The cost of food also nudged up, while second-hand cars and computer games also all saw price rises. These were partially offset by falls in the cost of energy and holidays."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said consumer price inflation looks set to hover close to 0.7% until April, when the energy component will no longer depress the headline rate and some restaurants, hotels and leisure providers will raise prices in response to the return of VAT to its usual 20% rate.

In equity markets, investment platform Hargreaves Lansdown was the worst performer on the FTSE 100 after an offering of 6.7m shares by co-founder Stephen Lansdown was priced at 1,535p each, which is a 5% discount to the closing share price on Tuesday. According to terms seen by Bloomberg, the stake was offered by PHL Limited, an entity controlled by Stephen Lansdown.

British Land lost ground as it posted a decline in underlying half-year profit as the value of its retail assets fell by nearly 15%. The company also warned that due to concerns about Brexit and Covid-19, office leasing volumes will be lower as customers defer long-term decisions.

Spirax-Sarco Engineering was weaker despite backing its full-year expectations and reporting an improvement in third-quarter trading.

On the upside, RSA Insurance rallied after agreeing to be bought for £7.2bn by a consortium comprising Intact Corp of Canada and Denmark's Tryg A/S.

Energy supplier SSE was also up as it reported a fall in adjusted operating profit after taking a £115m hit from the coronavirus pandemic, but maintained its interim dividend payout.

Micro Focus gained after a well-received trading update, while Virgin Money was boosted by a double-upgrade to 'overweight' at Barclays.

Market Movers

FTSE 100 (UKX) 6,335.93 -0.46%
FTSE 250 (MCX) 19,475.32 -0.21%
techMARK (TASX) 3,935.96 -0.33%

FTSE 100 - Risers

RSA Insurance Group (RSA) 671.60p 3.80%
SSE (SSE) 1,365.50p 1.30%
HSBC Holdings (HSBA) 380.85p 1.13%
Sage Group (SGE) 679.80p 0.77%
Antofagasta (ANTO) 1,115.00p 0.77%
Flutter Entertainment (FLTR) 12,830.00p 0.63%
Croda International (CRDA) 6,120.00p 0.59%
Glencore (GLEN) 193.82p 0.58%
Ocado Group (OCDO) 2,246.00p 0.45%
Scottish Mortgage Inv Trust (SMT) 1,011.00p 0.40%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 1,547.00p -4.24%
British Land Company (BLND) 489.70p -4.17%
Spirax-Sarco Engineering (SPX) 11,520.00p -3.32%
BAE Systems (BA.) 481.00p -2.87%
Compass Group (CPG) 1,352.00p -2.77%
Informa (INF) 570.00p -1.83%
Melrose Industries (MRO) 161.15p -1.77%
Coca-Cola HBC AG (CDI) (CCH) 2,239.00p -1.58%
Land Securities Group (LAND) 706.30p -1.52%
Whitbread (WTB) 3,050.00p -1.52%

FTSE 250 - Risers

Micro Focus International (MCRO) 308.80p 13.65%
Serco Group (SRP) 117.20p 2.99%
Rathbone Brothers (RAT) 1,592.00p 2.84%
Virgin Money UK (VMUK) 145.10p 2.40%
St. Modwen Properties (SMP) 395.00p 2.20%
Syncona Limited NPV (SYNC) 268.50p 2.09%
Ferrexpo (FXPO) 198.00p 1.90%
Energean (ENOG) 697.70p 1.85%
Telecom Plus (TEP) 1,448.00p 1.83%
BB Healthcare Trust (Red) (BBH) 176.00p 1.73%

FTSE 250 - Fallers

Chemring Group (CHG) 251.00p -5.28%
Watches of Switzerland Group (WOSG) 455.00p -4.11%
Shaftesbury (SHB) 544.00p -3.72%
Biffa (BIFF) 225.00p -2.60%
Spirent Communications (SPT) 254.00p -2.50%
Balfour Beatty (BBY) 252.80p -2.39%
SSP Group (SSPG) 337.60p -2.37%
Grainger (GRI) 290.40p -2.22%
easyJet (EZJ) 746.60p -2.10%
Avon Rubber (AVON) 4,200.00p -2.10%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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