London close: Stocks manage gains at end of muted day

(Sharecast News) - London stock markets presented a muted picture at the close of trading on Tuesday, following an early surge influenced by optimism about Chinese economic growth, which subsequently lost momentum. The FTSE 100 ended the session up 0.11% at 7,461.46, while the more domestically-focused FTSE 250 ended the day ahead 0.45% at 18,054.84.

On the currency front, the sterling was last 0.27% stronger on the dollar to trade at $1.2747, while it weakened by the same margin against the common currency to change hands at €1.1625.

"Better-than-expected Canadian CPI and solid US durable goods orders, although helping US indices stabilise, couldn't do the same for most of their European counterparts which ended the day yet again in the red," said IG senior market analyst Axel Rudolph.

"The slow decline in equities seen since last week's highs is happening while volatility as measured by the CBOE VIX is tumbling back towards pre-Covid-19 levels, indicating that investors aren't at all worried about the slide."

Deceleration noted in UK shop price inflation

In economic news, a slowdown in UK shop price inflation was seen in June, according to fresh data from the British Retail Consortium and NielsenIQ.

The inflation rate for shop prices registered a dip to 8.4% in June, from the 9.0% recorded in May.

Food prices - a significant driver of shop price inflation - also exhibited a deceleration, as the food inflation rate eased from May's 15.4% to 14.6% in June.

The figure marked the second consecutive month of slowing inflation in the food category, and positioned the rate beneath the three-month average of 15.2%.

Analysing further within the food category, fresh food inflation slowed down considerably in June to 15.7%, a reduction from May's 17.2%.

Ambient food inflation, which pertains to non-perishable items, showed a slight easing, coming in at 13.0% in June as compared to the previous month's 13.1%.

The non-food category was not left behind in the downward trend, with price rises there easing to 5.4% in June, down from 5.8% in May.

"Households up and down the country will welcome the easing of shop price inflation in June," said BRC chief executive Helen Dickinson.

"Food inflation slowed for the second consecutive month, particularly for fresh products, as retailers cut the price of many staples including milk, cheese and eggs.

"Clothing and electrical goods also saw falling prices, helping customers to pick up a bargain ahead of the summer holidays."

Dickinson said that if the current situation continued, food inflation should drop to single digits later in the year.

"However, it is imperative that government does not hamper this progress by introducing costly new policies."

Asia-facing plays win on mixed day for stocks

On London's equity markets, Asia-focussed firms Prudential and Standard Chartered both experienced a rally, closing up 1.95% and 2.1%, respectively.

Events and publishing company Informa ended the day ahead 1.8%, having received a boost following Berenberg's decision to re-initiate coverage of the company with a 'buy' rating.

Telecom Plus, which trades as Utility Warehouse, enjoyed a surge of 8.74% after it celebrated record full-year profits, revenue, and customer growth, and announced an increase in its dividend.

On the downside, JD Sports Fashion fell 2.73% after it warned of a softening in its North American markets, and a general slowdown in May.

Despite the dip in share price, the sportswear retailer maintained its annual guidance.

Imperial Leather maker PZ Cussons tumbled 6.74% after it warned that the recent devaluation of the Nigerian naira would impact its bottom line, despite projecting higher annual sales and profits.

Finally, BT Group fell 3.64% due to a downgrade by UBS from 'neutral' to 'sell'.

UBS indicated that it expected BT's dividend to be halved amid pressures on the company's free cash flow.

"We think the market has underestimated the impact of rising interest rates and accounting changes at BT Sport that impacts free cash flow," the bank said.

"Without a dividend cut, BT Group will have to borrow more than £900m per annum over the next three years.

"Borrowing to fund both the dividend and pension deficit payments when the cost of debt is rising presents risks and we assume a halving of the dividend to 3.85p, from 7.7p."

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,461.46 0.11% FTSE 250 (MCX) 18,054.84 0.45% techMARK (TASX) 4,431.00 -0.35%

FTSE 100 - Risers

Ocado Group (OCDO) 557.80p 5.13% Vodafone Group (VOD) 72.65p 3.70% International Consolidated Airlines Group SA (CDI) (IAG) 161.15p 2.61% Standard Chartered (STAN) 671.00p 1.98% Informa (INF) 713.20p 1.83% Compass Group (CPG) 2,208.00p 1.70% Next (NXT) 6,810.00p 1.55% Prudential (PRU) 1,093.00p 1.53% Rightmove (RMV) 509.40p 1.51% Kingfisher (KGF) 229.00p 1.51%

FTSE 100 - Fallers

BT Group (BT.A) 123.00p -3.64% JD Sports Fashion (JD.) 142.60p -2.73% Croda International (CRDA) 5,456.00p -2.22% Persimmon (PSN) 1,045.00p -1.60% BP (BP.) 452.70p -1.37% Coca-Cola HBC AG (CDI) (CCH) 2,291.00p -1.25% Convatec Group (CTEC) 207.00p -1.24% GSK (GSK) 1,402.20p -1.24% Fresnillo (FRES) 604.80p -1.11% Halma (HLMA) 2,231.00p -1.06%

FTSE 250 - Risers

Carnival (CCL) 1,080.50p 10.84% Telecom Plus (TEP) 1,642.00p 8.74% Molten Ventures (GROW) 248.60p 6.97% HICL Infrastructure (HICL) 129.40p 5.72% Tritax Eurobox (GBP) (EBOX) 53.50p 5.31% Lancashire Holdings Limited (LRE) 570.00p 5.17% Trainline (TRN) 240.00p 5.08% International Public Partnerships Ltd. (INPP) 127.40p 4.77% BBGI Global Infrastructure S.A. NPV (DI) (BBGI) 132.80p 4.73% CMC Markets (CMCX) 155.60p 3.32%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 329.20p -9.16% PZ Cussons (PZC) 163.20p -6.74% Darktrace (DARK) 307.50p -4.98% 4Imprint Group (FOUR) 4,765.00p -3.54% Capita (CPI) 27.14p -2.79% Harbour Energy (HBR) 219.00p -2.75% Energean (ENOG) 1,002.00p -2.53% Genus (GNS) 2,134.00p -2.20% Hikma Pharmaceuticals (HIK) 1,783.00p -1.82% Ithaca Energy (ITH) 147.00p -1.74%