London midday: FTSE a little firmer as investors eye Fed

(Sharecast News) - London stocks were still in the black by midday on Wednesday, but gains were unspectacular as investors eyed a rate announcement from the US Federal Reserve. The FTSE 100 was up 0.2% at 7,785.79.

The Fed's rate announcement is due after the close of London markets, at 1900 GMT, while the Bank of England and European Central Bank will make their latest policy announcements on Thursday.

Russ Mould, investment director at AJ Bell, said: "A lot is riding on the Fed dialling back the pace of rate hikes to 25 basis points and there will also be plenty of attention on the surrounding messaging from chair Jerome Powell and his colleagues.

"Helping the market's mood on Tuesday was data that revealed slowing US wage growth, another signal that inflationary pressures have peaked.

"Investors clearly hope we are getting closer to the point at which the Fed pivots away from rate rises and that it does so before too much economic pain has been inflicted."

On home shores, data out earlier showed that shop price inflation hit fresh highs last month as the cost of food soared.

According to the latest BRC-NielsenIQ Shop Price Index, annual shop price inflation was 8% in January, up from 7.3% in December, above the three-month average of 7.5% and a record high.

Within that, non-food jumped 5.1% year-on-year from 4.4% a month earlier, while food surged 13.8%, compared to 13.3% in December. It is the highest inflation rate in the food category on record.

Investors were also mulling a survey showing that activity in the UK's manufacturing sector shrank in January, albeit less than expected, for the sixth month in a row.

The S&P Global/CIPS manufacturing purchasing managers' index rose to 47.0 from a 31-month low of 45.2 in December, coming in above the flash estimate of 46.7 but below the 50.0 mark that separates contraction from expansion.

Output and new orders fell further, with leading to job losses for the fourth successive month. The survey found that weak demand, elevated price inflation, and raw material and staff shortages all impacted production.

Rob Dobson, director at S&P Global Market Intelligence, said: "UK manufacturers faced a tough operating environment at the start of 2023, leading to reducing intakes of new business, declining production volumes and lower staffing levels.

"Weak demand at home and overseas, supply chain constraints, strikes and the continuing impact of high inflation all stymied the performance of manufacturers. Weak economic growth in the US, EMEA and across Asia is also dragging down new export wins, exacerbating the strain already caused by port delays and lingering Brexit complications."

Earlier, the latest figures from Nationwide showed that house prices fell for the fifth month in a row, with annual price growth slowing to 1.1% in January as surging interest rates and inflation continued to hammer mortgage holders.

In equity markets, paper and packaging groups Mondi and Smurfit were the best performers on the top-flight index.

Ladbrokes owner Entain gained after it lifted its full-year earnings expectations as it reported a record fourth quarter for both net gaming revenues and active customers.

ITV rallied after Reuters reported that veteran Hollywood producer Peter Chernin and French TV production company FL Entertainment had expressed interest in the broadcaster's Studios segment.

Halma rose after the safety technology company announced the acquisition of Thermocable for its safety sector fire detection unit, Apollo Fire Detectors, for £22m.

Sainsbury's was in focus again amid takeover speculation, after Bestway lifted its stake in the supermarket chain.

Currys shot to the top of the FTSE 250 after an upgrade to 'buy' from 'hold' at Investec.

Following two days of weakness on the back of a short seller attack, Darktrace traded up as the cyber security firm announced a buyback of up to £75m.

On the downside, telecoms giant Vodafone slumped after it said revenues fell in the third quarter as the economic slowdown hit trading in Continental Europe and offset a good performance in the UK.

GSK reversed earlier gains as the drugs giant said fourth-quarter profits came in ahead of expectations, boosted by strong demand for its blockbuster shingles vaccine.

Market Movers

FTSE 100 (UKX) 7,785.79 0.18% FTSE 250 (MCX) 20,017.48 0.83% techMARK (TASX) 4,457.50 -0.19%

FTSE 100 - Risers

Mondi (MNDI) 1,564.50p 2.72% Smurfit Kappa Group (CDI) (SKG) 3,481.00p 2.62% Johnson Matthey (JMAT) 2,304.00p 2.13% Ocado Group (OCDO) 659.20p 2.04% Entain (ENT) 1,517.00p 1.91% Smiths Group (SMIN) 1,758.00p 1.80% Melrose Industries (MRO) 144.70p 1.76% Smith (DS) (SMDS) 359.30p 1.64% CRH (CDI) (CRH) 3,815.00p 1.64% Flutter Entertainment (CDI) (FLTR) 12,755.00p 1.63%

FTSE 100 - Fallers

Fresnillo (FRES) 800.00p -2.61% Vodafone Group (VOD) 90.93p -2.35% Anglo American (AAL) 3,405.00p -1.77% Burberry Group (BRBY) 2,431.00p -1.22% Rio Tinto (RIO) 6,252.00p -1.06% GSK (GSK) 1,408.80p -1.03% Haleon (HLN) 321.10p -0.97% Reckitt Benckiser Group (RKT) 5,718.00p -0.90% Aviva (AV.) 451.80p -0.86% Abrdn (ABDN) 211.00p -0.75%

FTSE 250 - Risers

Currys (CURY) 69.65p 7.57% Network International Holdings (NETW) 279.80p 6.07% Darktrace (DARK) 219.90p 4.61% Marks & Spencer Group (MKS) 150.35p 3.12% Moonpig Group (MOON) 124.20p 3.07% Volution Group (FAN) 388.50p 3.05% Wetherspoon (J.D.) (JDW) 468.00p 3.04% ITV (ITV) 83.20p 2.87% Chemring Group (CHG) 290.00p 2.84% Dr. Martens (DOCS) 159.60p 2.84%

FTSE 250 - Fallers

UK Commercial Property Reit Limited (UKCM) 55.10p -4.67% TI Fluid Systems (TIFS) 114.00p -4.20% QinetiQ Group (QQ.) 353.60p -2.54% Lancashire Holdings Limited (LRE) 614.00p -1.76% Elementis (ELM) 123.20p -1.60% Syncona Limited NPV (SYNC) 173.00p -1.37% CMC Markets (CMCX) 239.00p -1.24% 888 Holdings (DI) (888) 71.10p -1.18% Redde Northgate (REDD) 429.00p -1.15% Centamin (DI) (CEY) 109.85p -1.08%