London midday: Stocks extend gains ahead of US inflation print

(Sharecast News) - London stocks had extended gains by midday on Wednesday, with caterer Compass pacing the advance after well-received results, as investors eyed the latest US inflation reading. The FTSE 100 was up 1.1% at 7,325.65.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "The market has taken the lead from the US, where the S&P 500 and Nasdaq both produced a positive end to the day's trading sessions. This is especially welcome news given the tech-heavy Nasdaq's battering over recent months.

"Less positive notes are being heard in China, where the annual inflation rate has accelerated to 2.1%, up from 1.5% in March. This is the highest level since November and is directly related to the logistic and supply disruption amid the country's strict Covid curbs.

"More stark is the increase in producer prices, which rose 8% year-on-year. The wider repercussions of this depends on how much longer zero-Covid policies remain, and there have been signs these are going to temper."

On the macro front, investors were looking ahead to US inflation figures later in the day.

Victoria Scholar, head of investment at Interactive Investor, said the data "will be front-and-centre for markets amid concerns that rising price levels could push the world's largest economy into recession".

"Price levels accelerated to 8.5% in March, the highest since December 1981, topping expectations while US GDP unexpectedly contracted in the first quarter dropping 1.4% on an annualised basis. The inflation data will also provide some insight into whether the Fed needs to act more aggressively by accelerating its rate hiking path.

"While the data is expected to ease to 8.1%, stronger-than-expected inflation figures could put pressure on equities and lift the dollar if the market thinks a 75-basis point hike at one meeting is back on the table."

In equity markets, Compass surged to the top of the FTSE 100 after the catering group posted a jump in first-half operating profit, lifted its revenue guidance and announced the launch of a £500m share buyback as it hailed strong growth across all sectors.

HomeServe shares shot higher following a report that Brookfield Asset Management is nearing a takeover of the household repairs provider. According to Bloomberg, the deal is set to value HomeServe at about $5bn and would be one of the UK's largest take-private transactions this year.

CLS Holdings was higher after it updated its dividend policy and said it continues to trade in line with market expectations.

Elsewhere, Ashtead was boosted by an upgrade to 'outperform' at RBC Capital Markets, while Watches of Switzerland rose after an upgrade to 'buy' at Goldman Sachs.

Holiday giant Tui edged up after saying it was confident bookings for this summer would be close to 2019 pre-Covid pandemic levels after first-half losses were more than halved.

Broadcaster ITV was firmer after it reported "strong" first-quarter revenues, driven by a "robust" operational and financial performance throughout the period.

On the downside, telecommunications and mobile money services company Airtel Africa was weaker after its fourth-quarter numbers missed expectations.

Landscaping products supplier Marshalls fell despite reporting higher revenue in the first four months of the year against strong comparators in 2021 as people took on home improvement projects during Covid pandemic lockdowns.

Market Movers

FTSE 100 (UKX) 7,325.65 1.14% FTSE 250 (MCX) 19,647.68 1.36% techMARK (TASX) 4,247.33 0.21%

FTSE 100 - Risers

Compass Group (CPG) 1,704.00p 8.02% Prudential (PRU) 922.40p 4.46% Burberry Group (BRBY) 1,538.50p 3.81% Rio Tinto (RIO) 5,352.00p 3.66% International Consolidated Airlines Group SA (CDI) (IAG) 127.20p 3.40% Whitbread (WTB) 2,613.00p 3.32% Glencore (GLEN) 469.85p 3.15% Rightmove (RMV) 550.00p 3.11% Pershing Square Holdings Ltd NPV (PSH) 2,545.00p 3.04% InterContinental Hotels Group (IHG) 4,937.00p 3.03%

FTSE 100 - Fallers

Airtel Africa (AAF) 131.00p -6.56% Bunzl (BNZL) 2,907.00p -2.06% Ocado Group (OCDO) 776.80p -1.84% Rentokil Initial (RTO) 504.00p -1.33% Tesco (TSCO) 273.70p -1.26% AstraZeneca (AZN) 10,140.00p -1.03% Smurfit Kappa Group (CDI) (SKG) 3,260.00p -0.85% Endeavour Mining (EDV) 1,902.00p -0.68% BAE Systems (BA.) 741.20p -0.62% Admiral Group (ADM) 2,265.00p -0.61%

FTSE 250 - Risers

Homeserve (HSV) 1,106.00p 13.55% CLS Holdings (CLI) 207.00p 7.59% Watches of Switzerland Group (WOSG) 911.00p 6.30% PureTech Health (PRTC) 174.60p 6.08% SSP Group (SSPG) 220.20p 5.97% Trainline (TRN) 299.80p 5.45% Ferrexpo (FXPO) 147.70p 5.42% TI Fluid Systems (TIFS) 167.40p 4.62% TUI AG Reg Shs (DI) (TUI) 226.90p 4.51% Tullow Oil (TLW) 52.70p 4.46%

FTSE 250 - Fallers

Marshalls (MSLH) 534.00p -9.34% LXI Reit (LXI) 136.40p -4.08% Vivo Energy (VVO) 147.00p -1.34% UK Commercial Property Reit Limited (UKCM) 85.60p -1.04% Polymetal International (POLY) 257.40p -1.00% NCC Group (NCC) 200.50p -0.99% Trustpilot Group (TRST) 104.00p -0.95% Renishaw (RSW) 4,018.00p -0.89% Cranswick (CWK) 3,018.00p -0.85% Virgin Money UK (VMUK) 147.10p -0.74%