London open: FTSE gains on positive US cues; inflation hits fresh 40-year high

(Sharecast News) - London stocks rose in early trade on Wednesday, taking their cue from a positive session on Wall Street, as investors mulled the latest UK inflation figures. At 0825 BST, the FTSE 100 was up 0.6% at 7,340.13.

Sentiment was lifted following a Reuters report that Russian gas flows via the Nord Stream 1 pipeline were expected to restart on time on Thursday after the completion of scheduled maintenance, easing concerns about supply.

On home shores, data out earlier from the Office for National Statistics showed that consumer price inflation hit a fresh 40-year high of 9.4% in June as the cost-of-living crisis intensified. This was up from 9.1% in May and above consensus expectations of 9.3%.

Food and fuel prices drove the increase. The ONS said that food and non-alcoholic drinks rose by 9.8% in the year to June, up from 8.7% in May and the highest since March 2009, while petrol and diesel prices surged 42.3%, the highest rate since before the start of the historical series in January 1989. Transport costs overall were 15.2% higher.

Laura Suter, head of personal finance at AJ Bell, said: "Another larger-than-expected increase in inflation is turning up the heat on the UK's economy - and on the spending power of the nation. It could also be the signal for the Bank of England to hike rates by 0.5% next month, less than 24 hours after the Governor, Andrew Bailey, said he was prepared to take stronger action.

"It's the same story as previous months: petrol, home energy bills, food prices and mortgage costs are all pushing up the inflation rate as they keep on heading upwards. This highlights the Bank's conundrum, as one of the biggest contributors to inflation at the moment is mortgage costs, which are a direct result of the rate setters increasing Base Rate significantly since December."

In equity markets, WPP was the standout performer on the FTSE 100 following well-received second-quarter results from US media and marketing group Omnicom.

Royal Mail was under the cosh, however, as it said that revenues fell 11.5% year-on-year in the first quarter, reflecting weakening retail trends, lower test kit volumes and a return to a structural decline in letters.

Market Movers

FTSE 100 (UKX) 7,340.13 0.60% FTSE 250 (MCX) 19,334.15 0.27% techMARK (TASX) 4,351.64 0.13%

FTSE 100 - Risers

WPP (WPP) 860.20p 2.99% Sage Group (SGE) 690.60p 2.10% BP (BP.) 393.05p 1.93% Ocado Group (OCDO) 768.80p 1.85% Smith & Nephew (SN.) 1,192.00p 1.79% Scottish Mortgage Inv Trust (SMT) 814.00p 1.75% Ashtead Group (AHT) 4,007.00p 1.73% JD Sports Fashion (JD.) 139.70p 1.60% Rio Tinto (RIO) 4,782.00p 1.58% Melrose Industries (MRO) 168.40p 1.54%

FTSE 100 - Fallers

BAE Systems (BA.) 803.40p -0.96% Reckitt Benckiser Group (RKT) 6,376.00p -0.75% Dechra Pharmaceuticals (DPH) 3,700.00p -0.59% Schroders (SDR) 2,742.00p -0.58% Centrica (CNA) 88.14p -0.50% GSK (GSK) 1,775.80p -0.43% Aveva Group (AVV) 2,242.00p -0.09% Persimmon (PSN) 1,810.50p -0.06% National Grid (NG.) 1,106.50p -0.05% Rentokil Initial (RTO) 513.60p -0.04%

FTSE 250 - Risers

Polymetal International (POLY) 270.00p 14.84% Edinburgh Worldwide Inv Trust (EWI) 188.00p 2.62% Aston Martin Lagonda Global Holdings (AML) 532.60p 2.58% Molten Ventures (GROW) 436.60p 2.30% Darktrace (DARK) 358.30p 1.93% Volution Group (FAN) 356.50p 1.86% NCC Group (NCC) 200.00p 1.83% Smithson Investment Trust (SSON) 1,292.00p 1.81% Bridgepoint Group (Reg S) (BPT) 229.40p 1.77% Helios Towers (HTWS) 131.40p 1.70%

FTSE 250 - Fallers

XP Power Ltd. (DI) (XPP) 2,730.00p -7.46% Jupiter Fund Management (JUP) 139.50p -3.39% Moonpig Group (MOON) 196.60p -3.15% Hochschild Mining (HOC) 76.45p -2.98% Abrdn Private Equity Opportunities Trust (APEO) 426.00p -2.74% BlackRock Smaller Companies Trust (BRSC) 1,310.00p -2.53% Micro Focus International (MCRO) 282.70p -2.18% Chrysalis Investments Limited NPV (CHRY) 94.00p -1.88% Royal Mail (RMG) 279.90p -1.79% easyJet (EZJ) 386.90p -1.70%