London open: FTSE rises amid deluge of retail updates, ahead of US inflation

(Sharecast News) - London stocks rose in early trade on Thursday as investors eyed the latest US inflation data and waded through a deluge of retail updates. At 0845, the FTSE 100 was up 0.5% at 7,766.50.

Oanda market analyst Craig Erlam said the US inflation print has been the main topic of conversation all week.

"The jobs report last Friday changed the dynamic in the markets and ensured that not only was this CPI report going to be important but in all likelihood pivotal ahead of next month's Fed meeting," he said.

"We've gone from inflation declining but the labour market being stubbornly tight to both appearing to sing from the same hymn sheet. Cracks are appearing in the economy following a very aggressive tightening cycle that's leading to cooling demand, prices, and wage demands. Unemployment remains low as employers have been reluctant to lay people off but there's every chance that will follow.

"The Fed doesn't want to be responsible for a needlessly sharp downturn and the lag effect of monetary policy means that is a risk when the central bank is raising rates as aggressively as they have been. Another good inflation report today, particularly on the core side, will give policymakers more than enough reason to slow the pace of tightening further and even lower the terminal rate projections in March, if it continues."

The US consumer price index for December is due at 1330 GMT.

In UK equity markets, meanwhile, it was a bumper day for retail updates.

Tesco was in the red even as the supermarket chain reiterated full-year profit guidance and posted strong Christmas sales.

The grocer, the UK's largest by market share, said like-for-like sales excluding fuel in the UK and Ireland jumped by 7.8% in the six weeks to 7 January and by 7.2% in the UK. Across the 19 weeks to 7 January - which includes the third quarter - group sales rose 6.4%.

Marks & Spencer also lost ground despite posting a jump in sales over the Christmas period.

Halfords shares tumbled after the motoring and cycling products retailer cut its full-year profit guidance amid weakness in the consumer tyre market and labour market issues. The company said it now expects underlying pre-tax profit for FY23 of between £50m and £60m, down from previous guidance of £65m to £75m.

On the upside, online fashion retailer Asos surged despite reporting a slide in sales over the crucial festive trading period. It said the UK had been hit by weak consumer sentiment, first in September and then again in December, which was further affected by disruption in the delivery market after Royal Mail workers carried out a series of strikes.

Away from retailers, British Gas owner Centrica rallied after it lifted earnings guidance again as volumes remained strong amid surging energy prices for consumers. The company now expects full-year adjusted earnings per share of above 30p compared with a previous estimate of between 15.1p and 26p provided on 10 November.

Premier Inn owner Whitbread also racked up solid gains as it posted a rise in third-quarter sales, highlighting a strong performance in the UK and further progress in Germany.

Market Movers

FTSE 100 (UKX) 7,766.50 0.54% FTSE 250 (MCX) 19,611.58 0.46% techMARK (TASX) 4,503.11 0.42%

FTSE 100 - Risers

Centrica (CNA) 96.74p 5.38% Whitbread (WTB) 2,963.00p 3.78% Vodafone Group (VOD) 90.53p 3.09% M&G (MNG) 195.90p 2.67% DCC (CDI) (DCC) 4,463.00p 2.17% JD Sports Fashion (JD.) 153.95p 2.12% Persimmon (PSN) 1,322.50p 2.01% Unite Group (UTG) 973.50p 1.88% Airtel Africa (AAF) 112.90p 1.80% SEGRO (SGRO) 831.80p 1.66%

FTSE 100 - Fallers

B&M European Value Retail S.A. (DI) (BME) 433.00p -4.18% Tesco (TSCO) 239.60p -1.68% SSE (SSE) 1,664.50p -1.65% Sainsbury (J) (SBRY) 239.10p -1.16% RS Group (RS1) 887.00p -1.11% Sage Group (SGE) 775.00p -1.02% Beazley (BEZ) 660.00p -0.98% Smith & Nephew (SN.) 1,152.50p -0.73% Ashtead Group (AHT) 5,074.00p -0.55% Johnson Matthey (JMAT) 2,195.00p -0.45%

FTSE 250 - Risers

ASOS (ASC) 639.00p 9.04% Hilton Food Group (HFG) 592.00p 8.03% IP Group (IPO) 65.70p 4.45% Savills (SVS) 905.50p 4.08% Quilter (QLT) 101.70p 3.95% Mitchells & Butlers (MAB) 168.80p 3.75% Dechra Pharmaceuticals (DPH) 2,780.00p 3.04% Drax Group (DRX) 663.00p 2.31% Darktrace (DARK) 256.40p 2.27% Aston Martin Lagonda Global Holdings (AML) 169.05p 2.27%

FTSE 250 - Fallers

Ibstock (IBST) 157.80p -2.83% Keller Group (KLR) 720.00p -2.70% Direct Line Insurance Group (DLG) 174.30p -1.97% Bank of Georgia Group (BGEO) 2,615.00p -1.51% Marks & Spencer Group (MKS) 141.30p -1.46% Pagegroup (PAGE) 440.20p -1.43% HGCapital Trust (HGT) 370.00p -1.07% International Distributions Services (IDS) 217.80p -0.95% Primary Health Properties (PHP) 115.10p -0.95% Close Brothers Group (CBG) 1,066.00p -0.93%