London open: Stocks rebound from four-week low

(Sharecast News) - UK stocks edged higher on Wednesday morning as markets rebounded after the previous day's sell-off, with investors digesting domestic inflation data and hawkish comments from the head of the Federal Reserve. The FTSE 100, which dropped 1.8% to a four-week low of 7,820.36 on Tuesday, was up 0.12% at 7,830 by 0836 BST, with mining stocks bouncing back after bearing the brunt of selling pressure the day before.

Comments from Federal Reserve chair Jerome Powell the previous evening will likely be weighing on investors' minds on Wednesday morning, after the head of the US central bank needed more confidence that inflation was on a downward trend before cutting interest rates. "Right now, given the strength of the labour market and progress on inflation so far, it's appropriate to allow restrictive policy further time to work," he said.

Back on home soil, data released before the opening bell showed that the annual rate of UK inflation eased less than hoped in March, falling from 3.4% to 3.2%, missing the 3.1% consensus forecast. Following strong wage-growth data reported on Tuesday, the figures will likely prompt caution from the Bank of England as they attempt to keep price pressures in check before cutting rates.

Danni Hewson, head of financial analysis at AJ Bell, said there were a "few troubling issues" in the data release notably the stickiness of service sector inflation. "This print is unlikely to persuade Bank of England policymakers, who just a couple of months ago were voting for further hikes, that the time is now right to start to cut," Hewson said.

"Looking at the numbers after the inflation print was released, expectation of a June cut has fallen back significantly and more than 50% now think even August will be too soon," she said.

Later in the session, we'll see inflation revisions to the eurozone inflation rate for March, along with speeches from a number of board members of the European Central Bank, including chief Christine Lagarde, along with comments from a number of prominent Fed figures.

Miners provide a lift

Mining stocks headlined the FTSE 100 risers list early on, with Rio Tinto and Anglo American among the best performers. Rio Tinto announced on Wednesday that it was holding on to annual production guidance, despite a sharp fall in first-quarter iron ore shipments and production; while Anglo reported an improvement in rough diamond sales in the latest sales cycle at its De Beers division.

Sector peer Antofagasta was also higher after reiterating its full-year output targets even after a 11% drop in copper production in the first quarter.

Struggling online fast-fashion retailer Asos jumped 8% after its first-half results weren't as bad as feared, and the company said underlying earnings in the 2024-25 financial year are set to be "significantly" higher than the previous two years as it cuts costs and slashes stock levels.

Stocks in defensive sectors such as utilities weakened as investor risk appetite returned, with SSE, Severn Trent and United Utilities among the worst performers on the FTSE 100.

Market Movers

FTSE 100 (UKX) 7,829.51 0.12% FTSE 250 (MCX) 19,320.75 -0.12% techMARK (TASX) 4,384.57 -0.26%

FTSE 100 - Risers

Fresnillo (FRES) 605.00p 3.51% Anglo American (AAL) 2,141.50p 2.22% Rio Tinto (RIO) 5,355.00p 1.92% Prudential (PRU) 700.60p 1.92% Burberry Group (BRBY) 1,154.50p 1.72% Beazley (BEZ) 657.00p 1.47% Entain (ENT) 817.40p 1.39% Standard Chartered (STAN) 644.00p 1.39% Aviva (AV.) 457.30p 1.08% Lloyds Banking Group (LLOY) 50.16p 0.93%

FTSE 100 - Fallers

Pershing Square Holdings Ltd NPV (PSH) 3,822.00p -1.75% SSE (SSE) 1,602.00p -1.32% Severn Trent (SVT) 2,327.00p -1.10% Kingfisher (KGF) 241.80p -1.06% Marks & Spencer Group (MKS) 244.40p -1.05% Melrose Industries (MRO) 625.20p -1.01% Next (NXT) 8,754.00p -0.95% United Utilities Group (UU.) 992.40p -0.86% GSK (GSK) 1,597.00p -0.84% Spirax-Sarco Engineering (SPX) 9,380.00p -0.79%

FTSE 250 - Risers

Petershill Partners (PHLL) 199.40p 4.84% Hilton Food Group (HFG) 900.00p 2.39% Spirent Communications (SPT) 196.00p 1.98% Ithaca Energy (ITH) 117.60p 1.91% Watches of Switzerland Group (WOSG) 343.00p 1.54% RHI Magnesita N.V. (DI) (RHIM) 3,390.00p 1.50% IntegraFin Holding (IHP) 296.00p 1.37% Savills (SVS) 1,046.00p 1.36% Indivior (INDV) 1,558.00p 1.30% Coats Group (COA) 81.10p 1.25%

FTSE 250 - Fallers

Me Group International (MEGP) 160.20p -2.20% Ashmore Group (ASHM) 176.30p -1.89% Baillie Gifford Japan Trust (BGFD) 706.00p -1.81% C&C Group (CDI) (CCR) 156.20p -1.76% Morgan Advanced Materials (MGAM) 281.50p -1.75% TUI AG Reg Shs (DI) (TUI) 566.00p -1.57% Auction Technology Group (ATG) 518.00p -1.52% Dr. Martens (DOCS) 66.00p -1.49% Harbour Energy (HBR) 293.50p -1.48% Kainos Group (KNOS) 973.00p -1.42%