London midday: FTSE flat as investors eye US CPI, ECB announcement

(Sharecast News) - London stocks were steady by midday on Tuesday as investors eyed the latest US inflation reading, a policy announcement from the European Central Bank and the start of earnings season across the pond. The FTSE 100 was flat at 7,930.05.

Russ Mould, investment director at AJ Bell, said: "European markets showed signs of nervousness ahead of the European Central Bank's interest rate decision later this week.

"Forecasts imply the ECB will hold rates at 4.5% yet last week's stronger than expected US jobs data and the ongoing strength in the oil price have raised expectations that the Federal Reserve will push back rate cuts until later in the year, and this has subsequently spooked investors into thinking other central banks including the ECB will also sit on their hands for now.

"Tomorrow's CPI inflation figure in the US also threatens to intensify the argument that rate cuts will not be imminent. The consensus forecast is for a 3.4% year-on-year inflation rate in March, up from 3.2% in February and 3.1% in January. Inflation slowly creeping higher goes against what the Fed wants to see to justify rate cuts."

On home shores, data out earlier showed that the unusually early Easter holidays gave the retail sector a big boost in March.

According to the British Retail Consortium-KPMG Retail Sales Monitor, total retail sales rose by 3.5% year-on-year last month, accelerating from the 1.1% annual rise registered in February, above the three-month average growth rate of 2.1% and the 12-month average growth of 2.9%.

March also saw the strongest growth rate since August 2023, with sales rising at a faster rate than inflation for the first time in more than two years, according to Linda Ellett, UK head of consumer markets at KPMG's Leisure & Retail division.

Over the three months to March, food sales were 6.8% higher than a year before, while non-food sales were down 1.9% - both in-store and online non-food sales registered a decline.

"High street sales growth was driven by food and drink, health and beauty and keen gardeners who headed outside to enjoy the first days of spring. There were also some signs of improvement with more categories starting to see positive sales growth in March for the first time in months," Ellett said.

However, Ellett said the UK retail remains a challenging environment, despite a recent improvement in macro conditions. "As April signals big increases in the sector's cost base - through the rise in minimum wage rates and business rate hikes for the larger high street brands - retailers will be hoping that the bounce back of March sales is more than just an Easter blip," she said.

"Economic indicators are heading in the right direction with inflationary pressures easing and interest rates having potentially peaked, however consumer confidence remains fragile, and households continue to keep a close eye on where their tight budgets are being spent."

In equity markets, precious metals miners Fresnillo, Centamin and Hochschild all shone as gold prices hit a fresh record high.

Oil giant BP gained after saying it expects first-quarter upstream production to be higher than the previous three months.

Safety equipment company Halma was boosted by an upgrade to 'overweight' from 'equalweight' at Barclays.

Elsewhere, HSBC Holdings nudged higher after saying it was selling its Argentina business to Grupo Financiero Galicia for $550m and will take a $1bn pre-tax loss in the process as it continues to pivot its operations towards Asia.

Fund, corporate and private client services group JTC rallied as it raised its growth guidance for the next three years after smashing its targets in 2023, helped by a record amount of new business wins.

Imperial Brands nudged up as it said it was on track to meet its half-year and full-year financial guidance.

Market Movers

FTSE 100 (UKX) 7,942.49 -0.01% FTSE 250 (MCX) 19,857.25 0.01% techMARK (TASX) 4,428.67 -0.28%

FTSE 100 - Risers

Fresnillo (FRES) 582.00p 4.68% Ocado Group (OCDO) 387.20p 3.23% St James's Place (STJ) 438.20p 2.34% Rio Tinto (RIO) 5,290.00p 2.04% Weir Group (WEIR) 2,066.00p 1.77% Anglo American (AAL) 2,187.50p 1.51% BP (BP.) 517.30p 1.45% Halma (HLMA) 2,280.00p 1.38% Croda International (CRDA) 4,656.00p 1.28% BT Group (BT.A) 107.35p 1.27%

FTSE 100 - Fallers

BAE Systems (BA.) 1,277.50p -4.49% Rolls-Royce Holdings (RR.) 409.90p -4.47% Standard Chartered (STAN) 681.80p -2.46% CRH (CDI) (CRH) 6,632.00p -2.01% Melrose Industries (MRO) 658.20p -1.88% Whitbread (WTB) 3,199.00p -1.60% InterContinental Hotels Group (IHG) 7,846.00p -1.53% B&M European Value Retail S.A. (DI) (BME) 514.80p -1.42% Scottish Mortgage Inv Trust (SMT) 872.60p -1.29% Barratt Developments (BDEV) 465.00p -1.21%

FTSE 250 - Risers

W.A.G Payment Solutions (WPS) 70.00p 4.17% JTC (JTC) 856.00p 3.88% Aston Martin Lagonda Global Holdings (AML) 172.40p 3.05% Future (FUTR) 700.50p 2.64% Dr. Martens (DOCS) 98.45p 2.55% Close Brothers Group (CBG) 451.00p 2.41% Wizz Air Holdings (WIZZ) 2,314.00p 2.39% Endeavour Mining (EDV) 1,742.00p 2.29% Abrdn Private Equity Opportunities Trust (APEO) 544.00p 2.26% Harbour Energy (HBR) 296.10p 2.17%

FTSE 250 - Fallers

QinetiQ Group (QQ.) 343.80p -5.18% Chemring Group (CHG) 344.00p -4.58% Babcock International Group (BAB) 498.80p -2.86% SSP Group (SSPG) 215.80p -2.18% TP Icap Group (TCAP) 223.00p -1.98% TBC Bank Group (TBCG) 3,135.00p -1.72% ICG Enterprise Trust (ICGT) 1,238.00p -1.59% Breedon Group (BREE) 373.00p -1.58% Trainline (TRN) 357.60p -1.54% 4Imprint Group (FOUR) 6,440.00p -1.53%