London midday: FTSE flat as investors pause for breath

(Sharecast News) - London stocks had pared earlier small gains to trade flat by midday on Tuesday as investors erred on the side of caution ahead of key US inflation data later this week. The FTSE 100 was steady at 7,686.63.

Russ Mould, investment director at AJ Bell, said markets in London were finding a "moment of calm after a series of big macro-economic and corporate announcements".

He continued: "Mining companies did a lot of heavy lifting for the index, as leading commodities consumer China took steps to bolster confidence in its currency and economy ahead of a big leadership summit which kicks off in Beijing in early March.

"Later tonight a reading of US consumer confidence starts the gun on some big releases across the Atlantic. These could offer insight on whether a soft landing can be engineered for the US economy.

"The latest estimate of fourth quarter GDP follows on Wednesday, and on Thursday the core PCE reading of inflation is published. This metric is closely followed by the Federal Reserve when it comes to making decisions on interest rates."

On home shores, figures released by Kantar showed that grocery price inflation dropped to 5.3% in February - its lowest rate since March 2022 - from 6.9% a month earlier.

Tom Steel, strategic insight director at Kantar, said: "Things are looking up for shoppers this February. Consumers have been navigating a grocery inflation rate of more than 4% for two years now, so this latest easing of price rises is especially welcome.

"Though there's been lots of discussion about the impact the Red Sea shipping crisis might have on the cost of goods, supermarkets have been pulling out all the stops to keep prices down and help people manage their budgets. This month, Morrisons became the latest retailer to launch a price match scheme with Aldi and Lidl, after Asda made the move in January.

"More generally, we saw promotions accelerate this month after a post-Christmas slowdown. Consumers' spending on offers increased by 4% in February, worth £586 million more than the same month in 2023. Sainsbury's and Iceland's efforts paid off in particular, and they were the only retailers to attract more shoppers through their doors. The battle between supermarkets' own-label lines and brands also remains fierce. Own-label nipped ahead this month, growing sales by 5.5% versus branded products at 5.3%."

Investors were also mulling the latest British Retail Consortium-NielsenIQ Shop Price Index, which showed that the annual rate of price growth slowed to 2.5% this month, down from 2.9% in January, as easing supply-chain pressures fed through to food prices.

This was below the three-month average rate of 3.3% and the lowest level since March 2022.

In equity markets, Smith & Nephew rallied after it posted better-than-expected full-year trading profit of $970m and lifted its outlook for 2024. It now expects underlying revenue growth expected of between 5% and 6%, up from 4.6% to 5.6%.

Flutter Entertainment was in the black as Barclays upgraded its stance on the shares to 'overweight' from 'equalweight' and hiked the price target.

Endeavour Mining was up as it said that wet commissioning activities are now underway at the Sabodala-Massawa Expansion project in Senegal, with first gold expected in early May.

Currys gained following a report that investment firm Elliott Advisors has sweetened its offer for the electricals retailer to £750m from £700m.

On the downside, speciality chemicals company Croda International slumped as it warned of lower operating margins after posting a drop in 2023 profits due to customers destocking and a weak macroeconomic environment.

Fund manager Abrdn reversed earlier gains to trade down as it posted a narrowing of its full-year losses and said cost-cutting plans were ahead of target, but warned of a hit to margins as clients shift to passive investing.

Imperial Brands fell amid reports the government may announce a new vaping tax at next week's Budget, while Unilever lost ground after a rating downgrade at Morgan Stanley.

Outside the FTSE 305, On The Beach surged after saying it had signed a long-term distribution agreement with Ryanair, despite the latter having recently branded the online travel agent a "pirate" and accused it of marking up prices.

Market Movers

FTSE 100 (UKX) 7,686.63 0.03% FTSE 250 (MCX) 19,128.81 0.01% techMARK (TASX) 4,395.63 0.14%

FTSE 100 - Risers

Anglo American (AAL) 1,770.60p 2.55% Smith & Nephew (SN.) 1,153.50p 2.49% Vodafone Group (VOD) 67.66p 2.39% Standard Chartered (STAN) 646.40p 1.57% Ocado Group (OCDO) 498.30p 1.38% Rio Tinto (RIO) 5,129.00p 1.22% JD Sports Fashion (JD.) 115.80p 1.14% HSBC Holdings (HSBA) 602.40p 1.12% Antofagasta (ANTO) 1,793.00p 1.10% NATWEST GROUP (NWG) 233.70p 1.08%

FTSE 100 - Fallers

Croda International (CRDA) 4,748.00p -3.16% Imperial Brands (IMB) 1,770.00p -2.67% Unilever (ULVR) 3,918.50p -1.94% Airtel Africa (AAF) 93.20p -1.69% Convatec Group (CTEC) 248.20p -1.12% Bunzl (BNZL) 3,175.00p -1.09% RS Group (RS1) 776.40p -1.07% Informa (INF) 817.80p -0.97% WPP (WPP) 720.00p -0.91% Spirax-Sarco Engineering (SPX) 10,380.00p -0.91%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 173.70p 2.36% Pennon Group (PNN) 672.00p 2.05% Empiric Student Property (ESP) 92.10p 1.99% Watches of Switzerland Group (WOSG) 425.20p 1.87% Sirius Real Estate Ltd. (SRE) 86.10p 1.71% Close Brothers Group (CBG) 337.00p 1.57% Hiscox Limited (DI) (HSX) 1,126.00p 1.44% Games Workshop Group (GAW) 9,725.00p 1.41% Great Portland Estates (GPE) 361.20p 1.40% Helios Towers (HTWS) 77.00p 1.32%

FTSE 250 - Fallers

Ninety One (N91) 164.80p -2.20% C&C Group (CDI) (CCR) 152.00p -2.06% Hargreaves Lansdown (HL.) 734.20p -1.92% AJ Bell (AJB) 301.80p -1.89% Diversified Energy Company (DEC) 975.50p -1.81% PZ Cussons (PZC) 99.00p -1.39% SSP Group (SSPG) 222.60p -1.33% Ibstock (IBST) 163.30p -1.27% Baltic Classifieds Group (BCG) 237.50p -1.25% Softcat (SCT) 1,487.00p -1.20%