London midday: FTSE stays down after inflation data, amid Middle East woes

(Sharecast News) - London stocks were still in the red by midday on Wednesday as investors mulled a slightly hotter-than-expected UK inflation print, with the conflict in the Middle East denting sentiment. The FTSE 100 was down 0.6% at 7,630.97.

According to figures released earlier by the Office for National Statistics, consumer price inflation stuck at 6.7%, versus consensus expectations for it to ease to 6.6%.

Core CPI - which strips out energy, food, alcohol and tobacco - rose 6.1% in the 12 months to September. This was down from 6.2% a month earlier but a touch higher than expectations of 6.0%.

ONS chief economist Grant Fitzner said: "After last month's fall, annual inflation was unchanged in September.

"Food and non-alcoholic drinks prices eased again across a range of items with the cost of household appliances and air fares also falling this month.

"These were offset by rising prices for motor fuels and the cost of hotel stays."

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "Inflation is staying obstinately high in the UK, adding fuel to fears that interest rates will have to stay in an elevated position - a pattern of worry that's just reared up again in the United States. An unwelcome combination of worries about a worsening situation in the Middle East and concerns about high interest rates settling in, is unsettling investors.

"Prices had been cooling in the UK but instead of heading a small notch downwards as largely expected, the CPI headline rate of inflation came to an abrupt halt in September, as the impact of higher fuel prices fed through. Oil prices have surged again amid worsening violence in Israel and Gaza, with Brent Crude the benchmark heading above $91, adding to worries that inflation will stay stubborn. The door has still been kept ajar to another rate hike in the UK, but at the very least still untamed inflation is pushing any chance of a rate cut further back into next year."

Separate figures from the ONS showed that house prices were largely unchanged in August, as higher mortgage rates continued to dampen demand.

According to the ONS seasonally-adjusted UK house price index, average prices increased by just 0.2% in the 12 months to August, to £291,000, That compares to a 0.7% uptick in July.

The growth was the lowest annual rate in just over 11 years, although it was also marginally above consensus expectations of 0.0%.

Month-on-month, prices rose 0.3% in August.

Investors were also digesting the latest data releases out of China, which showed that the economy grew faster than expected in the third quarter.

GDP rose by 4.9% year-on-year in Q3, after rising 6.3% in the second quarter, coming in above consensus expectations for 4.5% growth.

Meanwhile, industrial production grew 4.5% year-on-year in September, unchanged from August and versus consensus expectations of 4.4% growth.

Retail sales were up 5.5% following 4.6% growth in August and versus expectations of 4.9%.

In equity markets, housebuilder Barratt Developments slumped as it said it remains on track to hit targeted home completions but that the outlook for the year "remains uncertain". Persimmon, Taylor Wimpey, Berkeley Group, Bellway and Crest Nicholson also fell.

Airlines flew lower, with BA and Iberia owner IAG, Wizz Air and easyJet all down after United Airlines said it was forecasting weaker earnings for the fourth quarter due to higher costs. Wizz was also hit by a rating downgrade at Citi.

William Hill and Mr Green owner 888 slumped after it posted a 10% decline in third-quarter revenues as it took a hit from new gambling regulations and customer-friendly results.

On the upside, Whitbread rallied after the Premier Inn owner posted a 44% jump in interim adjusted pre-tax profit, hiked its dividend and announced a £300m share buyback.

Marshalls was also sharply higher as it backed its full-year expectations despite reporting a dip in revenue for the nine months to the end of September.

Market Movers

FTSE 100 (UKX) 7,630.97 -0.58% FTSE 250 (MCX) 17,489.82 -1.13% techMARK (TASX) 4,144.78 -0.73%

FTSE 100 - Risers

Whitbread (WTB) 3,461.00p 4.15% BT Group (BT.A) 119.25p 1.62% Endeavour Mining (EDV) 1,697.00p 1.13% BP (BP.) 560.80p 1.05% InterContinental Hotels Group (IHG) 6,196.00p 0.98% Fresnillo (FRES) 562.60p 0.86% M&G (MNG) 200.00p 0.86% Shell (SHEL) 2,788.00p 0.60% United Utilities Group (UU.) 1,035.00p 0.53% Admiral Group (ADM) 2,445.00p 0.45%

FTSE 100 - Fallers

AstraZeneca (AZN) 10,854.00p -3.69% Barratt Developments (BDEV) 410.40p -3.18% Taylor Wimpey (TW.) 108.20p -3.18% International Consolidated Airlines Group SA (CDI) (IAG) 142.05p -2.71% Rolls-Royce Holdings (RR.) 211.10p -2.09% Smith & Nephew (SN.) 929.80p -2.00% Berkeley Group Holdings (The) (BKG) 4,018.00p -1.98% Weir Group (WEIR) 1,769.50p -1.94% RS Group (RS1) 700.20p -1.68% London Stock Exchange Group (LSEG) 8,058.00p -1.66%

FTSE 250 - Risers

Marshalls (MSLH) 206.20p 4.14% PureTech Health (PRTC) 174.60p 2.95% CAB Payments Holdings (CABP) 223.00p 2.76% Digital 9 Infrastructure NPV (DGI9) 41.25p 2.61% Just Group (JUST) 76.00p 1.60% Chemring Group (CHG) 277.50p 1.28% Hipgnosis Songs Fund Limited NPV (SONG) 69.80p 1.16% Ithaca Energy (ITH) 174.10p 1.10% W.A.G Payment Solutions (WPS) 95.00p 1.06% BH Macro Ltd. GBP Shares (BHMG) 366.00p 0.83%

FTSE 250 - Fallers

Persimmon (PSN) 1,018.00p -4.82% Bellway (BWY) 2,138.00p -4.30% easyJet (EZJ) 374.50p -4.12% TUI AG Reg Shs (DI) (TUI) 431.20p -3.75% Crest Nicholson Holdings (CRST) 167.50p -3.74% IP Group (IPO) 47.85p -3.72% Quilter (QLT) 81.00p -3.69% Ceres Power Holdings (CWR) 241.00p -3.68% Watches of Switzerland Group (WOSG) 494.20p -3.48% Future (FUTR) 832.50p -3.31%