London midday: Stocks erase gains, trade flat ahead of US data

(Sharecast News) - UK stocks had pared earlier losses to inch into positive territory by Wednesday lunchtime, though upside was limited ahead of a key reading of inflation in the US. The FTSE 100 was up just 0.04% at 8,283.60 just before midday, having fallen to a low of 8,248.42 (-0.4%) early on, having traded within a narrow range of around 100 points for the past two weeks.

Dan Coatsworth, investment analyst at AJ Bell said: "After a good start to the year, the UK index has stubbornly remained in a small trading range since June."

In the absence of economic data this side of the Pond, the US consumer price index for November, due at 1330 GMT, will garner a lot of attention. The data is expected to show that annual inflation rose to 2.7% from 2.6% the month before, with the core rate holding steady at 3.3%.

Kathleen Brooks, research director at XTB, said the report was "pivotal for markets", though won't likely put off the Federal Reserve cutting interest rates at a meeting next week.

"However, a hot inflation print, that pushes headline inflation well above estimates, could lead to questions being asked about the wisdom of cutting interest rates when inflation remains high, and before the new Trump administration comes in with policies that could trigger even more price pressure down the line," Brooks said.

IAG and Reckitt provide a lift

British Airways owner IAG was a high flyer after Deutsche Bank upgraded the shares to 'buy' from 'hold' and hiked the price target to 400p from 215p. Analysts said valuation "multiples compare very favourably versus its history".

The stock may have also been given a boost by data from Heathrow which said it is preparing for its busiest December in history after November's traffic statistics set new records.

Consumer goods giant Reckitt Benckiser was also in demand after an upgrade to 'buy' from 'hold' at HSBC. The bank said the stock trades at a "material discount to peers", as it raised its target price to 5,500p from 4,800p.

Also higher was British American Tobacco after reaffirming its full-year guidance for 2024, supported by a stronger second half driven by investments in its US commercial operations and innovation in its 'New Categories' portfolio.

Equipment rental giant Ashtead Group continued to fall after announcing plans on Tuesday to shift its primary listing to the US on the same day it issued a profit warning.

On the FTSE 250, IT provider Kainos jumped 7% on the news it has re-appointed Brendan Mooney to the board as chief executive officer. Mooney will succeed outgoing CEO Russell Sloan, who will step down from the role with immediate effect. Sloan previously took over from Mooney in September 2023.

Market Movers

FTSE 100 (UKX) 8,283.60 0.04% FTSE 250 (MCX) 20,946.49 -0.13% techMARK (TASX) 4,665.84 0.03%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 289.00p 2.48% Reckitt Benckiser Group (RKT) 4,812.00p 2.32% Pearson (PSON) 1,261.50p 1.94% BAE Systems (BA.) 1,194.00p 1.27% Rentokil Initial (RTO) 411.20p 1.01% InterContinental Hotels Group (IHG) 9,838.00p 0.82% Imperial Brands (IMB) 2,605.00p 0.81% British American Tobacco (BATS) 2,989.00p 0.67% Mondi (MNDI) 1,202.00p 0.67% Smurfit Westrock (DI) (SWR) 4,238.00p 0.67%

FTSE 100 - Fallers

Ashtead Group (AHT) 5,110.00p -5.23% SEGRO (SGRO) 724.20p -1.44% Associated British Foods (ABF) 2,174.00p -1.36% Smith & Nephew (SN.) 979.20p -1.33% British Land Company (BLND) 368.20p -1.07% Land Securities Group (LAND) 581.00p -1.02% Convatec Group (CTEC) 233.20p -1.02% Entain (ENT) 804.00p -0.96% DCC (CDI) (DCC) 5,500.00p -0.90% CRH (CDI) (CRH) 7,724.00p -0.90%

FTSE 250 - Risers

Kainos Group (KNOS) 859.00p 6.97% Raspberry PI Holdings (RPI) 443.10p 5.40% SSP Group (SSPG) 192.80p 3.21% Man Group (EMG) 214.80p 2.78% Endeavour Mining (EDV) 1,537.00p 2.47% St James's Place (STJ) 879.50p 1.79% Bakkavor Group (BAKK) 149.50p 1.36% JPMorgan Indian Investment Trust (JII) 1,068.00p 1.33% Babcock International Group (BAB) 499.80p 1.30% IP Group (IPO) 51.60p 1.18%

FTSE 250 - Fallers

Close Brothers Group (CBG) 228.00p -4.20% Ocado Group (OCDO) 303.90p -3.19% Future (FUTR) 998.50p -2.87% Safestore Holdings (SAFE) 694.00p -1.98% Baillie Gifford US Growth Trust (USA) 278.50p -1.94% NCC Group (NCC) 135.00p -1.89% Moonpig Group (MOON) 224.50p -1.75% Marshalls (MSLH) 310.00p -1.59% Investec (INVP) 584.50p -1.52% Big Yellow Group (BYG) 993.00p -1.49%