London midday: Stocks fall as oil, gas prices jump

(Sharecast News) - London stocks had fallen into the red by midday on Friday as a hotter-than-expected US inflation print and rising oil and gas prices added to concerns about rate hikes. The FTSE 100 was down 0.5% at 7,605.62.

Stocks on Wall Street fell after data showed that consumer price inflation rose 3.7% on the year in September, in line with August and higher than expectations of 3.6% growth, putting a potential rate hike by the Federal Reserve back on the table.

On the month, prices rose 0.4% in September, down from a 0.6% increase in August but above consensus expectations for a 0.3% jump.

Richard Hunter, head of markets at Interactive Investor, said: "While the figures were close to estimates, they nonetheless reignited concerns that the last leg towards reaching the Fed's 2% target could prove the most difficult, with some core measures apparently refusing to budge. The news also came after a stronger than expected reading on producer prices the previous day, adding to the fact that investors currently have more questions than answers.

"The hiking cycle may have reached a peak, but the level of rates is likely to remain in force until such time as inflation is comfortably under control. Releases such as the latest inflation data also push back any possibility of the interest rate cuts which many investors had been anticipating, while the underlying strength of the economy continues to point to one which remains strong enough to withstand the rate pressure."

Market participants were also mulling the latest data out of China, with the consumer price reading coming in flat and factory gate prices declining at a lower pace than in previous months.

"This suggest that deflationary pressures persist, with weak domestic demand adding to the problem. For the optimists, a further decline in China's imports and exports for September was at a slower rate, which could signal some signs of stability. In the background, however, investors are still fretting over whether any stimulative measures by the authorities to date have been sufficient to light the fire under a true recovery," said Hunter.

Russ Mould, investment director at AJ Bell, said that with gas prices and oil "starting to bubble higher again in the wake of the war in Gaza, there is the potential for further inflationary pressure to complicate the decision making of central banks yet again".

Investors also shifted their attention to earnings across the pond, with results out from JP Morgan Chase, Wells Fargo and Citigroup.

In UK equity markets, St James's Place tumbled after the wealth manager confirmed it is assessing its fees and charges structure. The statement followed a Financial Times report suggesting that the company was under pressure from regulators.

Hargreaves Lansdown was also under the cosh.

British American Tobacco fell after the US Food and Drug Administration on Thursday blocked the sale of six flavours of its main vape brand, Vuse Alto.

Ashmore lost ground after the emerging markets asset manager said it saw an 8% drop in assets under management in its fiscal first quarter on the back of ongoing market volatility and risk aversion.

On the upside, BP and Shell rallied in tandem with oil prices.

Elsewhere, the Competition and Markets Authority said it had cleared Microsoft's proposed $69bn acquisition of 'Call of Duty' maker Activision Blizzard.

Market Movers

FTSE 100 (UKX) 7,605.62 -0.51% FTSE 250 (MCX) 17,646.43 -1.06% techMARK (TASX) 4,167.04 -0.82%

FTSE 100 - Risers

BP (BP.) 549.80p 2.56% Endeavour Mining (EDV) 1,620.00p 2.08% Fresnillo (FRES) 539.20p 1.97% Shell (SHEL) 2,717.50p 1.36% National Grid (NG.) 973.60p 0.93% BAE Systems (BA.) 1,076.00p 0.70% Admiral Group (ADM) 2,415.00p 0.54% Rolls-Royce Holdings (RR.) 212.60p 0.38% United Utilities Group (UU.) 983.80p 0.33% Severn Trent (SVT) 2,430.00p 0.29%

FTSE 100 - Fallers

St James's Place (STJ) 685.20p -16.30% Hargreaves Lansdown (HL.) 740.20p -3.80% British American Tobacco (BATS) 2,443.00p -3.71% Spirax-Sarco Engineering (SPX) 8,580.00p -3.53% Entain (ENT) 919.80p -3.40% JD Sports Fashion (JD.) 133.60p -2.80% Prudential (PRU) 883.80p -2.79% NATWEST GROUP (NWG) 223.10p -2.75% Ocado Group (OCDO) 558.20p -2.45% Sainsbury (J) (SBRY) 253.50p -2.20%

FTSE 250 - Risers

Energean (ENOG) 881.50p 3.71% Mobico Group (MCG) 63.65p 3.33% Centamin (DI) (CEY) 85.40p 3.14% Ithaca Energy (ITH) 180.50p 1.86% Baltic Classifieds Group (BCG) 198.20p 1.64% Oxford Instruments (OXIG) 1,910.00p 1.49% Harbour Energy (HBR) 262.70p 1.47% FirstGroup (FGP) 153.00p 1.12% Foresight Group Holdings Limited NPV (FSG) 393.00p 1.03% Hipgnosis Songs Fund Limited NPV (SONG) 75.60p 0.93%

FTSE 250 - Fallers

Ashmore Group (ASHM) 173.20p -6.18% IP Group (IPO) 49.80p -4.23% easyJet (EZJ) 390.90p -3.79% Darktrace (DARK) 370.00p -3.72% FDM Group (Holdings) (FDM) 442.00p -3.70% Petershill Partners (PHLL) 145.40p -3.58% Abrdn (ABDN) 160.20p -3.55% OSB Group (OSB) 305.60p -3.41% Liontrust Asset Management (LIO) 559.50p -3.20% Mitchells & Butlers (MAB) 206.20p -3.19%