London midday: Stocks little changed, buoyed by retreat in Gilt yields

(Sharecast News) - Stocks in London were little changed on Wednesday ahead of the release of key inflation data in the U.S. later in the session. The situation in the Middle East was also still very much on investors' minds.

Against that backdrop, as of 1154 BST the FTSE 100 was edging up by 0.08% to 7,634.29.

In parallel, the yield on the benchmark 10-year Gilt was again moving lower and down by 10 basis points on the day to 4.334%, mimicking similar moves in U.S. Treasuries.

"Notably, the recovery in risk sentiment hasn't translated into higher US yields, indicating a degree of acceptance of the Federal Reserve's less hawkish turn," said Stephen Innes, managing partner at SPI Asset Management.

"While the market awaits the release of US PPI data and the Fed's meeting minutes today, recent dovish comments from Fed officials have been suspiciously synchronized; hence, US bond yields have continued to slide, suggesting recent Fed rhetoric is sinking in and will take precedence, over the meeting minutes."

At 1330 BST the U.S. Department of Labor was scheduled to release producer price figures for the month of September.

Investors would also be keeping close tabs on a slew of scheduled speeches from top Federal Reserve officials.

First out would be Fed governor Michele Bowman at 0915 BST who was scheduled to deliver a speech in Marrakech, Morocco, at the IMF's annual meeting.

She would be followed at 1515 BST by Fed governor Christopher Waller, Atlanta Fed boss Raphael Bostic at 1715 BST and Boston Fed chief Susan Collins at 2130 BST.

And at 1900 BST the Federal Reserve was to release the minutes of its last rate-setting meeting.

"In the last few days, we've heard from Fed vice chair Philip Jefferson, Dallas Fed President Lori Logan, who were followed yesterday by Atlanta Fed President Raphael Bostic, as well as Minneapolis Fed President Neel Kashkari who all acknowledged that monetary policy could be restrictive enough and that rising yields could mean the Fed might have to do less, and not hike again in November," said Michael Hewson, chief market analyst at CMC Markets UK.

"While this may be true, this week's inflation numbers could prompt some repricing of that expectation if they come in hotter than expected, starting with today's PPI numbers for September, and tomorrow's CPI report."

Burberry hit by read across from weak Q3 trading at peer LVMH

Shares of luxury fashion retailer Burberry were near the bottom of the pile on the top-flight index after sector peer LVMH said organic revenue growth had eased to 9% in the third quarter, well below the 11.2% growth expected by analysts.

Recruitment firm Pagegroup said it expects full-year profits to drop by as much as 36% as a result of ongoing challenging conditions across Asia, the UK and US markets in the third quarter. Group operating profit for 2023, excluding one-off items, is expected to come in at between £125m and £130m, compared with the £196.1m made in 2022.

FirstGroup said in an update on Wednesday that it was expecting improved full-year profits in both its rail and bus divisions, citing stronger-than-expected demand and agreed variable fee payments with the Department for Transport for First Rail, and robust passenger volumes plus pension fund changes for First Bus. Corporate actions included managing Greyhound pension liabilities and purchasing a portion of its 2024 bonds. As a result, 2024 group adjusted operating and attributable profits were expected to surpass previous board expectations by £14 to £20m and £7m to £10m, respectively, with an anticipated year-end adjusted net cash position of £20m to £30m.

Gold producer Endeavour Mining has said that it's about 70% of the way through planned drilling at its key Côte d'Ivoire project for 2023, but results so far have been promising. The company, with exploration assets across West Africa, said 123km has been drilled at its Tanda-Iguela projects so far this year with plans for an additional 55km before the year is out, well ahead of the 70km initially planned. An updated mineral resource estimate for its key Assafou deposit will be published later this year, but Endeavour says that drill results obtained so far "continue to demonstrate [Tanda-Iguela's] potential to become Endeavour's next cornerstone asset".

Market Movers

FTSE 100 (UKX) 7,639.12 0.14% FTSE 250 (MCX) 17,896.48 -0.40% techMARK (TASX) 4,202.02 0.02%

FTSE 100 - Risers

Imperial Brands (IMB) 1,750.50p 1.60% BP (BP.) 532.10p 1.33% BT Group (BT.A) 119.70p 1.23% SSE (SSE) 1,586.50p 1.12% Severn Trent (SVT) 2,416.00p 1.05% United Utilities Group (UU.) 970.00p 1.02% Fresnillo (FRES) 552.00p 0.99% M&G (MNG) 199.70p 0.94% Endeavour Mining (EDV) 1,576.00p 0.83% Hikma Pharmaceuticals (HIK) 2,081.00p 0.82%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,784.00p -2.81% Kingfisher (KGF) 211.80p -2.75% JD Sports Fashion (JD.) 140.40p -2.60% Next (NXT) 6,890.00p -2.08% Convatec Group (CTEC) 210.40p -1.96% Marks & Spencer Group (MKS) 221.40p -1.77% Frasers Group (FRAS) 813.00p -1.75% International Consolidated Airlines Group SA (CDI) (IAG) 148.05p -1.43% Smith & Nephew (SN.) 966.80p -1.43% Barratt Developments (BDEV) 426.30p -1.34%

FTSE 250 - Risers

Mitie Group (MTO) 104.00p 5.05% FirstGroup (FGP) 153.20p 4.57% W.A.G Payment Solutions (WPS) 97.40p 3.62% Baltic Classifieds Group (BCG) 188.20p 1.73% Ferrexpo (FXPO) 77.00p 1.65% Jupiter Fund Management (JUP) 90.30p 1.52% Trainline (TRN) 265.60p 1.45% Primary Health Properties (PHP) 93.85p 1.40% Balanced Commercial Property Trust Limited (BCPT) 67.30p 1.36% Supermarket Income Reit (SUPR) 76.10p 1.33%

FTSE 250 - Fallers

Travis Perkins (TPK) 749.20p -7.00% Pagegroup (PAGE) 404.00p -4.72% Howden Joinery Group (HWDN) 681.60p -3.86% Grafton Group Ut (CDI) (GFTU) 835.00p -3.84% Ibstock (IBST) 134.50p -3.17% Currys (CURY) 47.78p -3.16% Watches of Switzerland Group (WOSG) 517.00p -3.09% Energean (ENOG) 905.50p -3.00% BlackRock Greater Europe Inv Trust (BRGE) 490.50p -2.87% Dr. Martens (DOCS) 132.20p -2.79%