London midday: Stocks nudge up in quiet trade; shop price inflation in focus

(Sharecast News) - London stocks had nudged higher by midday on Tuesday following heavy losses in the previous session, as investors mulled the latest UK shop price data. The FTSE 100 was up 0.1% at 7,519.86.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 could only muster a 0.1% rise on Tuesday to 7,520 with investors flocking to park their money in defensives such as GSK and Unilever, and financials which should benefit from rates staying higher for longer."

The latest shop price index from the British Retail Consortium and Nielsen released earlier showed that month-on-month shop price inflation fell to its lowest level in a year in September, with food prices falling for the first time in over two years.

The index, which measures price changes of 500 of the most commonly bought items in the UK, eased to an annual rate of 6.2% last month, down 70 basis points on August.

This was below the three-month rolling average of 6.8% and the lowest level since September 2022.

The slowdown came as food-price inflation fell to 9.9%, from 11.5% and was significantly under the three-month average of 11.4%.

In month-on-month terms, food prices actually declined, which the BRC put down to "fierce competition" between retailers.

"Customers who bought dairy, margarine, fish and vegetables - all typically own-brand lines - will have found lower prices compared to last month. Households also benefitted from price cuts for school uniforms and other back-to-school essentials," said Helen Dickinson, the BRC's chief executive.

Looking ahead, Dickinson expects shop price inflation to continue to fall over the rest of 2023 but remained cautious due to a number of risk factors, including high interest rates, climbing oil prices, global shortages of sugar, as well as the supply chain disruption from the war in Ukraine.

"Retailers will continue to do all they can to support their customers and bring prices down, especially as households face being squeezed by higher energy and mortgage bills."

In equity markets, luxury fashion brand Burberry was knocked lower by a downgrade to 'sell' at UBS.

High street bakery chain Greggs was also weaker despite saying it expects to hit targets this year after a solid third quarter.

Victoria Scholar, head of investment at Interactive Investor, said: "The CEO Roisin Currie told Reuters the company is not planning to increase prices pre-Christmas and there is still significant inflation in the market, such as staff wages. The comments appear to be weighing on its share price."

Outside the FTSE 350, fast fashion retailer Boohoo slid after saying it swung to a first-half loss and cutting its full-year revenue outlook. It pointed to a slower-than-expected volume recovery and the continued targeting of more profitable sales within labels.

Market Movers

FTSE 100 (UKX) 7,519.86 0.12% FTSE 250 (MCX) 17,873.37 -0.58% techMARK (TASX) 4,213.19 -0.17%

FTSE 100 - Risers

HSBC Holdings (HSBA) 653.40p 2.13% Rightmove (RMV) 564.20p 1.77% Pearson (PSON) 870.40p 1.52% Flutter Entertainment (CDI) (FLTR) 13,435.00p 1.43% GSK (GSK) 1,503.20p 1.29% Standard Chartered (STAN) 762.80p 1.19% Haleon (HLN) 341.85p 1.12% Auto Trader Group (AUTO) 618.40p 0.98% Unilever (ULVR) 4,062.50p 0.94% WPP (WPP) 716.00p 0.85%

FTSE 100 - Fallers

Ocado Group (OCDO) 564.40p -3.82% United Utilities Group (UU.) 915.80p -3.66% Burberry Group (BRBY) 1,834.50p -3.12% Severn Trent (SVT) 2,276.00p -3.11% JD Sports Fashion (JD.) 145.25p -2.58% SSE (SSE) 1,513.50p -2.51% BT Group (BT.A) 113.20p -2.16% National Grid (NG.) 931.00p -1.98% Fresnillo (FRES) 525.60p -1.76% Barratt Developments (BDEV) 420.60p -1.75%

FTSE 250 - Risers

Apax Global Alpha Limited (APAX) 166.60p 2.21% North Atlantic Smaller Companies Inv Trust (NAS) 3,490.00p 2.05% Mitchells & Butlers (MAB) 217.40p 1.87% Bank of Georgia Group (BGEO) 3,720.00p 1.64% Man Group (EMG) 226.50p 1.62% TBC Bank Group (TBCG) 2,975.00p 1.54% Breedon Group (BREE) 336.00p 1.51% Essentra (ESNT) 169.20p 1.44% CAB Payments Holdings (CABP) 231.25p 1.43% Close Brothers Group (CBG) 856.50p 1.36%

FTSE 250 - Fallers

Diversified Energy Company (DEC) 74.70p -5.02% Moonpig Group (MOON) 158.20p -4.35% Ithaca Energy (ITH) 169.10p -3.26% Ceres Power Holdings (CWR) 300.00p -3.23% Greggs (GRG) 2,402.00p -3.07% FirstGroup (FGP) 146.60p -2.85% Vistry Group (VTY) 860.50p -2.82% Auction Technology Group (ATG) 626.00p -2.80% Drax Group (DRX) 419.10p -2.67% Discoverie Group (DSCV) 626.00p -2.64%