London open: FTSE edges lower as investors eye US inflation data

(Sharecast News) - London stocks edged lower in early trade on Tuesday as investors eyed the latest US inflation reading, a policy announcement from the European Central Bank and the start of earnings season across the pond later in the week. At 0825 BST, the FTSE 100 was down 0.2% at 7,930.05.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said equity markets were entering "a holding-pattern scenario ahead of tomorrow's US inflation data".

She continued: "With relatively limited corporate news to change the tide, investors are more concerned with macro events this week. Expectations for how much the Federal Reserve will cut rates this year have fallen to their lowest level since October, following unprecedented labour market figures last week.

"Interest rate-sensitive treasury yields have edged higher as a result, and the overall mood across US and European markets is very much a cautious wait-and-see approach today."

The European Central Bank's rate decision is due on Thursday, while US earnings season will kick off on Friday.

On home shores, data out earlier showed that the unusually early Easter holidays gave the retail sector a big boost in March.

According to the British Retail Consortium-KPMG Retail Sales Monitor, total retail sales rose by 3.5% year-on-year last month, accelerating from the 1.1% annual rise registered in February, above the three-month average growth rate of 2.1% and the 12-month average growth of 2.9%.

March also saw the strongest growth rate since August 2023, with sales rising at a faster rate than inflation for the first time in more than two years, according to Linda Ellett, UK head of consumer markets at KPMG's Leisure & Retail division.

Over the three months to March, food sales were 6.8% higher than a year before, while non-food sales were down 1.9% - both in-store and online non-food sales registered a decline.

"High street sales growth was driven by food and drink, health and beauty and keen gardeners who headed outside to enjoy the first days of spring. There were also some signs of improvement with more categories starting to see positive sales growth in March for the first time in months," Ellett said.

However, Ellett said the UK retail remains a challenging environment, despite a recent improvement in macro conditions. "As April signals big increases in the sector's cost base - through the rise in minimum wage rates and business rate hikes for the larger high street brands - retailers will be hoping that the bounce back of March sales is more than just an Easter blip," she said.

"Economic indicators are heading in the right direction with inflationary pressures easing and interest rates having potentially peaked, however consumer confidence remains fragile, and households continue to keep a close eye on where their tight budgets are being spent."

In equity markets, Halma was the standout gainer on the FTSE 100 after an upgrade to 'overweight' from 'equalweight' at Barclays.

Oil giant BP ticked up after saying it expects first-quarter upstream production to be higher than the previous three months.

Elsewhere, HSBC Holdings was just a touch firmer after saying it was selling its Argentina business to Grupo Financiero Galicia for $550m and will take a $1bn pre-tax loss in the process as it continues to pivot its operations towards Asia.

Fund, corporate and private client services group JTC rallied as it raised its growth guidance for the next three years after smashing its targets in 2023, helped by a record amount of new business wins.

Imperial Brands was trading down even as it said it was on track to meet its half-year and full-year financial guidance.

Student accommodation manager and developer Unite was also in the red despite saying it was still confident of hitting rental growth targets for the next academic year while property values held more or less stable in the first quarter.

Market Movers

FTSE 100 (UKX) 7,930.05 -0.17% FTSE 250 (MCX) 19,787.42 -0.34% techMARK (TASX) 4,432.20 -0.20%

FTSE 100 - Risers

Halma (HLMA) 2,293.00p 1.96% Fresnillo (FRES) 565.00p 1.62% Rio Tinto (RIO) 5,257.00p 1.41% BP (BP.) 515.20p 1.04% Anglo American (AAL) 2,177.00p 1.02% Imperial Brands (IMB) 1,745.00p 0.72% Antofagasta (ANTO) 2,225.00p 0.45% Beazley (BEZ) 678.50p 0.44% Prudential (PRU) 722.20p 0.31% Intertek Group (ITRK) 4,842.00p 0.29%

FTSE 100 - Fallers

St James's Place (STJ) 421.60p -1.54% Flutter Entertainment (DI) (FLTR) 15,340.00p -1.26% Kingfisher (KGF) 241.90p -1.10% Reckitt Benckiser Group (RKT) 4,215.00p -1.06% Taylor Wimpey (TW.) 131.95p -1.05% Auto Trader Group (AUTO) 686.00p -1.04% Vodafone Group (VOD) 67.84p -0.96% M&G (MNG) 207.20p -0.96% Persimmon (PSN) 1,269.00p -0.90% Rightmove (RMV) 530.00p -0.90%

FTSE 250 - Risers

W.A.G Payment Solutions (WPS) 68.60p 2.08% PureTech Health (PRTC) 219.50p 1.86% Chemring Group (CHG) 366.00p 1.53% Genus (GNS) 1,766.00p 1.49% JTC (JTC) 836.00p 1.46% TUI AG Reg Shs (DI) (TUI) 684.50p 1.41% Hochschild Mining (HOC) 147.40p 1.38% Aston Martin Lagonda Global Holdings (AML) 169.50p 1.32% Murray International Trust (MYI) 250.50p 1.21% BlackRock Greater Europe Inv Trust (BRGE) 640.00p 1.11%

FTSE 250 - Fallers

Ninety One (N91) 165.00p -4.24% Bridgepoint Group (Reg S) (BPT) 247.40p -2.98% Primary Health Properties (PHP) 89.05p -2.78% Telecom Plus (TEP) 1,618.00p -2.53% PPHE Hotel Group Ltd (PPH) 1,400.00p -2.44% Discoverie Group (DSCV) 738.00p -2.38% Sirius Real Estate Ltd. (SRE) 94.00p -2.34% AO World (AO.) 102.20p -2.29% Dunelm Group (DNLM) 1,071.00p -2.19% Indivior (INDV) 1,649.00p -2.14%