London close: Stocks fall as US inflation beats forecasts

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The FTSE100 ended the session down 0.74% at 7,156.37, and the FTSE250 was down 0.76% at 18,711.36.

The pound was in mixed condition, last trading 0.4% against the dollar at $1.1937, as it weakened 0.17% against the euro to change course. hands at €1.1825.

“The lingering theme of weak equities and dollar dominance continues to play out in the wake of the latest US inflation data,” said GI senior market analyst Joshua Mahony.

“While markets were expecting prices to rise for June, the actual figure of 9.1% represents a whopping 40-year high that does little to inspire confidence that things are about to happen. to change.

“With headline CPI jumping 1.3% in the month alone, it’s perhaps unsurprising to see market prices around an oversized 100 basis point rate hike gain traction. .”

Mahony said that usually such a hike would be unprecedented, but the Bank of Canada implemented its own 100 basis point rate hike this afternoon.

“Higher rates, steep cost increases and lagging wage growth create an environment that will be challenging for businesses and consumers.

“How long this period of suffering will last is the million dollar question that will continue to dampen investment decisions.”

In economic news, US inflation jumped to 9.1% in June, ahead of expectations of an 8.8% print at the highest level seen since November 1981.

According to the Bureau of Labor Statistics, the June reading, up from 8.6% in May, came as energy prices rose 41.6% last month, the highest since April. 1980.

Food costs jumped 10.4%, the highest since February 1981, with door-to-door food costs jumping 12.2%, the biggest 12-month increase since April 1979.

Increases were also seen in the cost of housing, up 5.6%, household furnishings and operations, up 9.5%, new vehicles, up 11.4%, used cars and trucks, up 1.7%, and air fares, up 34.1%.

At the core level, which excludes food and energy, inflation rose to 5.9% – slightly below the 6% clip in May but above forecasts for a reading of 5.7% .

On domestic shores, official data showed the UK economy grew at a faster pace than expected in May.

According to the Office for National Statistics, GDP rose 0.5% in May, following a 0.2% decline in April, which was revised up from an earlier estimate for a decline of 0. 3%.

Analysts were expecting an increase of only 0.1% for the month of May.

In the three months to May, GDP grew 0.4% and 3.5% in the year to May.

“The May GDP data did not change our expectations of a contraction in the second quarter,” said Gabriella Dickens, senior UK economist at Macroeconomics Hall of Fame.

“We estimate that the additional bank holiday for the Queen’s Jubilee, which will be treated as a special event by the ONS and will therefore depress the seasonally adjusted data, will result in a drop in GDP of around 1.5% by month to month in June.

“Furthermore, low consumer confidence suggests that people probably haven’t borrowed enough or reduced their savings enough to sustain real spending as their real incomes have fallen.”

Elsewhere, UK imports continue to grow faster than exports, widening the trade deficit.

According to the Office for National Statistics, imports of goods rose by £20.2bn or 14.6% in the three months to May 2022, while exports rose by £10.7bn or 12.6%.

As a result, the goods trade deficit, excluding volatile precious metals, widened by £9.5bn to £63.1bn in the three months to May 2022 compared to the previous three months. .

Central banks were in focus overnight after policymakers in South Korea and New Zealand met market expectations with 50 basis point hikes.

The Bank of Korea confirmed its largest rate hike since its current framework began in 1999, raising its benchmark rate to 2.25%.

Further south, the Reserve Bank of New Zealand made its sixth consecutive hike to raise the key spot rate to 2.5%, while sticking to its plans for further hikes.

In shares, maritime services group Clarkson closed up 9.14% after saying it now expects to report unaudited underlying pre-tax profits of at least £42.0 million for the six months to June 30.

He added that his first-half performance had been “strong” across all divisions, with his brokerage unit “particularly strong”.

precious metal miners Fresnillo and Endeavor Mining were ahead 3.85% and 4.12% respectively, catching a drop in the dollar and leading to small gains in gold and silver prices after the release of the June consumer price report.

On the downside, real estate developer Rural partnerships was down 2.78%, after it was revealed that chairman John Martin had decided to step down from all of his positions at the company with immediate effect.

Countryside said senior independent director Douglas Hurt was to take over as chairman, while Amanda Burton would replace Hurt, effective immediately.

The FTSE 250-listed company also reiterated its full-year adjusted operating profit guidance for the twelve months ending September 30.

Commercial broadcasters also fell TVI and the telecom giant LV Groupby 1.55% and 1.65% respectively, after the competition watchdog launched an investigation into potentially cartel-like behavior by a number of UK sports broadcasters.

The Competition and Markets Authority said it believed there were “reasonable grounds” to suspect that ITV, along with BT, Comcastowned by Sky, and Endeavor Group IMG Media division, may have breached competition rules by buying independent services in the UK.

“The investigation relates to the purchase by these companies of independent services which support the production and distribution of sports content in the UK,” the CMA said.

Elsewhere, technology services company Computer center was down 1.77% after it announced the acquisition of US value-added reseller Business IT Source for an undisclosed amount.

Computacenter said BITS’ existing management team would remain to lead the company as a separate operating unit within its US division, as part of an effort to maximize its growth opportunities.

JD Wetherspoon fell 8.33% after it said sales in the first 11 weeks of its fourth quarter were 0.4% lower than the same pre-pandemic period in 2019 – an improvement from the previous quarter, when the sales were down 4%.

Pub operator FTSE 250 said sales of spirits were up 4.4%, cocktails up 18.6%, food up 2.1%, hotel rooms up by 8.4% and fruit machines ahead by 16.6%, while draft beers, lagers and ciders – historically the biggest contributors to pub sales – were 8% lower than in 2019 .

Owner of British Airways and Iberia AGI fell 4.02%, a day after Heathrow Airport capped daily passenger numbers at 100,000 due to staff shortages, forcing the cancellation of 1,000 summer flights.

Low-cost carriers were also in the red, with easyJet down 3.63% and Wizz Air 4.81% less.

Reporting by Josh White on Sharecast.com. Additional reporting by Alexander Bueso, Iain Gilbert and Abigail Townsend.

market movers

FTSE 100 (UKX) 7,156.37 -0.74%
FTSE 250 (MCX) 18,711.36 -0.76%
techMARK (TASX) 4,285.23 -0.97%

FTSE 100 – Risers

Fresnillo (FRES) 684.60p 3.85%
Endeavor Mining (EDV) 1,669.00p 1.66%
SEGRO (SGRO) 1,031.50p 1.48%
Land Title Group (LAND) 671.20p 1.33%
Harbor Energy (HBR) 328.00p 1.17%
Diageo (DGE) 3,621.50p 0.67%
British Land Company (BLND) 457.40p 0.64%
United Utilities Group (UU.) 1,047.50p 0.58%
Bunzl (BNZL) 2,903.00p 0.55%
Centrica (NAC) 84.36p 0.48%

FTSE 100 – Slaughterhouses

Abdn (ABDN) 154.15p -5.02%
Mondi (MNDI) 1,427.00p -4.20%
International Consolidated Airlines Group SA (CDI) (IAG) 105.98p -4.02%
Smith (DS) (SMDS) 277.10p -3.62%
GSK (GSK) 1,695.00p -2.73%
Automotive Traders Group (AUTO) 570.80p -2.59%
Ocado Group (OCDO) 813.00p -2.24%
Hikma Pharmaceuticals (HIK) 1,670.50p -2.14%
Ashtead Group (AHT) 3,722.00p -2.13%
Prudential (PRU) 987.60p -2.12%

FTSE 250 – Risers

Johnson Matthey (JMAT) 2,100.00p 11.41%
Clarkson (CKN) 3,225.00p 9.14%
Dark Trace (DARK) 336.80p 4.56%
Trainline (TRN) 365.90p 3.07%
Drax Group (DRX) 712.50p 2.52%
Tyman (TYMN) 254.50p 2.21%
Page group (PAGE) 438.60p 2.00%
Balanced Commercial Property Trust Limited (BCPT) 112.60p 1.81%
Energian (ENOG) 1,033.00p 1.77%
Safestore Holdings (SAFE) 1,075.00p 1.61%

FTSE 250 – Slaughterhouses

Wetherspoon (JD) (JDW) 577.50p -8.33%
Aston Martin Lagonda Global Holdings (AML) 402.20p -6.57%
Essentra (ESNT) 235.00p -5.81%
Mitchells & Butlers (MAB) 170.90p -5.58%
Wizz Air Holdings (WIZZ) 1,782.50p -4.81%
Balfour Beatty (BBY) 257.20p -4.10%
Playtech (PTEC) 516.00p -4.09%
Financial foresight (PFG) 187.70p -3.89%
4Print Group (FOUR) 2,365.00p -3.86%
HGCapital Trust (HGT) 312.50p -3.85%

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