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London open: Stocks fall ahead of US inflation reading
London stocks fell in early trade on Wednesday, taking their cue from a downbeat session on Wall Street as investors eyed the latest US inflation reading.
At 0850 GMT, the FTSE 100 was down 0.3% at 8,254.31.
The US consumer price index for November is due at 1330 GMT.
Kathleen Brooks, research director at XTB, said: “Today’s US CPI print for November is pivotal for markets. It is expected to show a 0.3% MoM gain for headline inflation, the annual rate is expected to rise to 2.7% from 2.6%, while the annual rate of core inflation is expected to remain at 3.3%.
“We do not think that the outcome of this report will detract from the Federal Reserve cutting interest rates next week, there is currently an 86% chance of a rate cut priced in by the Fed Fund Futures market.
“However, a hot inflation print, that pushes headline inflation well above estimates, could lead to questions being asked about the wisdom of cutting interest rates when inflation remains high, and before the new Trump administration comes in with policies that could trigger even more price pressure down the line.”
In equity markets, BA and Iberia owner IAG flew higher as Deutsche Bank upgraded the shares to ‘buy’ from ‘hold’ and hiked the price target to 400p from 215p.
“With fuel set to be tailwind, we see scope for another year of ahead-of-consensus earnings growth in 2025,” Deutsche said.
Consumer goods giant Reckitt Benckiser was also a high riser after an upgrade to ‘buy’ from ‘hold’ at HSBC.
British American Tobacco ticked up after confirming it remains on track to meet its 2024 financial guidance, driven by second-half acceleration from investments in US commercial actions, new category innovations, and inventory adjustments.
Kainos surged as it announced that chief executive Russell Sloan was stepping down with immediate effect and that long-standing CEO Brendan Mooney was returning to the role.
Endeavour Mining gained as it said it would conduct a definitive feasibility study on its Assafou-Dibibango gold project in Côte d’Ivoire after preliminary assessment met strategic targets and confirmed its potential to be a tier one asset.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
International Consolidated Airlines Group S.a. | +2.23% | +6.30 | 288.30 |
| 2 |  |
Banco Santander S.a. | +1.98% | +7.50 | 386.00 |
| 3 |  |
Reckitt Benckiser Group Plc | +1.34% | +63.00 | 4,766.00 |
| 4 |  |
Pearson Plc | +0.97% | +12.00 | 1,249.50 |
| 5 |  |
Bae Systems Plc | +0.89% | +10.50 | 1,189.50 |
| 6 |  |
British American Tobacco Plc | +0.74% | +22.00 | 2,991.00 |
| 7 |  |
Intercontinental Hotels Group Plc | +0.59% | +58.00 | 9,816.00 |
| 8 |  |
Rentokil Initial Plc | +0.59% | +2.40 | 409.50 |
| 9 |  |
Prudential Plc | +0.57% | +3.80 | 675.40 |
| 10 |  |
Natwest | +0.49% | +2.00 | 412.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ashtead Group Plc | -5.86% | -316.00 | 5,076.00 |
| 2 |  |
Wheaton Precious Metals Corp. | -2.60% | -130.00 | 4,870.00 |
| 3 |  |
Ferguson Enterprises Inc. | -1.86% | -290.00 | 15,300.00 |
| 4 |  |
South32 Limited | -1.80% | -3.20 | 174.60 |
| 5 |  |
Gen.acc.8se.pf | -1.46% | -2.00 | 135.00 |
| 6 |  |
Smith & Nephew Plc | -1.43% | -14.20 | 978.20 |
| 7 |  |
Segro Plc | -1.22% | -9.00 | 725.80 |
| 8 |  |
Investec Plc | -1.18% | -7.00 | 586.50 |
| 9 |  |
Rio Tinto Plc | -1.04% | -53.00 | 5,050.00 |
| 10 |  |
Glencore Plc | -0.97% | -3.75 | 382.15 |
US close: Dow Jones delivers fourth-straight daily loss
Major indices closed lower on Tuesday as both the S&P 500 and Nasdaq Composite retreated from their record highs in the previous session.
At the close, the Dow Jones Industrial Average was down 0.35% at 44,247.83, while the S&P 500 lost 0.30% to 6,034.91 and the Nasdaq Composite saw out the session 0.25% weaker at 19,687.24.
The Dow opened 154.10 points lower on Tuesday, extending losses recorded in the previous session.
Stocks lacked direction on Tuesday as traders continued to hold out for tomorrow’s consumer price index report, which comes just a week before the Federal Reserve’s next interest rate decision.
On Tuesday’s macro slate, the National Federation of Independent Business‘ small optimism index jumped to 101.7 in November for the highest reading since June 2021, up from 93.7 in October and ahead of expectations for a reading of 94.2.
In the corporate space, software giant Oracle traded lower after its Q2 earnings and revenue fell short of expectations, and the group issued disappointing guidance, while GameStop reported a surprise Q3 profit despite a 20% drop in sales.
Wednesday newspaper round-up: Avanti West Coast, car finance scandal, Boots
Train managers at Avanti West Coast are to strike in a dispute over rest day working. Members of the Rail, Maritime and Transport union plan to walk out on 22, 23 and 29 December. Union members voted overwhelmingly against the company’s proposals. – Guardian
Britain’s car finance scandal could end up being as big as the payment protection insurance (PPI) mis-selling saga, which cost UK banks £50bn, the City regulator’s top lawyer has admitted. Stephen Braviner Roman, the Financial Conduct Authority’s general counsel and executive director in charge of legal affairs, said October’s shock court of appeal ruling into car finance commission arrangements vastly expanded the scope of potential consumer compensation. – Guardian
The US owner of Boots is in talks with an American private equity giant about a potential takeover, in a move that is expected to trigger a fresh auction of the British high street chain. Walgreens Boots Alliance, which has owned the UK chemist since 2014, is reportedly in discussions with Sycamore Partners about a deal that could value the company at as much as $10bn (£7.8bn). – Telegraph
The Financial Conduct Authority has warned MPs that a push for the regulator to encourage growth must not encourage a “race to the bottom” and that parliament must be prepared to stand by the revised remit when “more things go wrong”. Nikhil Rathi, the authority’s chief executive, and Ashley Alder, its chairman, told the Treasury committee about the challenges the regulator would face after being asked by the government to do more to promote economic growth alongside its objectives to protect consumers and market integrity. – The Times
A settlement has been agreed between Shell and Greenpeace after the environmental charity occupied one of the multinational’s vessels to protest against its North Sea oil drilling plans. The campaign group has agreed to donate £300,000 to the Royal National Lifeboat Institute, after the oil major claimed that it had incurred significant costs when six Greenpeace activists boarded a ship carrying a floating production, storage and offloading vessel last year, as it was en route to a shipyard in Norway. – The Times
