|CATEGORY: MARKET REPORT - MIDDAY
Tue 30 May 2023
LONDON (SHARECAST) - (Sharecast News) - London stocks were still in the red by midday on Tuesday amid continued uncertainty over whether a US debt default will be averted, and as data showed that shop price inflation in the UK edged higher in May.
The FTSE 100 was down 0.4% at 7,595.21.
Russ Mould, investment director at AJ Bell, said: "A deal may have been done between President Biden and Republican Speaker of the House Kevin McCarthy but there was still a sense of unease around the US debt ceiling as markets await sign-off from Congress.
"Disquiet from various wings of the Democratic and Republican parties was enough to suggest that the agreement cannot be declared a slam dunk just yet, even if an eventual sign-off is by far the likeliest outcome."
On home shores, the latest BRC-NielsenIQ index showed that shop price inflation nudged up in May despite some food price rises starting to slow. Annual shop price inflation accelerated to a fresh high of 9.0% in May, from 8.8% in April.
Within that, food price inflation - which has reached record highs in recent months - nudged marginally lower, falling to 15.4% from 15.7% a month previously. Non-food inflation edged higher, however, to 5.8% from 5.5%.
Fresh food inflation was 17.2%, still at historic highs but down on April's 17.8%. In contrast, ambient food inflation rose to 13.1% from 12.9%, with the price of coffee and chocolate rising in response to higher global costs for both commodities.
Helen Dickinson, chief executive of the British Retail Consortium, said: "While overall shop price inflation rose slightly in May, households will welcome food inflation beginning to fall.
"The slow in inflation was largely driven by lower energy and commodity costs starting to filter through to the lower price of some staples, including butter, milk, fruit and fish.
"Fierce competition between supermarkets has helped keep British food among the cheapest of the large European economies."
Elsewhere, a closely-watched survey showed that business optimism across the service sector held up in May despite ongoing pressure on both costs and profits.
According to the latest quarterly service sector survey from the CBI, cost pressures continued to build in business and professional services - with the net balance rising to 61% from 58% - while profitability fell for the sixth consecutive quarter.
There was also a sixth consecutive fall in profitability in consumer services, and cost growth also accelerated, to 81% from 73%, the second fastest rate of growth on record. Both sub-sectors saw business volumes decline during the quarter, although the fall was more sharply felt in consumer services.
But volumes were forecast to return to growth in business and professional services in the next quarter, and to stabilise in consumer services
And overall, sentiment about the general business situation was broadly unchanged in business and professional services in the three months to May, with a net balance of -2%. It was also largely unchanged in consumer services, with a net balance of 3%.
In equity markets, Ocado slumped as the online supermarket looked set for demotion from the FTSE 100.
Consumer goods giant Unilever fell as it said chief financial officer Graeme Pitkethly plans to retire by the end of May 2024.
Rolls-Royce and BAE Systems were weaker after India filed a criminal complaint against the companies for "criminal conspiracy" in the procurement and licensed manufacturing of 123 advanced jet trainers.
Dr Martens was under the cosh after RBC Capital Markets downgraded shares of the iconic bootmaker to 'sector perform' from 'outperform'.
On the upside, advertising giant WPP rallied after it signed a content engine deal with Nvidia.
RHI Magnesita surged after Ignite Luxembourg Holdings, which is indirectly managed by Rhone Holdings, offered to buy a 20% stake in the company at 2,850p per share in cash - a near-40% premium to the closing share price on Friday.
Hunting gushed higher as the energy services group lifted guidance for 2023 after winning a new contract worth up to £91m with Cairn Oil and Gas, Vedanta.
FTSE 100 (UKX) 7,595.21 -0.42%
FTSE 250 (MCX) 18,852.65 0.31%
techMARK (TASX) 4,578.07 -0.29%
FTSE 100 - Risers
Endeavour Mining (EDV) 2,060.00p 2.49%
Kingfisher (KGF) 235.80p 1.99%
Frasers Group (FRAS) 684.50p 1.86%
BT Group (BT.A) 146.50p 1.70%
Beazley (BEZ) 618.50p 1.56%
Aviva (AV.) 407.20p 1.47%
JD Sports Fashion (JD.) 153.15p 1.42%
Melrose Industries (MRO) 481.50p 1.37%
WPP (WPP) 884.20p 1.28%
Anglo American (AAL) 2,346.00p 1.19%
FTSE 100 - Fallers
Ocado Group (OCDO) 398.40p -2.11%
Unilever (ULVR) 4,090.00p -1.89%
Shell (SHEL) 2,309.50p -1.83%
Abrdn (ABDN) 198.20p -1.78%
Rolls-Royce Holdings (RR.) 146.60p -1.64%
BP (BP.) 470.20p -1.40%
British American Tobacco (BATS) 2,636.50p -1.25%
Entain (ENT) 1,385.50p -1.18%
HSBC Holdings (HSBA) 603.70p -1.16%
Croda International (CRDA) 6,174.00p -1.03%
FTSE 250 - Risers
RHI Magnesita N.V. (DI) (RHIM) 2,512.00p 22.54%
Hunting (HTG) 227.50p 12.90%
Dechra Pharmaceuticals (DPH) 3,272.00p 4.20%
FirstGroup (FGP) 117.00p 3.45%
Direct Line Insurance Group (DLG) 169.95p 2.91%
Bytes Technology Group (BYIT) 475.20p 2.86%
Molten Ventures (GROW) 292.00p 2.60%
Allianz Technology Trust (ATT) 262.50p 2.54%
Darktrace (DARK) 266.50p 2.50%
Baltic Classifieds Group (BCG) 165.00p 2.48%
FTSE 250 - Fallers
Dr. Martens (DOCS) 150.10p -6.94%
QinetiQ Group (QQ.) 356.40p -3.78%
Investec (INVP) 411.90p -2.53%
Synthomer (SYNT) 96.55p -1.93%
Aston Martin Lagonda Global Holdings (AML) 259.40p -1.89%
Bank of Georgia Group (BGEO) 3,125.00p -1.73%
Diversified Energy Company (DEC) 84.30p -1.69%
Capricorn Energy (CNE) 194.20p -1.62%
Apax Global Alpha Limited (APAX) 165.20p -1.55%
Mitchells & Butlers (MAB) 204.60p -1.54%