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17 Feb 2021 | 11:07

London midday: Stocks a little weaker as inflation ticks higher

(Sharecast News) - London stocks were still a little weaker by midday Wednesday as investors mulled an unexpected uptick in UK inflation. The FTSE 100 was 0.3% lower at 6,732.27, while sterling was down 0.3% against the dollar at 1.3858.

Data released earlier by the Office for National Statistics showed that consumer price inflation rose to 0.7% in January from 0.6% in December, with food and household goods the main drivers. Analysts had been expecting a nudge lower to 0.5%.

Core inflation - which strips out volatile food and energy prices - held steady at 1.4%, versus consensus expectations of 1.3%.

ONS deputy national statistician for Economic Statistics, Jonathan Athow, said: "Inflation rose slightly in January, with food prices increasing. Household goods also pushed up prices with less discounting this year on items such as bedding and settees.

"However, there were widespread January sales, with particular price cuts for clothing and footwear."

IG market analyst Joshua Mahony said: "Market sentiment remains underpinned by vaccination, reopening, and stimulus expectations, yet we are seeing an element of fear creep in as inflation expectations impact the potential monetary policy outlook.

"Inflation concerns are starting to rear their head ahead of a year that is expected to bring economic growth and importantly prices roaring back to life. The pandemic has notably had deflationary effects on a global scale, with rock-bottom energy prices providing the bedrock to a consumption driven decline in prices. However, with crude oil hitting a one-year high today, it is clear that transportation costs are on the rise even ahead of the grand reopening process expected in the second-quarter."

In equity markets, Hargreaves Lansdown was under the cosh after Peter Hargreaves sold £300m of shares, leaving him owning less than 20% of the company he co-founded 30 years ago.

British American Tobacco was also in the red as it said full-year profits rose but the figure fell short of analysts' expectations.

On the upside, Rio Tinto gained after it delivered a record dividend to shareholders as soaring iron ore prices last and demand from China drove full-year profits sharply higher. Miners more generally were on the rise.

Elsewhere, Ferrexpo rallied after an initiation at 'buy' at Peel Hunt, while Shaftesbury and Workspace were both boosted by upgrades to 'buy' at Jefferies.

Johnson Matthey was lifted by an upgrade to 'reduce' at AlphaValue.

Market Movers

FTSE 100 (UKX) 6,732.27 -0.25% FTSE 250 (MCX) 21,254.73 -0.75% techMARK (TASX) 4,136.64 -0.43%

FTSE 100 - Risers

Antofagasta (ANTO) 1,703.50p 4.13% B&M European Value Retail S.A. (DI) (BME) 606.00p 2.71% Rio Tinto (RIO) 6,414.00p 2.46% BP (BP.) 283.70p 1.98% Royal Dutch Shell 'B' (RDSB) 1,396.00p 1.96% Hikma Pharmaceuticals (HIK) 2,375.00p 1.67% Royal Dutch Shell 'A' (RDSA) 1,452.20p 1.57% Rolls-Royce Holdings (RR.) 101.45p 1.51% Glencore (GLEN) 291.15p 1.09% Pershing Square Holdings Ltd NPV (PSH) 2,745.00p 0.92%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 1,540.50p -6.81% British American Tobacco (BATS) 2,634.50p -4.15% M&G (MNG) 191.95p -2.71% St James's Place (STJ) 1,217.00p -2.29% Taylor Wimpey (TW.) 162.25p -2.02% Ocado Group (OCDO) 2,610.00p -1.92% NATWEST GROUP PLC ORD 100P (NWG) 177.90p -1.90% Barratt Developments (BDEV) 681.60p -1.79% Polymetal International (POLY) 1,580.50p -1.77% Persimmon (PSN) 2,769.00p -1.74%

FTSE 250 - Risers

Indivior (INDV) 147.70p 3.94% Ferrexpo (FXPO) 344.00p 2.81% Workspace Group (WKP) 742.50p 2.63% Shaftesbury (SHB) 608.50p 2.53% Vietnam Enterprise Investments (DI) (VEIL) 619.00p 1.98% Just Group (JUST) 85.80p 1.90% Vivo Energy (VVO) 87.40p 1.75% TP ICAP (TCAP) 207.00p 1.67% FirstGroup (FGP) 83.95p 1.63% Petrofac Ltd. (PFC) 134.85p 1.54%

FTSE 250 - Fallers

Beazley (BEZ) 348.20p -3.76% Watches of Switzerland Group (WOSG) 606.00p -3.66% AJ Bell (AJB) 438.50p -3.63% Investec (INVP) 207.60p -3.35% Hammerson (HMSO) 22.10p -3.28% Ashmore Group (ASHM) 457.20p -3.22% Lancashire Holdings Limited (LRE) 662.00p -2.93% Quilter (QLT) 152.95p -2.89% Bellway (BWY) 2,955.00p -2.86% Dunelm Group (DNLM) 1,276.00p -2.74%
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