London midday: Stocks turn lower as investors digest inflation data; miners weigh
London stocks reversed small gains to trade a touch lower by midday on Tuesday, with losses in the mining sector holding back the main index and offsetting any benefit from a fall in the pound as data showed UK inflation fell slightly last month to give the Bank of England more breathing space.
The FTSE 100 was down 0.2% to 7,757.65, while the pound was off 0.3% against the dollar at 1.3754 and 0.1% higher versus the euro at 1.1253.
The consumer price index for December fell to an annual rate of 3.0% from 3.1% the previous month, as forecast by economists. On a monthly basis, CPI rose 0.4%, as expected, after a 0.3% increase a month earlier.
Core CPI, which excluded more volatile prices such as food and energy, rose 2.5% year-on-year, less than the 2.6% expected and the prior month's reading of 2.7%.
The Office for National Statistics said December's growth of CPIH, its preferred measure of inflation as it includes owner-occupiers’ housing costs, fell to 2.7%, in line with the consensus forecast, and down from 2.8% a month before.
Analyst David Morrison at GKFX said this would take the pressure off the Bank of England, where governor Mark Carney will still have to send an explanatory open letter to the Chancellor next month after headline CPI broke above 3.1% in November, more than one percentage point above the BoE's 2% target.
The pound fell slightly on data's suggestion that UK inflation may have peaked, Morrison said. "The pound surged higher at the end of last week in a move which saw the GBPUSD break above resistance around 1.3600 to hit its highest level since its post-referendum sell-off in June 2016. If it manages to hold on to recent gains and consolidate above 1.3600 (now support) then sterling bulls see 1.4000 as an achievable upside target."
Miners were the worst performers on the FTSE 100 as copper and iron ore prices fell following recent gains, with Antofagasta, Anglo American and BHP Billiton all in the red.
Anglo-Australian miner Rio Tinto slipped despite saying it managed to hit its iron ore export targets after a solid showing in the final quarter where it shipped a record 90m tonnes, up from 85.8m tonnes in the previous three months.
Troubled doorstep lender Provident Financial retreated as it reported a loss from its home credit business at the larger end of expectations and said its Vanquis Bank took 20% fewer new customer bookings in the fourth quarter compared to last year.
Oil giant BP gushed lower after saying it expects to take a post-tax non-operating charge of around $1.7bn in the fourth quarter as part of the class action settlement of the disastrous Deepwater Horizon oil well spill in the US in 2010.
Shares in Capita slumped after the FTSE 250 outsourcer said Prudential was transferring the administration of its life and pensions business to a new supplier in July as part of a wider customer and technology transformation programme.
Hospital group Spire Healthcare lost ground as it confirmed its previous guidance for 2017, while homeware retailer Dunelm reversed earlier after saying comparable sales in the second quarter rose 3.4% thanks to a solid performance from the online segment.
Coach operator National Express fell despite saying it expects changes to the US tax system that came into effect at the beginning of this month to reduce its effective tax rate to the low 20s from the high 20s.
On the upside, high street baker Greggs advanced after saying full year total sales were up by a tasty 7.4% and company-managed shop like-for-like sales grew by 3.7%.
Halma ticked up after saying it expects the recently enacted US tax cuts and to positively impact its future US after tax adjusted earnings and provide a £15m non-cash credit the year to March 2018.
Retailer JD Sports surged after saying it expects pre-tax profit for the year to 3 February 2018 to be ahead of market expectations following a strong second half.
Estate agent Savills was in the black after saying it had a stronger-than-expected finish to 2017 and now sees underlying results for the year to the end of December ahead of its previous expectations.
Ashmore, the emerging markets focused asset manager, rallied after it posted a jump in assets under management for the three months to the end of December amid strong net inflows.
RPC and Inchcape were hit by downgrades to 'hold' at Berenberg, but Primark owner Associated British Foods and Hunting were sharply higher after upgrades at Barclays and Morgan Stanley, respectively.
Market Movers
FTSE 100 (UKX) 7,757.65 -0.15%
FTSE 250 (MCX) 20,842.45 0.05%
techMARK (TASX) 3,543.48 0.08%
FTSE 100 - Risers
Johnson Matthey (JMAT) 3,289.00p 2.49%
Smurfit Kappa Group (SKG) 2,586.00p 1.73%
Just Eat (JE.) 803.60p 1.72%
Admiral Group (ADM) 1,900.00p 1.69%
NMC Health (NMC) 3,078.00p 1.52%
Micro Focus International (MCRO) 2,244.00p 1.49%
Mondi (MNDI) 1,958.00p 1.42%
Barclays (BARC) 198.24p 1.38%
Associated British Foods (ABF) 2,864.00p 1.27%
Vodafone Group (VOD) 230.90p 1.27%
FTSE 100 - Fallers
Fresnillo (FRES) 1,390.00p -2.66%
Antofagasta (ANTO) 1,011.00p -2.65%
Anglo American (AAL) 1,738.40p -2.53%
BHP Billiton (BLT) 1,620.20p -2.40%
BP (BP.) 521.60p -2.08%
Rio Tinto (RIO) 4,090.50p -1.97%
Randgold Resources Ltd. (RRS) 7,222.00p -1.79%
Glencore (GLEN) 402.90p -1.62%
ITV (ITV) 169.40p -1.48%
Pearson (PSON) 720.80p -1.18%
FTSE 250 - Risers
JD Sports Fashion (JD.) 386.90p 5.85%
Hunting (HTG) 641.00p 5.00%
Kier Group (KIE) 1,157.00p 3.30%
UBM (UBM) 771.50p 3.21%
Bodycote (BOY) 1,011.00p 2.80%
Greggs (GRG) 1,340.00p 2.68%
Superdry (SDRY) 1,874.00p 2.46%
CLS Holdings (CLI) 232.83p 2.34%
Savills (SVS) 987.00p 2.23%
TI Fluid Systems (TIFS) 250.40p 2.04%
FTSE 250 - Fallers
Provident Financial (PFG) 830.00p -9.78%
Capita (CPI) 392.60p -6.75%
Dunelm Group (DNLM) 668.00p -4.71%
Hochschild Mining (HOC) 250.10p -3.66%
Polymetal International (POLY) 891.40p -3.26%
Vedanta Resources (VED) 926.00p -2.94%
Spire Healthcare Group (SPI) 240.40p -2.51%
Kaz Minerals (KAZ) 942.00p -2.46%
Marshalls (MSLH) 438.40p -2.32%
Serco Group (SRP) 103.00p -2.28%