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London open: Stocks fall as investors eye eurozone inflation data
London stocks fell in early trade on Tuesday as investors mulled the latest shop price inflation data and looked ahead to eurozone inflation figures later in the day.
At 0840 BST, the FTSE 100 was down 0.6% at 8,122.15.
Matt Britzman, equity analyst at Hargreaves Lansdown, said: “Some weakness has crept into the FTSE 100 this morning on a relatively quiet day for corporate news.
“Markets are gearing up eurozone inflation data and unemployment figures for the bloc. Expectations are that the European Central Bank will keep things as they are, with no real urgency to cut rates further.”
On home shores, the latest shop price index from the British Retail Consortium and NielsenIQ showed that annual growth in prices at UK tills slowed significantly in June.
Shop price inflation eased to a year-on-year rate of just 0.2% last month, down from 0.6% in May and the lowest rate of price growth since October 2021.
Non-food prices were down 1% on last year, with deflation accelerating from the -0.8% level reported in May, while food inflation slowed to 2.5% from 3.2% a month earlier.
Slowdowns were reported in both fresh food (1.5%, down from 2.0%) and ambient food (3.9%, down from 4.8%).
The BRC said the deceleration in price growth was a result of heavy investments by retailers to improve operations and supply chains during the height of the cost-of-living crisis, to mitigate the impact of input cost pressures.
“This is clearly paying off, with shop prices having risen just 0.2% over the past 12 months,” said the BRC’s chief executive Helen Dickinson.
“Whoever wins Thursday’s election will benefit from the work of retailers to cut their costs and prices, easing the cost of living for millions of households.
“The last few years should serve as a warning that where business costs rise significantly, consumer prices are forced up too. The next government must address some of the major cost burdens weighing down the retail industry, including the broken business rates system, and inflexible apprenticeship levy.”
In equity markets, Sainsbury’s was under the cosh as it reported a slowdown in first-quarter like-for-like sales growth on the back of declines in general merchandise sales and at its Argos division.
Total retail sales excluding fuel increased by 2.6% year-on-year in the 16 weeks to 22 June, with like-for-like sales rising by 2.7%. That’s down from the 4.8% LFL growth seen in the fourth quarter of the previous financial year and 7.4% growth in the third.
Outside the FTSE 350, Shoe Zone tumbled as it warned on profits, hit by rising shipping costs and bad weather.
The shoe retailer said it now expects adjusted pre-tax profit for the year to 2 October 2024 to be not less than £10m. In its interim results in June, Shoe Zone had already revised its guidance down from £15.2m to £13.8m.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bp Plc | +2.19% | +10.50 | 489.00 |
| 2 |  |
Persimmon Plc | +1.79% | +24.50 | 1,396.50 |
| 3 |  |
International Consolidated Airlines Group S.a. | +1.46% | +2.40 | 166.30 |
| 4 |  |
3i Group Plc | +1.41% | +42.00 | 3,028.00 |
| 5 |  |
National Grid Plc | +1.31% | +11.60 | 897.00 |
| 6 |  |
Shell Plc | +1.00% | +28.50 | 2,886.00 |
| 7 |  |
Itv Plc | +0.94% | +0.75 | 80.65 |
| 8 |  |
Taylor Wimpey Plc | +0.83% | +1.20 | 145.00 |
| 9 |  |
Flutter Entertainment Plc | +0.61% | +90.00 | 14,740.00 |
| 10 |  |
Rightmove Plc | +0.60% | +3.20 | 535.20 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bt Group Plc | -2.26% | -3.20 | 138.10 |
| 2 |  |
Sainsbury (j) Plc | -2.25% | -5.80 | 252.00 |
| 3 |  |
Hiscox Ltd | -2.12% | -24.00 | 1,110.00 |
| 4 |  |
Compass Group Plc | -1.98% | -43.00 | 2,130.00 |
| 5 |  |
Mondi Plc | -1.64% | -25.00 | 1,501.50 |
| 6 |  |
Smurfit Kappa Group Plc | -1.64% | -58.00 | 3,484.00 |
| 7 |  |
Crh Plc | -1.56% | -90.00 | 5,680.00 |
| 8 |  |
Rentokil Initial Plc | -1.41% | -6.50 | 453.90 |
| 9 |  |
Whitbread Plc | -1.39% | -41.00 | 2,915.00 |
| 10 |  |
Informa Plc | -1.37% | -11.60 | 833.60 |
US close: Stocks start off H2 trading with modest gains
Wall Street stocks closed higher on Monday after the second half of the trading year initially got off to a mixed start, with both the S&P 500 and Nasdaq Composite later recovering from earlier losses.
At the close, the Dow Jones Industrial Average was up 0.13% at 39,169.52, while the S&P 500 advanced 0.27% to 5,475.09 and the Nasdaq Composite came out the gate 0.83% firmer at 17,879.30.
The Dow closed 50.66 points higher on Monday, reversing losses recorded in the previous session.
On the macro slate for Monday, S&P Global‘s June manufacturing PMI was revised slightly lower on Monday, dropping from a preliminary reading of 51.7 to 51.6, but remained the highest reading seen in three months.
Elsewhere, last month’s Institute for Supply Management manufacturing PMI unexpectedly dropped to 48.5, down from 48.7 in May, short of expectations for a reading of 49.1, and marking a third-straight monthly decline.
Finally, construction spending dipped 0.1% month-on-month in May, according to the Census Bureau, hitting a seasonally adjusted annual rate of $2.14bn. Private spending shrank 0.3%, while public spending rose 0.5%.
In the corporate space, Chewy shares were down more than 6% after regulatory paperwork showed that Reddit trader ‘Roaring Kitty’ had snapped up 9.0m shares in the company, while Spirit Aerosystems traded higher on the back of news that aeronautical giant Boeing would buy back the fuselage maker.
Markets will be closed on Thursday in observance of the Independence Day holiday.
Tuesday newspaper round-up: Inflation, Thames Water, Randox
Britain’s next government is poised to benefit from easing pressure on household finances after a slowdown in inflation in stores and a fall in fuel prices, but costs remain “too expensive” for many families. Figures from the British Retail Consortium (BRC) show that annual UK shop price inflation cooled last month to 0.2%, down from 0.6% in May – the slowest pace since October 2021 – as retailers cut the prices of many of their key products, including butter and coffee. – Guardian
Thames Water has been urged to show greater transparency over its finances and accused of “financial chicanery” after it emerged its board had approved a £150m dividend hours before its shareholders U-turned on providing emergency funding. The Guardian revealed last week that the board of the struggling water supplier agreed to the payout at a meeting on 27 March. – Guardian
A husband and wife duo who built an outdoor theatre on the grounds of their Suffolk farm estate have been catapulted into Britain’s rich list after netting £2bn from the sale of their financial data business. Mark and Lindy O’Hare, who own a Grade-II listed farmhouse and 350-seat theatre, have struck a deal to sell their data group Preqin to fund giant BlackRock for £2.5bn. – Telegraph
The future of a major British aerospace plant is in doubt with up to 2,400 jobs at risk following a carve-up of owner Spirit AeroSystems between Boeing and Airbus. A chunk of Spirit’s operations at the facility in Belfast have been left without an owner, putting the long-term future of the entire factory in danger. Boeing is to buy Kansas-based Spirit for $4.7bn (£3.7bn) in order to gain control of a key supplier to its troubled 737 Max jet, while offloading operations that provide components for Airbus to its European rival. This means Airbus will be taking control of a part of the Belfast factory that oversees wing and fuselage production for the Airbus A220 regional jet. – Telegraph
Randox plunged from Covid-era annual profits of £190 million to a loss of £40 million in 2023. The Northern Ireland-based health diagnostics firm, which sponsors the Grand National, said the losses had been expected as it had needed to restructure its operations after the pandemic. – The Times
