FTSE100 slides 51 to 7,378
Inflation highest for three years
Wall Street badly hit in early trading
Miners take a hit
FTSE 100 ended lower, as US shares sank along with other European benchmarks as big miners took a pasting and traders considered UK inflation stats.
The index of leading UK shares closed 0.69% down, or around 51 points at 7,378.
The FTSE 250 also finished lower - down 163 points at 18,988.
Commodities giant Glencore plc (LON:GLEN) was the biggest laggard, down 4.24% at 330.10p, closely followed by copper giant Rio Tinto (LON:RIO), which lost 4.12% to 3,327p.
BHP Billiton (LON:BLT) was also lower - down 2.05% to 1,283.5p.
Conversely, the highest Footsie gainer was in the same sector but silver giant Fresnillo (LON:FRES), which added 1.64% to 1,553p.
In the US, the Dow Jones dropped 181 points to stand at 20,724.
The mood in London had been subdued before the US open due to the inflation number for February.
At 2.3%, the CPI read was well above expectations and above the Bank of England 2% target for the first time since 2013.
Sterling climbed as investors looked forward to higher interest rates, unsettling dollar earners such as the miners.
3.30pm.. London traders run for cover
A poor start on Wall Street and unexpectedly high UK inflation sent London investors running for cover.
FTSE 100 was 46 points lower at 7,383, taking their cue from a pounding for the Dow Jones Industrial Average.
The benchmark US index shed 155 points in early dealings, with similarly heavy falls for both Nasdaq and the S&P 500.
The mood in London had been subdued before the US open due to the inflation number for February.
At 2.3%, the CPI read was well above expectations and above the Bank of England 2% target for the first time since 2013.
Sterling climbed as investors looked forward to higher interest rates, unsettling dollar earners such as miners.
11.30am...FTSE 100 under pressure as inflation climbs above target
An attempt at a rally by FTSE 100 was squashed by rising UK inflation, though the government had some good news on borrowing.
The blue chip index was 12 points lower at 7,417 as investors pondered the prospect of a more hawkish Bank of England in future.
One member of its rate setting committee had already voted for a rise at the last meeting, but more may follow inflation stays above target.
February’s CPI rose to 2.3% compared to forecasts of 2.1% while core inflation also came in above consensus at 2% vs the 1.7% predicted.
Shilen Shah, bond strategist at Investec Wealth & Investment, suggested the numbers indicate inflationary pressures were widespread and not purely restricted to currency-sensitive sectors.
“Today’s announcement comes at a sensitive time for the BoE given the 8-1 split at the last MPC meeting”.
It is the first time inflation has risen above the Bank of England’s target since 2013.
The prospect of higher interest rates gave banks and insurers a nudge higher.
Standard Life PLC (LON:SL.) led the way, with yesterday’s clarification on the roles of its joint chief executives once it merges with Aberdeen Asset (LON:AND) also helping. Shares in Standard rose 1.5% to 369p.
Barclays (LON:BARC), Lloyds (LON:LLOY) and Royal Bank of Scotland (LON:RBS) all added a few points.
Bunzl (LON:BNZL) was also going well after a push by Barclays Capital, which switched its recommendation to a positive ‘overweight’ from a rather non-committal ‘equal-weight’.
Among the small caps, MySQUAR Limited (LON:MYSQ) has made it easier for Telenor Myanmar customers to purchase apps and make in-game purchases when using the MySQUAR social media platform. Shares rose 1.8% at 1.55p.
Alliance Pharma plc (LON:APH) climbed 4.8% to 49.25p as it reached an agreement with Sinclair Pharma PLC (LON:SPH) that will see it receive some £5mln of compensation, relating to the material reduction of business for the Kelo-stretch product.
The share price of Goal Soccer Centres PLC (LON:GOAL) was on the cusp of reaching three integers, rising 4.7% to 99.5p on the back of results for 2016. The footie pitches operator returned to profit and said its new strategy is on track.
Proactive news headlines
accesso Technology Group PLC (LON:ACSO) had a good 2016 in what was supposed to be an investment phase for the virtual queuing and ticketing group. Adjusted underlying earnings (EBITDA) jumped 25.7% to US$19.1mln from US$15.2mln.
mporium Group PLC (LON:MPM), the mobile commerce specialist, raised £3.05mln from its placing of shares at 15p each.
Satellite Solutions Worldwide Group PLC's (LON:SSW) revenues and customer numbers trebled in a busy 2016 that saw it become the largest rural broadband provider outside of North America.
BATM Advanced Communications Limited's (LON:BVC) Teleco Systems Division has been awarded a US$2.8mln contract with Internet Solutions Kenya. It will upgrade the network infrastructure to increase bandwidth capacity so the client can expand the service offering.
Berkeley Energia Ltd (LON:BKY) won support from the EU regulator for the company’s Salamanca Mine in Spain as it signed off the company’s first uranium offtake deal. The EURATOM Supply Agency, the governing body for all nuclear fuel, said: "We particularly welcome the emergence and development of a new EU based uranium mining project and believe that it will contribute to the security of supply of natural uranium for the community users."
88 Energy Ltd (LON:88E) has confirmed that ground operations are now underway for the Icewine-2 shale gas well, which is set for an April spudding.
Alliance Pharma plc (LON:APH) announced it is to receive £5mln of compensation from Sinclair Pharma Plc (LON:SPH) after a skincare drug acquired in 2015 fell short of sales expectations. The company also receives rights to another skincare product as part of the new deal too.
8.45am...FTSE 100 up, but only just, as City investors sit on their hands ahead of inflation data
The FTSE 100 crept into positive territory, but only just, as the City’s big investors effectively sat on their hands ahead of inflation data due out later this morning.
The index of blue-chip shares mustered a seven point gain to move to 7,437.24 early on.
Consumer price inflation is expected to have hit a three-year high of 2.1% on the back of a weaker pound following last June’s Brexit vote.
The banks and financial stocks were in demand early. However it was the distribution and outsourcing group Bunzl (LON:BNZL) that topped the leader board.
Up 2%, the stock was given a push by Barclays Capital, which switched its recommendation to a positive ‘overweight’ from a rather non-committal ‘equal-weight’.
On the debit side it was a down day for the mining stocks.
6.45am...Footsie set to mark time
The FTSE 100 is expected to open little changed today from yesterday's close of 7,429.81 points as investors await UK inflation data.
UK consumer price inflation is forecast to rise 2.1% year-on-year in February, compared to 1.8% the previous month, on the back of a weaker pound following last June’s Brexit vote. The Office for National Statistics releases the figures at 9.30am.
“The key release today will be the UK inflation figures for February, where we are likely to see the first rise beyond the Bank of England's inflation target of 2%,” said Danske Bank.
“Despite increasing inflation, we stick to our long-held view that the Bank of England will remain on hold for a long time, as it puts more weight on growth and labour market data than inflation.”
In the US, Wall Street benchmarks closed flat to lower as the oil price weighed and traders were reluctant to take on risk in the current environment.
The Dow Jones Industrial Index finished almost nine lower, or 0.04% to 20,905, while the broader based S&P 500 shed 0.2%, or almost five points at 2,373.
The tech heavy Nasdaq had hit an intra-day high earlier in the session but fell back to close just 0.01% up at 5,901.
Today's headlines
Global brands including Volkswagen, Toyota and Tesco have joined the more than 250 companies that have suspended advertising deals with Google as the internet giant apologised for failing to crack down on extremism.
ITV, Aviva and Heinz also pulled advertising from YouTube, Google’s video platform, after an investigation by The Times, which broke the story.
The ousted boss of troubled aerospace and technology group Cobham will get a £1mln golden parachute. Bob Murphy, who bailed out in December, is expected to receive a year’s salary under the terms of his contract as well as £200,000 to allow him to repatriate himself and his family to the US, reports the Telegraph
The UK’s home care industry is “on the brink of collapse” with companies either going bankrupt or pulling out of contracts, according to a joint report by the Local Government Information Unit and Mears. The company says it loses £3m a year on its home care business, and is handing back unprofitable local authority contracts. reports the FT.
Sports Direct has lost a trademark battle against a small online business despite claiming that the company, run by a husband and wife team, would confuse consumers about its burgeoning gym business. Fitness Direct, which was started by Sandra and Faycal Makhloufi in 2014, sells sports equipment including dumbbells and kettlebells online, reports the Telegraph.
Standard Life and Aberdeen Asset Management have sought to allay investor fears over having two chief executives following their £11bn merger, reports the Mail.
Nearly 15 years after Tesco bought One Stop it is still paying staff at the convenience chain less and charging customers more for products than in its Tesco Express outlets, writes the Times. The revelation could put pressure on Britain’s largest grocer as its ownership of the chain is likely to come under scrutiny as part ofits proposed £3.7 bn takeover of wholesaler Booker.
Commodities/currencies
£/$ 1.2365 - pound higher
Gold US$1,230 down US$4
Oil (WTI) US$49.19 up US$0.28