London open: Stocks rise on rate-cut hopes after inflation slowdown

(Sharecast News) - UK stocks were putting in solid gains on Wednesday morning after a sharper-than-expected fall in consumer price inflation all but cemented a rate cut at the Bank of England's next meeting. The FTSE 100 was trading 0.7% higher at 8,303.15 by 0845 BST, on track to finish at its highest level since 27 September, while the FTSE 250 gained 0.4% to 20,869.40.

"British inflation's downward trajectory, combined with slowing wage growth, emphasises Bank of England governor Andrew Bailey's latest comments that the bank will get 'more aggressive' on its rate policy," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

The Office for National Statistics said that the annual change in the UK consumer price index (CPI) slowed to just 1.7% last month, down from 2.2% in August. This was well below the 1.9% expected by economists and the first time below the 2% mark since April 2021. The report follows data released on Tuesday which showed that UK earnings growth fell to its lowest level for more than two years.

Looking ahead to next month's Monetary Policy Committee meeting, Danni Hewson, AJ Bell's head of financial analysis, said: "A quarter percentage point cut is pretty much nailed on, and expectation of a second rate cut in December has also jumped up today with markets thinking there's a better than 80% chance we will end the year with rates down at 4.5% [from 5% currently]."

In other news, European markets were mostly lower, with luxury stocks providing a drag as industry bellwether LVMH disappointed with a 3% drop in organic revenues in the third quarter owing to ongoing weakness in China.

Whitbread and Antofagasta rise

Premier Inn owner Whitbread was the high riser of the morning after lifting its half-year dividend by 7% and saying it would buy back an additional £100m in shares, despite a fall in earnings. The company held annual guidance as pre-tax profit for the six months to 29 August fell 22% to £309m on flat revenue of £1.5bn.

Antofagasta was also in favour after the copper mining giant reported a 15% increase in third-quarter production as it maintained expectations for full-year output to hit the lower end of guidance.

Asset manager Ninety One was a heavy faller, dropping 5% after reporting a slight fall in assets under management in its second quarter. AuM totalled £127.4bn by 30 September, up from £123.1bn last year but down from £128.6bn at the end of June.

Airline stocks IAG, easyJet and Wizz Air were all nursing losses, pulling back after strong gains the previous session as oil prices tumbled. Brent was up 0.3% at $74.47 a barrel in morning trade, having dropped more than $3 on Tuesday.

Burberry was weaker as shares in the British luxury brand fell in sympathy with European peer LVMH.

Market Movers

FTSE 100 (UKX) 8,303.15 0.65% FTSE 250 (MCX) 20,869.40 0.36% techMARK (TASX) 4,789.43 0.67%

FTSE 100 - Risers

Whitbread (WTB) 3,153.00p 2.64% Barratt Redrow (BTRW) 483.30p 2.39% Antofagasta (ANTO) 1,833.00p 2.03% Fresnillo (FRES) 666.00p 1.76% Taylor Wimpey (TW.) 162.95p 1.75% Shell (SHEL) 2,544.00p 1.66% Persimmon (PSN) 1,689.50p 1.65% Rolls-Royce Holdings (RR.) 549.40p 1.63% 3i Group (III) 3,341.00p 1.61% AstraZeneca (AZN) 12,040.00p 1.60%

FTSE 100 - Fallers

Admiral Group (ADM) 2,694.00p -2.95% Rentokil Initial (RTO) 342.40p -2.17% Convatec Group (CTEC) 227.00p -1.73% easyJet (EZJ) 513.40p -0.89% International Consolidated Airlines Group SA (CDI) (IAG) 205.20p -0.82% Sainsbury (J) (SBRY) 275.00p -0.79% Beazley (BEZ) 796.00p -0.75% Diageo (DGE) 2,561.00p -0.72% Intertek Group (ITRK) 5,085.00p -0.39% B&M European Value Retail S.A. (DI) (BME) 408.60p -0.37%

FTSE 250 - Risers

IP Group (IPO) 52.10p 7.20% Quilter (QLT) 151.60p 7.06% Oxford Instruments (OXIG) 2,070.00p 6.81% XPS Pensions Group (XPS) 328.00p 6.49% W.A.G Payment Solutions (WPS) 82.80p 6.15% Target Healthcare Reit Ltd (THRL) 92.90p 5.21% Marshalls (MSLH) 322.00p 4.21% Petershill Partners (PHLL) 224.50p 3.70% Moonpig Group (MOON) 235.50p 3.06% AO World (AO.) 111.00p 2.97%

FTSE 250 - Fallers

Ninety One (N91) 177.20p -5.09% Burberry Group (BRBY) 621.80p -3.75% Direct Line Insurance Group (DLG) 176.00p -3.03% Wizz Air Holdings (WIZZ) 1,228.00p -2.23% Tate & Lyle (TATE) 731.50p -1.81% Close Brothers Group (CBG) 373.00p -1.74% Bridgepoint Group (Reg S) (BPT) 316.80p -1.43% RS Group (RS1) 759.50p -1.36% Watches of Switzerland Group (WOSG) 438.40p -1.13% BlackRock Greater Europe Inv Trust (BRGE) 563.00p -1.05%