London pre-open: Stocks seen up after long weekend

(Sharecast News) - London stocks were set to rise at the open on Tuesday as traders returned to their desks after the Bank Holiday weekend. The FTSE 100 was called to open around 43 points higher.

Meanwhile, oil prices jumped amid rising tensions in the Middle East.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "On top, the news that Libya's eastern government - which is internationally unrecognised - said that it's shutting down oilfields in response to 'attacks on the leadership and employees of the Central Bank of Libya'.

"The eastern government produces around 1mbpd - which a substantial portion of Libya's overall production. Consequently, US crude was up by 3% yesterday, and around 8% in three sessions. The price of a barrel is testing the 200-DMA to the upside - where it sees strong resistance. The $78/80pb range is home to offers that could be cleared with mounting tensions of all sorts, yet the slowing global growth worries will likely keep the upside limited above this range in the medium run."

On home shores, industry data showed that shop prices in August experienced deflation for the first time since October 2021, with a decrease of 0.3%.

That marked a significant shift from the prior month's slight inflation of 0.2%.

The drop brought the annual growth rate to its lowest level in nearly three years, according to the latest BRC-NielsenIQ Shop Price Index.

Non-food items saw the most significant deflation, with prices falling by 1.5% in August - a further decline from the 0.9% drop in July.

That was the lowest inflation rate in the non-food sector since July 2021.

Food prices, while still experiencing inflation, showed a marked slowdown.

Overall food inflation decreased to 2% in August from 2.3% in July, reaching its lowest level since November 2021.

Fresh food prices, in particular, saw a notable decline in inflation, dropping to 1% in August, down from 1.4% in July, the lowest since October 2021.

Ambient food inflation also decelerated slightly, falling to 3.4% in August from 3.6% in July, marking its lowest rate since March 2022.

"Shop prices fell into deflation for the first time in nearly three years," said Helen Dickinson, chief executive of the British Retail Consortium.

"This was driven by non-food deflation, with retailers discounting heavily to shift their summer stock, particularly for fashion and household goods.

"This discounting followed a difficult summer of trading caused by poor weather and the continued cost of living crunch impacting many families."

Dickinson said food inflation eased with fresh food prices, especially fruit, meat and fish, seeing the biggest monthly decrease since December 2020 as supplier input costs lessened.

"Retailers will continue to work hard to keep prices down, and households will be happy to see that prices of some goods have fallen into deflation.

"The outlook for commodity prices remains uncertain due to the impact of climate change on harvests domestically and globally, as well as rising geopolitical tensions.

"As a result, we could see renewed inflationary pressures over the next year."

In corporate news, Bunzl reported a 3.3% decline in revenue to £5.71bn for the first half, while adjusted operating profit increased by 3.9% to £455.5m, driven by improved margins and acquisitions.

The FTSE 100 company also announced a 10.4% increase in its interim dividend, continuing a 31-year streak of dividend growth, and initiated a £250m share buyback programme.

Despite currency challenges, particularly from the disposal of its Argentine business, Bunzl upgraded its 2024 profit outlook amid strong operational performance and acquisition activity.

Online grocer and food logistics group Ocado announced that operations have finally started at two customer fulfilment centres in Australia a year later than planned, as part of its partnership with retail chain Coles.

The two robot-operated facilities in Sydney and Melbourne, first announced in 2019, were originally scheduled to go live last year, but the companies faced numerous delays during construction.

"As these CFCs ramp up, we are excited to help Coles bring a step-change in customer experience online to households across Sydney and Melbourne," said Ocado chief executive Tim Steiner.