15th Jan 2025 08:56
(Alliance News) - Stock prices in London opened higher on Wednesday in London, following UK inflation data that showed consumer prices rising more slowly than expected.
The consumer price index rose 2.5% in December from a year before, slowing from 2.6% in November while FXStreet-cited market consensus had expected inflation to pick up to 2.7%.
Separately, the Office for National Statistics reported that the decline in producer input prices slowed to 1.5% on-year in December from 2.1% in November, while consensus had expected a sharper slowdown to 1.3% in December.
"After the ill winds which have buffeted UK financial markets over the past couple of weeks, today's inflation figures will undoubtedly provide some welcome respite," commented Danni Hewson. "Whilst at 2.5% inflation is still stubbornly above the Bank of England's target, the fact headline CPI has come in below expectation and has even fallen a bit is cause for a degree of celebration. Markets have immediately seized on the numbers which will be the last inflation snapshot MPC members will get before they make their decision on whether to deliver an interest rate cut in February."
However, she added that "it's important not to over-egg this pudding and not to forget the potential for another inflation spike if businesses do pass on those extra costs coming their way in April...There's also the potential that global trade friction resulting from US tariffs could keep things volatile for the foreseeable future. And whilst rate cuts would be welcome, one of the reasons they're likely to be considered is because of the weakness which seems embedded in the UK economy.
"The chancellor might have let out a sigh of relief this morning but she's not off the hook yet and will need to follow through on the promise to properly lay out her growth plans if she's going to win over markets."
The FTSE 100 index opened up 55.99 points, 0.7%, at 8,257.53. The FTSE 250 was up 313.22 points, 1.6%, at 20,079.49, and the AIM All-Share was up 3.10 points, 0.4%, at 710.91.
The Cboe UK 100 was up 0.7% at 827.91, the Cboe UK 250 was up 1.8% at 17,461.07, and the Cboe Small Companies was down 0.1% at 15,264.17.
On the FTSE 100, Diploma was up 2.9%.
The distribution firm proclaimed a "strong start to the year" as trading for the first quarter ended December 31 was "in line with expectations".
These included revenue rising 12% with 7% organic growth, a "strong operating margin", and full-year guidance remaining unchanged with around 6% organic revenue growth and an approximate 21% operating margin.
On the FTSE 250, Vistry rose 5.8%.
The housebuilder said it expects around GBP250 million in adjusted pretax profit for 2024, down from 2023's GBP419.1 million but in line with the revised consensus it announced last month.
However it expects adjusted revenue to have increased to GBP4.4 billion from GBP4.0 billion, and said total completions have risen by approximately 7% to around 17,200 from 16,118.
Also, Vistry said it has a "strong pipeline of attractive new land and development opportunities" going forward.
Among smaller caps, Fiinu saw its stock price multiply by about sevenfold.
The fintech company announced a non-binding heads of terms agreement for the first white-label deal for its flagship Plugin Overdraft product with "an independent UK bank".
The parties have agreed to an exclusivity period of 12 months for the UK from the go-live date, Fiinu said, with the product launch expected during the fourth quarter and Fiinu promised royalty fees.
In European equities on Wednesday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.2%.
The pound was quoted flat at USD1.2208 early on Wednesday in London, compared to USD1.2202 at the equities close on Tuesday. The euro stood at USD1.0299, flat against USD1.0295. Against the yen, the dollar was trading lower at JPY157.07 compared to JPY157.95.
In Asia on Wednesday, the Nikkei 225 index in Tokyo was down 0.1%. In China, the Shanghai Composite was down 0.4%, while the Hang Seng index in Hong Kong was up 0.3%. The S&P/ASX 200 in Sydney closed down 0.2%.
In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.5%, the S&P 500 up 0.1% and the Nasdaq Composite down 0.2%.
Brent oil was quoted lower at USD79.58 a barrel early in London on Wednesday from USD79.84 late Tuesday.
"One good news is that Israel and Hamas are apparently nearing a ceasefire agreement before Trump's inauguration next week," Swissquote's Ipek Ozkardeskaya noted before the London open. "The latter helped cool the rally of the US crude prices into the USD80pb level, as Brent crude eased below the USD80pb mark.
"But note that some experts warn that Israel may ease pressure in Gaza to strengthen its ties with the US to increase pressure on Iran – which is a major oil exporter with around 1.6mbpd exported in October last year. As such, the geopolitical tensions remain high both on the Russian and Middle Eastern fronts."
Gold was quoted higher at USD2,683.15 an ounce against USD2,673.07.
Still to come on Wednesday's economic calendar, releases include trade balance data from Ireland and Germany's GDP this morning; US consumer price inflation will follow in the afternoon.
By Emma Curzon, Alliance News reporter
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