FTSE 100 Live: London faces lower return as inflation and oil bite

FTSE 100 slips 3.5 points to 10,820.76 Reckitt Benckiser surges 4.8% BP and Shell gain as crude oil advances InterContinental Hotels and Fresnillo lead fallers FTSE 250 flat as AIM All-Share declines 0.3% 8.15 am: FTSE steadies near flat as Reckitt and oil majors lead The FTSE 100 has shaken off most of its anticipated opening decline, trading 3.5 points lower at 10,820.76 shortly after the bell. London’s blue-chip index was down just 0.03%, having moved between 10,820.67 and 10,829.19. The FTSE 250 was virtually unchanged, rising 0.63 points to 24,939.42.

Reckitt Benckiser led the blue-chip risers, surging 4.8% to 5,378p, followed by Bunzl, which gained 2.8% to 2,870p. Higher crude prices supported the oil majors, with BP climbing 2.6% to 527.7p and Shell advancing 1.5% to 3,396p. Entain added 2%, while Vodafone and Centrica rose 1.4% and 1%, respectively.

InterContinental Hotels Group was the biggest FTSE 100 faller, dropping 3.8% to 156.4p. Fresnillo declined 3% despite gold’s earlier strength, while British Airways owner International Consolidated Airlines Group and Rolls-Royce both fell around 2.6%. JD Sports Fashion, Barclays, Computacenter and ICG were also down by more than 2%.

The broader market remained subdued. The FTSE 350 and All-Share indices slipped 0.03%, while the FTSE AIM 100 fell 0.4% and the AIM All-Share declined 0.3%. The early pattern indicated that gains among consumer defensives and energy stocks were cushioning weakness across travel, financial and technology-related shares. 7.15 am: Blue chips face cautious return after long weekend The FTSE 100 is expected to reopen lower on Tuesday as investors return from the bank holiday weekend to rising oil prices, renewed inflation concerns and a weaker global equity backdrop.

September contracts indicated an opening around 10,794, down roughly 30 points from Friday’s cash close of 10,824.26. The contract itself was 42.5 points, or 0.4%, below its previous settlement. Fresh figures showed UK shop prices rising at their fastest rate in two years.

The BRC-NIQ Shop Price Monitor recorded annual inflation of 1.5% in August, accelerating from 0.9% in July. Food inflation increased to 2.8% from 2.2%, while non-food inflation reached 0.9%. Higher energy, commodity and supply-chain costs were among the factors blamed for the increase, which could renew pressure on retailers and consumer-facing stocks.

Oil prices added to inflation concerns. Brent crude gained 0.5% to $90.94 a barrel, while West Texas Intermediate rose 0.8% to $86.41 as traders assessed the prospect of prolonged disruption in the Middle East. The advance could lend some support to BP and Shell when trading begins, although higher fuel and transport costs may weigh on airlines, retailers and other energy-intensive businesses.

Gold rose 0.2% to $4,490 an ounce, while copper gained 0.6% to approximately $6.73 per pound. The firmer metals may provide an early lift for London-listed miners, including Fresnillo, Endeavour Mining, Antofagasta and Anglo American. Wall Street ended Monday in the red after renewed US-Iran tensions pushed oil prices and government bond yields higher.

The Dow Jones Industrial Average fell 0.7%, while the S&P 500 declined 0.3%. US index contracts were pointing fractionally higher ahead of Tuesday’s session. Asian trading was mostly subdued.

Japan’s Nikkei 225 fell around 1%, with semiconductor stocks among the main casualties, while Hong Kong’s Hang Seng was down close to 0.9%. Australia’s ASX 200 finished 0.1% lower at 9,065.50. Bitcoin was trading near US$79,100, up approximately 1.4% over the session after moving between $77,773 and $79,225.

The domestic economic calendar includes August’s manufacturing purchasing managers’ index alongside consumer-credit and mortgage-approval figures at 9.30 am. Corporate announcements are expected from Ashtead Technology and Michelmersh Brick Holdings. Investors will also watch the closing prices used for FTSE Russell’s quarterly index review.

Indicative changes suggest easyJet and Ithaca Energy could enter the FTSE 100, replacing Entain and Persimmon. The confirmed reshuffle will be announced after Wednesday’s closing bell.

Source: Proactive Investors