FTSE 100: London dips after US inflation, miners climb, Tesco lifts guidance

London’s FTSE 100 index dipped on Thursday after December’s US inflation data as markets grew increasingly nervous about the chance of imminent rate cuts.

The capital’s premier bluechip index was trading marginally lower at 7,648.86, while the FTSE 250 crept back into the green after dipping sharply shortly after the inflation figures were published.

Figures from the Bureau of Labor Statistics showed the consumer price index (CPI) picked up to 0.3 per cent month-on-month in December. Economists had expected prices to increase 0.2 per cent.

This brought the annual rate of inflation to 3.4 per cent, up from November’s figure of 3.1 per cent. Higher housing costs drove the increase, with shelter costs contributing over half of the monthly increase.

The figures come amid continuing debate about when the Federal Reserve will start cutting interest rates.

In London, both Tesco and M&S provided the market with healthy updates on the state of consumer spending over the Christmas period.

M&S maintained its profit guidance thanks to strong food sales while Tesco raised its guidance following a strong festive performance.

Recruitment firm Robert Walters meanwhile performed roughly in line with expectations. Fees were down noticeably but the firm maintained its profit guidance for the year, unlike Hays, which updated markets earlier this week.

Market updates

Marks and Spencer has maintained its guidance for the year after it racked in over £2bn in food sales over the Christmas period. 

The high street stalwart said total sales in the division grew 10.5 per cent in the run up to the festive period to £2.3bn. 

Britain’s biggest supermarket Tesco has also upgraded its profit guidance for the year off the back of a strong Christmas performance. 

In an update to markets, the board said it now expects to make £2.75bn in retail operating profit, up from a previous forecast of £2.6bn. It comes after the ‘Big Four’ grocer reported a 9.2 per cent lift in sales in the four weeks to Christmas. 

Fee income slipped again at Robert Walters in the final quarter but the recruitment firm maintained its guidance for pretax profit across 2023 as a whole, it said in a statement to markets this morning.

Globally, net fee income was down 13 per cent in the three months to December reflecting the “challenging macro-economic conditions” across its core markets.

FTSE 100 top five risers and fallers

Risers

1 – Antofagasta, up 4.7 per cent

2 – Whitbread, up 2.0 per cent

3 – Anglo American, up 1.9 per cent

4 – Rio Tinto, up 1.7 per cent

5 – Glencore, up 1.4 per cent

Fallers

1 – M&S, down 4.9 per cent

2 – WPP, down 1.6 per cent

3 – SSE, down 1.1 per cent

4 – Spirax-Sarco Engineering, down 0.8 per cent

5 – Flutter Entertainment, down 0.7 per cent

Market prices

Gold – $2,0329.88 per ounce, up 0.31 per cent

Brent oil price – $78.10, up 1.7 per cent

GBP/USD – $1.2724, down 0.15 per cent

S&P 500 – closed 0.57 per cent higher at 4,783.45

Nasdaq – closed 0.75 per cent higher at 14,969.65