Balfour Beatty (BBY)

LONDON (ShareCast) - (Sharecast News) - London stocks edged higher on Wednesday in subdued trading, supported by optimism over potential US monetary easing after inflation data on Tuesday.
The FTSE 100 index rose 0.19% to close at 9,165.23 points, while the FTSE 250 added 0.04% to 21,851.56 points.

"Animal spirits are definitely in charge of the market right now, as investors embrace the potential for the Fed to cut interest rates in the wake of what was seen as a soft inflation reading in the US," said Russ Mould, investment director at AJ Bell.

Patrick Munnelly at TickMill noted that "stocks reached a new peak as a steady US inflation report eased worries over prices and increased expectations for a Federal Reserve interest rate cut in September."

Sentiment was lifted after the latest US inflation reading reinforced expectations that the Federal Reserve could cut interest rates as soon as September.

Munnelly said the July CPI data "brought little in the way of surprises," with headline inflation up 0.2% month-on-month and the core rate rising 0.3%.

He added that "those advocating for a September rate cut may find some support in the data, as tariff-driven inflation does not appear to be exerting significant pressure."

Mould cautioned that "while there are only tentative signs of tariffs showing up in US consumer prices, they may be more of a subtle, slow burn which aren't immediately apparent in the headline rate right now."

In currency markets, sterling strengthened 0.53% against the dollar to $1.3571, and gained 0.16% on the euro to change hands at €1.1582.

German inflation eases, mortgage applications rise sharply stateside

There were no significant UK economic data releases Wednesday.

In Germany, annual inflation eased to 1.8% in July from 2.0% in June, in line with a preliminary estimate, the Federal Statistics Office reported.

Destatis president Ruth Brand said inflation had remained stable for two months, with falling energy prices exerting downward pressure, while above-average rises in service costs continued to drive price growth.

In the US, mortgage applications rose sharply in the week ended 8 August, climbing 10.9% from the previous week, the Mortgage Bankers Association said.

The increase was the largest in two months, supported by a 10-basis-point drop in benchmark mortgage rates to a four-month low. Refinancing activity jumped 23%, while applications for home purchases edged up 1.4%.

Munnelly said that with the CPI report now behind them, "investors are turning their attention to Friday's US retail sales data for indications that consumer sentiment aligns with the positive corporate earnings outlook."

Hill & Smith in the green, Shoe Zone plunges as profit halves

On London's equity markets, Hill & Smith jumped 9.76% after the construction and infrastructure products group unveiled a £100m share buyback alongside strong first-half results, including robust cash generation and a double-digit rise in underlying profits.

Quilter gained 0.94% following an upgrade to 'buy' from 'hold' by Berenberg, which pointed to an improved business outlook.

Genuit Group edged up 0.14% as RBC Capital Markets lifted its rating to 'outperform' from 'sector perform', citing the company's growth prospects.

On the downside, Beazley slumped 11.24% after the specialist insurer reported lower first-half profits and cut its full-year premium growth forecast.

"It wasn't a universally positive picture," said Mould, noting that Beazley "highlighted climate change and technology as two key issues that are undermining predictability for the insurance industry, and which undoubtedly make things tricky for any company which is in the business of pricing risk."

Housebuilder Persimmon slipped 0.4% after reaffirming its full-year completions target of 11,000 to 11,500 homes despite challenging market conditions and the risk of tax increases in October's Budget.

Mould said Persimmon's results suggested the UK housebuilding sector "is not a total lemon," but that "under the bonnet things don't look quite so rosy" given exceptional costs from a Competition and Markets Authority investigation.

Balfour Beatty dropped 2.65% despite higher first-half profits, as UK construction strength was offset by US weakness.

Outside the FTSE 350, Shoe Zone plunged 18.68% after halving its full-year profit forecast and scrapping its dividend.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 9,165.23 0.19%
FTSE 250 (MCX) 21,851.56 0.04%
techMARK (TASX) 5,263.83 0.73%

FTSE 100 - Risers

AstraZeneca (AZN) 11,444.00p 3.23%
Spirax Group (SPX) 7,050.00p 2.99%
GSK (GSK) 1,435.00p 2.17%
Convatec Group (CTEC) 231.00p 2.03%
Berkeley Group Holdings (The) (BKG) 3,842.00p 2.02%
Unilever (ULVR) 4,570.00p 1.78%
Antofagasta (ANTO) 2,116.00p 1.59%
BT Group (BT.A) 213.50p 1.57%
Croda International (CRDA) 2,488.00p 1.51%
Hikma Pharmaceuticals (HIK) 1,811.00p 1.46%

FTSE 100 - Fallers

Beazley (BEZ) 800.00p -12.28%
Entain (ENT) 895.00p -2.51%
London Stock Exchange Group (LSEG) 9,146.00p -2.49%
St James's Place (STJ) 1,287.00p -2.28%
British American Tobacco (BATS) 4,200.00p -2.05%
Coca-Cola Europacific Partners (DI) (CCEP) 6,780.00p -2.02%
Fresnillo (FRES) 1,701.00p -1.96%
BP (BP.) 418.35p -1.34%
Standard Chartered (STAN) 1,406.00p -1.33%
Diageo (DGE) 2,035.00p -1.31%

FTSE 250 - Risers

Hill and Smith (HILS) 2,170.00p 10.26%
Spire Healthcare Group (SPI) 228.50p 6.78%
Oxford Nanopore Technologies (ONT) 219.80p 3.50%
Sirius Real Estate Ltd. (SRE) 102.60p 2.29%
Morgan Advanced Materials (MGAM) 206.00p 2.23%
ICG Enterprise Trust (ICGT) 1,466.00p 2.23%
PayPoint (PAY) 740.00p 2.21%
B&M European Value Retail S.A. (DI) (BME) 227.80p 2.11%
Frasers Group (FRAS) 685.00p 2.01%
Genus (GNS) 2,540.00p 2.01%

FTSE 250 - Fallers

Watches of Switzerland Group (WOSG) 328.60p -4.03%
Marshalls (MSLH) 198.40p -2.77%
Balfour Beatty (BBY) 553.00p -2.73%
Wizz Air Holdings (WIZZ) 1,322.00p -2.72%
Playtech (PTEC) 422.00p -2.54%
Rank Group (RNK) 145.80p -2.54%
Greggs (GRG) 1,581.00p -2.53%
Diversified Energy Company (DEC) 1,112.00p -2.46%
XPS Pensions Group (XPS) 364.50p -2.41%
Pantheon Infrastructure (PINT) 103.00p -2.37%