FTSE falls as consumer and banking stocks struggle
Source - SMW
Consumer and banking stocks weighed on the FTSE as inflation hit a near four-year high in the UK ahead of the Bank of England's meeting on interest rates on Thursday.
The blue-chip index declined 0.1% to 7,500.
The market was not keen on cigarette sellers Imperial Brands (IMB) and British American Tobacco (BATS) as they slid 1% and 0.5% lower to £35.54 and £54.33, respectively.
Ben & Jerry's and Marmite brands owner Unilever (ULVR) also traded 0.7% lower.
Dominant large cap bank HSBC (HSBA) retreated 0.5% to 688.1p.
Brent crude oil was up 0.7% to $48.64 per barrel, while gold reversed 0.3% to $1,262 per ounce. Copper slumped 0.9% to $5,710 per tonne.
Inflation continued to rise as it increased from 2.6% in April to 2.7% in May. The Office for National Statistics reported the increase was mainly due to higher prices for games, toys and hobbies.
The inflation reading was higher than expected and more than the Bank of England's 2% target.
House prices bounced back with a 5.7% annual rise as the average property price stood at £236,519 according to the Office for National Statistics. The data suggested the slower house price rises earlier this year were only temporary.
A rebound in tech stocks following a recent sell-off helped US equities to a solid open on Tuesday. The tech-focused Nasdaq nudged 0.1% higher to 2,433.
FTSE 100 RISERS AND FALLERS
The latest terrorist attacks in the UK appeared to deter thrill seekers as Merlin Entertainments (MERL) said the attacks in Manchester and London over the last month resulted in a 'further deterioration in domestic demand.' The owner of Legoland was also cautious about foreign visitor trends over the next few months, triggering a 2.4% decline in the shares to 490.8p.
Elsewhere, shares in equipment rental firm Ashtead (AHT) ticked 2.3% down to £16.03 thanks to a 7% jump in underlying pre-tax profit to £793.4m.
FTSE 250 RISERS AND FALLERS
Among the mid-caps, outsourcer Capita (CPI) was the top riser after the company reassured investors that profitability would improve in the second half of 2017 thanks to self-help initiatives. It also said it was considering a partnership with British Airways, helping the stock to rally 14% to 627.2p.
A five-year contract for scandal-hit Petrofac (PFC) lifted the stock by 3.9% to 396.5p. The oil services company agreed a deal with Kuwait Oil to provide specialist technical training and competency development services for over $35m. Petrofac's share price collapsed this year after chief operating officer Marwan Chedid was suspended on alleged bribery, corruption and money laundering.
In the fashion world, Ted Baker (TED) was in the spotlight thanks to continued growth in all areas of the business. The British fashion brand boosted sales by 14.2% in the 19 weeks to 10 June despite macro uncertainties, prompting the shares to nudge 2.2% higher to £24.77.
Halma (HLMA) continued its strong performance as it reported its fourteenth year of record sales and profit. The safety equipment seller also hiked the dividend for the 38th consecutive year by at least 5%, helping to boost the share price 2.2% to £11.65.
Another equipment sepcialist Ashtead (AHT) advanced 2.3% to £16.03 on strong annual numbers and an uplift in fleet rentals earlier this year.
SMALL CAP RISERS AND FALLERS
In the small cap space, there was a surge of good news, including takeover bids.
HaloSource (HAL) bucked this trend as it hit a major roadblock in its efforts to raise £1.9m to keep the company afloat. The clean water tech firm said its cornerstone investor would no longer make an application to Chinese authorities to allow it to help with fundraising as there was no guarantee of a positive outcome. Over a quarter of HaloSource's value was wiped out to 5.5p.
Mosman Oil and Gas (MSMN) officially became an oil producer after it collected 496 barrels of oil from the Strawn project, which was celebrated by investors as the stock catapulted 34% to 0.7p.
Tri-Star (TSTR) announced that Strategic & Precious Metals Processing (SPMP), in which it has 40% equity interest, won a multi-year deal with Traxys. Shares in the firm jumped by 32% to 0.1p.
Shares in Kalibrate Technologies (KLBT) soared 46% to 83.2p after it agreed a recommended offer with private equity firm Hanover. Kalibrate shareholders would get 85.5p cash per share, which would value Kalibrate at approximately £29m.
Another takeover target Monitise (MONI) agreed a recommended offer with Fiserv UK, which meant shareholders would receive 2.9p cash for each share, valuing the financial services digital tech firm at £70m. The stock surged 23% to 2.8p.
In the utility sector, lower energy prices at Telecom Plus (TEP) dragged on sales and frustrated investors who overlooked its continued organic growth in membership numbers. Shares in the firm fell 6.3% to £12.19.