UK stocks opened markedly lower on Wednesday as the latest data showed inflation rose higher than expected last month.

Inflation, as measured by the Consumer Prices Index, rose 0.7% in the 12 months to January, up from December’s 0.6%, according to the Office for National Statistics. The rise was larger than many economists had forecast.

Consumer goods giants Unilever (ULVR) and Reckitt Benckiser (RB.) were notable early fallers, down 1.33% to £39.52 and 1.56% to £62.08 respectively.

Meanwhile, a disappointing earnings update from British American Tobacco (BAT) highlighted the ongoing impact of the coronavirus pandemic on consumer spending.

At 0815, the benchmark FTSE 100 index was down 0.5% to 6,717.66.

CORPORATE NEWS

British American Tobacco dropped 5.6% to £25.94, even as it reported a rise in annual profit, citing strength at its vaping business.

The firm upped its dividend 2.5% to 215.6p, while guiding for 3-5% constant-currency revenue growth in 2021 and mid-single-digit percentage earnings growth ‘reflecting continued Covid-19 impacts’.

Fellow tobacco company Imperial Brands (IMB) slipped 1.4% to £14.92 on announcing that chief financial officer (CFO) Oliver Tant would stand down by no later than August. Tant would be replaced by Lukas Paravicini, currently CFO of agricultural commodities and brokerage group ED&F Man.

Mining giant Rio Tinto (RIO) added 0.2% to £62.73, having booked a 22% jump in annual profit after it benefited from higher iron ore prices, buoyed by Chinese demand for the key steelmaking ingredient.

The Anglo-Australian company also hiked its dividend by 21% to $4.64 per share, and added a special payout of $0.93, bringing the total payout for 2020 to $5.57 per share.

Online contracts-for-difference broker Plus500 (PLUS) fell 2.6% to £13.43 even as it posted a large rise in annual profit that nevertheless fell short of investors’ lofty expectations.

Plus500 declared a dividend of $0.54 per share, up from $0.37 in 2019, plus a special dividend of $0.287.

Aviation services group Signature Aviation (SIG) ascended 0.3% to 405p, having agreed to sell its engine repair and overhaul business to StandardAero for $230 million.

Fresh produce supplier Total Produce (TOT) gained 3.1% to 135p following news that it agreed to be acquired by Dole Food in a share-based transaction that would create an entity with combined assets worth $4.5 billion.

The deal would see Total Produce shares exchanged for shares in Dole at a fixed exchange ratio, whereby Total Produce shareholders would receive 82.5% of the combined entity, to be named Dole.

Automotive fluid systems manufacturer TI Fluid Systems (TIFS) shed 1.6% to 277p on announcing that chief executive William L. Kozyra would retire in the fourth quarter of 2020.

Kozyra would be succeeded by current executive vice president Hans Dieltjens, who would take on the role of chief operating officer from 1 March as a transitional step.

Property investor Supermarket Income REIT (SUPR) added 0.3% to 108.8p after it had acquired Sainsbury’s supermarket in Bangor, County Down, Northern Ireland, from John Morgan Estates for £24.8 million.

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Issue Date: 17 Feb 2021