London’s FTSE indexes slipped into the red on Wednesday after yesterday’s rally, with investors nervy ahead of key US inflation data tomorrow.
The FTSE 100 ended 0.1 per cent lower on Wednesday at 7,620.03 while the FTSE 250 fell 0.5 per cent to 17,876.24.
The weaker performance this morning came after the strongest day for equities in 11 months.
Markets surged after comments from Fed officials on Monday suggested that the US central bank might not hike rates again this year. But the key data US consumer price index data is out tomorrow which may complicate that narrative.
“The surge of optimism, fuelled by hopes the Fed will go easier with its interest rate policies and buoyed by expectations of fresh stimulus in China, appears to have plateaued. A little more caution is returning, as investors look ahead to tomorrow’s snapshot of inflation in the United States,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.
“Investors are highly sensitive to data and if US inflation shows any signs of tripping up in its downwards path, it is set to be unsettling and could upset expectations of a more dovish stance from the Fed,” Streeter added.
M&G climbed to the top of the index, rising 1.6 per cent while Imperial Brands and Prudential both rose 1.5 per cent.
Shares in Next meanwhile fell two per cent after reports that it was buying FatFace in a deal worth more than £100m. The deal could be announced later this week.
On the FTSE 250, construction firm Travis Perkins slumped nearly seven per cent after slashing its profit guidance for the year. In the third quarter group revenue for the firm declined by 1.8 per cent and like-for-like sales were also down by the same amount.
The company blamed the UK’s volatile housing market for the fall, as a period of elevated mortgage rates and wage stagnation has led to a slow down in the number of homes being bought.