FTSE 100 watch: Footsie steadies after inflation data

on Aug 15, 2017

The UK benchmark index has gained ground in today’s session, building on yesterday’s gains, with sentiment staying upbeat following the nation’s inflation data. Next (LON:NXT) meanwhile has fallen deep into the red after analysts at Berenberg turned bearish on the blue-chip retailer.

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As of 12:23 BST, the FTSE 100 had added 42.91 points to stand 0.58 percent higher at 7,396.80. Sentiment has been upbeat amid subsiding geopolitical tensions and with investors analysing the latest inflation data out of the UK and the likelihood of the Bank of England raising interest rates.

“The Bank of England was expecting inflation to peak at about 3 percent in October, but the fact it was only 2.6 percent in July might mean that will not be as high as previously thought,” said Mike Bell, global market strategist at JP Morgan Asset Management, commented, as quoted by Reuters. “Even if inflation had got stronger, I don’t think that would be enough to make the Bank raise rates.”

In individual stock news, Next has lost ground after Berenberg lowered its recommendation on the retailer from ‘hold’ to ‘sell’ and trimmed its price target on the stock from 3,850p to 3,650p.

“We believe management's current strategy is formulated to maximise short-term returns, rather than adapting to ensure longer-term survival,” the analysts pointed out, as quoted by Sharecast, adding that this was preventing the retailer from “investing in areas that matter most to the consumer, in our view, leading to market share erosion”. Next’s share price is 3.98 percent down at 4,220.00p.

Hargreaves Lansdown (LON:HL), which updated investors on its full-year performance today, meanwhile has slipped 0.04 percent to 1,356.21p, after updating investors on its full-year performance. While the company posted a 15-percent rise in net new business inflows and lifted its ordinary dividend per share by 20 percent, its total payout to shareholders came in 15 percent lower.

The FTSE 100 index was 0.59 percent up at 4,220.00 points as of 12:31 BST on Tuesday, 15 August 2017.


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