The FTSE 100 eased slightly on Tuesday as a strong session in the US failed to inspire a meaningful rally in European shares.
London’s leading index was finely poised for most of the session with weakness in Beazley, RS Group and Intermediate Capital offset by a recovery in commodity stocks.
As the session progressed, early gains turned to losses and the FTSE 100 was trading down 0.15% at 7,683 at the time of writing.
“The FTSE 100 benefitted from a small waft of the feelgood factor emanating from Wall Street in early trade, as investors hopes remain high that inflation will keep heading in the right direction,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“The speculation has fuelled the value of tech stocks once again, with Nvidia given another boost, sending it to an all-time high. Investors cheered as the chip maker revealed new desktop graphics processors, aimed at the video game market, which will be capable of exploiting AI innovations.”
However, the benefits of a stronger session in the US faded through the session as investors looked forward to key inflation for further direction in markets.
“European markets didn’t share the excitement as all of the major indices were either flat or down on Tuesday morning, suggesting investors are in a holding pattern until we get the next round of inflation and jobs figures which provide the all-important clues as to central bank interest rate decisions,” said Russ Mould, investment director at AJ Bell.
US inflation data is due to be released on Thursday with economists predicting US core CPI inflation will tick marginally higher year-on-year while CPI is forecast to drop to 0.1% month-on-month.
Should these forecasts be met, it would fuel the view the US economy is heading for a soft landing. This would be supportive of equities.
The first full trading week is set to be a cracker for London’s largest companies as a raft of economic data accompanies a flurry of corporate updates.
Ahead of Marks & Spencer, Tesco and Sainsbury’s reporting later this week, B&M European Value said group revenue grew 5.0% year-on-year to £1,645m in the key Q3 festive trading period on Tuesday.
B&M shares were 0.6% higher at the time of writing.
