FTSE 100 ticks higher ahead of US inflation data

The FTSE 100 traded higher on Wednesday as investor confidence continued to flow through the UK’s leading stocks despite a potential hurdle in the form of UK inflation later in the session.

The FTSE 100 was 0.3% at the time of writing.

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“The market’s optimism is starting to look rather heroic. Despite higher than anticipated factory gate prices, US stocks made progress overnight and the FTSE 100 has followed this cue to reach a new record high,” said AJ Bell investment director Russ Mould.

“The next test of the prevailing positive sentiment comes tonight with US consumer prices data – overnight Federal Reserve chair Jerome Powell said he did not expect rates to increase again but this release is one of a number which could help determine just how soon cuts come.”

In addition to mild optimism around interest rates, corporate earnings helped lift the FTSE 100 on Wednesday.

Strong results from Experian sent the stock 7% higher as the group posted sales growth at the top end of the range.

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“Credit giant Experian is ticking all the boxes,” said Matt Britzman, equity analyst, Hargreaves Lansdown.

“A strong final quarter capped off a good year, and investors should be happy with guidance that points to further top-line growth and improving margins. Experian is a leader in its field, with US operations taking centre stage and driving cash flow that can be reinvested into growth markets like Latin America.”

Burberry

Burberry was the biggest disappointment on Wednesday with a 4% drop after the luxury group released sluggish sales figures.

“The last twelve months have been particularly tough on Burberry. With inflationary pressures weighing heavily on consumer spending, the luxury goods market has inevitably taken a hit, and with-it Burberry seems to have fallen out of fashion,” said Mark Crouch, analyst at investment platform eToro.

“As consumers’ appetite for luxury goods has dried up, the knock-on effect for Burberry has been severe, issuing two profit warnings in six months sending the share price tumbling.

“Burberry’s full year earnings are, at best, disappointing. Operating profits fell by 34% and like-for-like sales fell 12% in the final quarter wiping out gains made earlier in the year.”

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