London’s FTSE indexes got off to a slow start on Tuesday morning despite fresh data suggesting the UK’s battle against inflation is nearing an end.
The FTSE 100 was trading flat at 7,681.52 while the midcap FTSE 250, which is more aligned with the health of the domestic economy, was trading 0.16 per cent lower at 19,095.96.
Markets failed to rise despite the news that shop price inflation slowed to 2.5 per cent in February, the lowest level seen in two years. Food inflation also slowed to five per cent, its lowest level since May 2022.
Helen Dickinson, chief executive of the British Retail Consortium, said: “There was good news for consumers as shop price inflation fell to its lowest rate in nearly two years. Food prices fell month-on-month with drops in fresh food including meat, fish and fruit.”
The FTSE 100’s top riser was medical technology firm Smith and Nephew, which reported solid revenue growth in its full year results.
The firm announced a 12-point plan to shareholders last year to try and improve productivity and strengthen profit margins. Mark Crouch, analyst at investment platform eToro said “this morning’s earnings suggest the plan is starting to pay off”.
“Shareholders have witnessed a 25 per cent rally since November and despite sticky inflation impeding the company’s progress, this set of results may reassure investors that Smith & Nephew are on the road to recovery,” Crouch continued.
Croda shares fell three per cent after the chemicals giant issued a warning over its margins with demand under pressure from “prolonged destocking and weaker macro environment”.
The firm said its profit before tax fell to £236.3m, compared to £780m the previous year, a staggering fall of 69.7 per cent.
On the FTSE 250, shares in struggling fund manager Abrdn climbed 5.9 per cent after a mixed set of results.
Revenue fell four per cent while clients pulled around £13.9bn funds, but analysts at Numis noted that “key measures were all ahead of guidance, largely due to non-operating items”.
“Adjusted EBIT (+ four per cent), PBT (+ six per cent) and capital generation (+ 12 per cent), all came in ahead of the guidance issued several weeks ago,” they said.
Last month Abrdn said it will start cutting hundreds of jobs as part of a “cost saving overhaul“.