(Sharecast News) - London stocks closed below the waterline on Wednesday, amid worries about rising inflation after the release of the latest UK reading.
The FTSE 100 ended the session down 1.19% at 6,950.20, and the FTSE 250 was 0.44% weaker at 22,234.53.

Sterling was in the red as well, last trading 0.15% weaker against the dollar at $1.416, and losing 0.1% on the euro to €1.1596.

"The FTSE 100 has fallen back sharply towards last week's lows, over concern that supply chain, as well as worker shortages, could threaten the economic recovery," said CMC Markets chief market analyst Michael Hewson.

"As a consequence this could mean that inflationary pressures might become more persistent in the longer term."

Hewson said that while stock market investors appeared to be concerned about increasing inflation risk, given that appeared to be the narrative on Wednesday, bond markets appeared less so based on US 10-year yields, which were slightly lower.

"That said, weakness in commodity prices isn't exactly helping sentiment either, after Chinese authorities suggested curbs on aggressive increases in prices which have clobbered the mining sector, with the likes of Antofagasta, Anglo American, BHP, Rio Tinto and Glencore all down heavily."

Figures released earlier by the Office for National Statistics showed inflation hit its highest level in more than a year in April, amid higher household utility bills and clothes prices.

The consumer price inflation rate rose to 1.5% in the 12 months to April from 0.7% in March, coming in above expectations of 1.4% and marking the highest reading since March 2020.

According to the ONS, core inflation - which strips out volatile elements such as food and energy prices - increased to 1.3% from 1.1%.

On a monthly basis, CPI rose by 0.6% following a 0.3% increase in March.

"Inflation rose in April, mainly due to prices rising this year compared with the falls seen at the start of the pandemic this time last year," said ONS chief economist Grant Fitzner.

"This was seen most clearly in household utility bills and clothing prices.

"As the price of crude oil continues to rise, this has fed through to the cost of motor fuels, which are now at their highest since January 2020."

Russ Mould, investment director at AJ Bell, commented that inflation concerns were troubling investors, with the UK among a number of countries reporting a growing cost of living.

"A key focal point for the market is whether economies are running too hot and what central banks might do to cool them down."

In equity markets, miners were under the cosh as copper and iron prices fell, with Antofagasta down 3.44%, BHP losing 4.57%, Anglo American losing 4.71%, and Rio Tinto 3.38% weaker.

Mr Kipling and Bisto owner Premier Foods closed flat, after it reinstated its dividend after 13 years and hailed an "outstanding" year, underpinned by more at-home food consumption during the pandemic.

On the upside, plumbing and heating products distributor Ferguson gained 2.18%, as it lifted its full-year guidance after better-than-expected third-quarter results.

Infrastructure group John Laing leapt 11.25% after saying it had agreed to a £2bn takeover by US buyout firm KKR.

Media group Future advanced 10.69% as it said annual results would be well ahead of market expectations after profit more than doubled in the first half.

Dunelm gained 6.16% after the homeware retailer said annual pre-tax profit was set to be "significantly" ahead of analysts' expectations, as it hailed a strong performance in the five weeks since reopening.

Industrial thread manufacturer Coats Group was ahead 5.93% after saying its full-year performance would be "slightly ahead" of its previous expectations as it reported a return to organic revenue growth.

Drinks company C&C Group was also up, by 7.14%, after an upgrade to 'buy' at Berenberg.

Market Movers

FTSE 100 (UKX) 6,950.20 -1.19%
FTSE 250 (MCX) 22,234.53 -0.44%
techMARK (TASX) 4,239.24 -0.78%

FTSE 100 - Risers

Ferguson (FERG) 9,472.00p 2.18%
Imperial Brands (IMB) 1,636.00p 1.36%
Polymetal International (POLY) 1,694.00p 1.16%
DCC (CDI) (DCC) 6,050.00p 1.00%
BT Group (BT.A) 172.00p 0.88%
London Stock Exchange Group (LSEG) 7,312.00p 0.86%
SEGRO (SGRO) 1,014.00p 0.75%
Auto Trader Group (AUTO) 555.00p 0.58%
Rentokil Initial (RTO) 472.30p 0.51%
Rolls-Royce Holdings (RR.) 103.54p 0.41%

FTSE 100 - Fallers

Anglo American (AAL) 3,145.00p -4.71%
BHP Group (BHP) 2,138.00p -4.57%
Antofagasta (ANTO) 1,554.50p -3.44%
Rio Tinto (RIO) 6,030.00p -3.38%
Glencore (GLEN) 313.80p -3.33%
Weir Group (WEIR) 1,784.00p -2.86%
Mondi (MNDI) 1,903.00p -2.81%
Royal Dutch Shell 'A' (RDSA) 1,382.20p -2.79%
Royal Dutch Shell 'B' (RDSB) 1,324.80p -2.77%
Renishaw (RSW) 5,290.00p -2.75%

FTSE 250 - Risers

John Laing Group (JLG) 401.60p 11.25%
Future (FUTR) 2,650.00p 10.69%
4Imprint Group (FOUR) 2,740.00p 7.66%
C&C Group (CDI) (CCR) 315.00p 7.14%
Dunelm Group (DNLM) 1,550.00p 6.16%
Coats Group (COA) 62.50p 5.93%
Provident Financial (PFG) 262.20p 4.21%
Clarkson (CKN) 2,970.00p 4.03%
Dr. Martens (DOCS) 472.20p 2.92%
Watches of Switzerland Group (WOSG) 772.00p 2.39%

FTSE 250 - Fallers

Hochschild Mining (HOC) 193.80p -5.09%
Micro Focus International (MCRO) 478.20p -4.99%
WH Smith (SMWH) 1,656.00p -3.86%
Ferrexpo (FXPO) 468.80p -3.83%
CMC Markets (CMCX) 465.00p -3.63%
Meggitt (MGGT) 479.80p -3.56%
Network International Holdings (NETW) 385.90p -3.38%
Virgin Money UK (VMUK) 199.35p -3.18%
Petropavlovsk (POG) 25.18p -3.15%
BlackRock World Mining Trust (BRWM) 650.00p -3.13%