FTSE dips into red amid trading caution before UK inflation data

The FTSE 100 inched lower as London traders cautiously await Wednesday’s inflation figures.

A jump in the US CPI inflation reading still did little to shift a subdued set of European markets.

The session had started brightly for the FTSE, and particularly banking stocks, after the Bank of England changed its guidance over the payment of dividends for finance firms.

However, sentiment cooled sufficiently for many banking stock to close lower, with Natwest among the day’s worst performers at the close.

London’s top flight closed 0.7 points, or 0.01%, lower at 7,124.72 on Tuesday.

Danni Hewson, financial analyst at AJ Bell, said: “Wall Street hasn’t really been able to make up its mind today about how it feels about the last inflation data.

“Certainly in London markets have been pretty subdued, no doubt treading water until investors get sight of the UK’s own inflation figures tomorrow morning.

“An early boost from the Bank of England’s go-ahead to banks that they can follow their US counterparts and start to dole out dividend payments again faded quickly.”

In the US, it was a mixed bag with the Dow Jones nudging lower and the Nasdaq making gains, as a surge in used car sales proved the biggest contributor to rising inflation.

Continental Europe’s leading markets followed the FTSE in nudging only marginally lower.

The German Dax decreased by 0.01% and the French Cac also moved 0.01% lower.

Meanwhile, sterling failed to make ground against a hot dollar, stoked by the 5.4% inflation reading.

The pound was flat versus the US dollar at 1.385 and was 0.15% higher against the euro at 1.172.

Travel stocks had another weak showing as rising case numbers and a disappointing Government update on Monday continued to weigh on the sector.

In company news, Howden Joinery saw its shares make gains after the continued home improvement boom lifted its first-half revenues above predicted levels.

The kitchen products provider said it expects a sharp rise in annual profit as a result of a 69% jump in sales to £785 million for the period.

Shares in the company were 31p higher at 883.2p as a result.

Boohoo Group improved in value on Tuesday after analysts at RBC said the online retail giant’s shares were “attractively valued”.

The analysts also said that the company is making progress with achieving its ESG goals, having seen sentiment dented by a supply chain scandal last year.

Boohoo finished the day up 1.9p at 291.4p.

Cineworld was one of the day’s major fallers despite the big opening of Marvel’s Black Widow last week.

The cinema operator closed 5.24p lower at 68.26p amid reports of high levels of streaming transactions which are likely to dent potential footfall.

The price of oil moved slightly higher again as the strength of the US dollar provided a boost to energy prices.

Brent crude increased by 1.09% to 75.98 dollars per barrel.

The biggest risers on the FTSE 100 were Fresnillo, up 24.6p at 815p, Ashtead Group, up 10.8p at 5,708p, Rentokil, up 9p at 520p, and Halma, up 48p at 2,850p.

The biggest fallers of the day were Natwest, down 5.4p at 201.4p, IAG, down 3.98p at 173.02p, Rolls-Royce, down 2.13p at 93.61p, and Whitbread, down 57p at 2,981p.