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Inflation hits 6.2% | Henry Boot rises | oil sanction talks


5pm: Oil rallies on Ukraine tensions

Shares in BP and Shell rallied as the price of Brent oil once again breached the $120-a-barrel barrier and the Ukraine war heightened tensions over supplies.

The FTSE 100 index closed down 16.09 points, or 0.2%, at 7,460.63 with BP up 4.5% and Shell 3.9% higher.

The two were boosted as the price of Brent crude was quoted at $121.99 a barrel at the close of equity trading on the London Stock Exchange. 

Housebuilders ended lower amid worries over the latest inflation figures. Taylor Wimpey fell 4%, Barratt Developments ended down 4.1% and Persimmon was 2.5% lower.

9.30am: Stocks shrug off inflation leap

Energy stocks were a major force behind the FTSE 100’s 22.7 (0.3%) rise to 7,499.45 as Brent Crude oil prices crept higher, up 1.3% to $116.97 per barrel.

“The FTSE 100 has a spring in its step despite the UK inflation rate going up again, and a potential cut in the country’s economic outlook when Chancellor Rishi Sunak announces his mini-Budget at lunchtime,” says Russ Mould, investment director at AJ Bell.

“After last night’s rally in the tech-heavy Nasdaq index in the US, tech-related stocks were in vogue on the UK market including a 1% rise in Scottish Mortgage Investment Trust. Even Ocado managed to gain some fans, which is something it has struggled to do in a long time.

“It feels as if investor confidence is starting to improve following a big wobble in recent weeks linked to the shock of the Ukraine crisis and how inflationary pressures have intensified around the world. “

7am: Inflation rises

Inflation rose to 6.2% in the 12 months to February, a 30-year high, and up from 5.5% in the 12 months to January.

The largest contributors to rising prices came from housing and household services (1.39 percentage points, principally from electricity, gas and other fuels, and owner occupiers’ housing costs) and transport (1.26 percentage points, principally from motor fuels and second-hand cars).

Labour’s shadow Chancellor Rachel Reeves said: “With inflation spiralling even further today, the choice before the Chancellor is clear.

“As he heads into his Spring Statement, he can either choose an unfair tax rise on working people and business at the worst possible time.

“Or he can cancel his tax rise, and ease the cost of living hitting families by cutting energy bills by up to £600 through bringing in a one-off windfall tax on oil and gas producer profits.

“Labour is on the side of working people. We will tax fairly, spend wisely and grow our economy.”

… more follows

7am: Henry Boot

Construction group and property investor posted revenue of £230.6m (2020: £222.4m), up 3.7%, driven by residential land sales.

Profit before tax increased to £35.1m (2020: £17.1m) up 105.3%, driven by strong performance of residential land sales, industrial development, investment property revaluation gains and returns from joint ventures.

The company proposes a final dividend of 3.63p (2020: 3.30p), an increase of 10%, reflecting the group’s strong operational performance and bringing the total dividend for the year to 6.05p.

Global markets

Crude oil futures in Asian trading hours Wednesday climbed higher as the European Union indicated it is ready to impose additional sanctions on Russia over the invasion of Ukraine, while a drop in US crude inventories also underpinned prices.

Brent futures were trading at $116.59/barrel (0600 GMT).

Josep Borrell, the EU’s foreign policy chief, said he expects leaders to discuss further sanctions against Russia when they meet in Brussels on Thursday, although analysts say a tightening of financial sanctions are more likely than a full ban on Russian energy.

This is unlikely to happen in the near term as Germany said Russian imports are critical to the continent’s energy security. About a quarter of Europe’s crude oil and a third of its natural gas supply comes from Russia.

The FTSE 100 was expected to open 40 points higher as early market attention focuses on the UK inflation figures and Rishi Sunak’s spring statement.

London’s blue chip index and Germany’s DAX both closed at three-week highs while Wall Street also closed on an upbeat mood.

The Dow Jones gained 0.74%, the S&P 500 added 1.13% and the Nasdaq climbed 1.95%.

In Asia, Japan’s Nikkei rallied 3% and Hong Kong’s Hang Seng was 1.7% higher. The Shanghai Composite rose by 0.32%.

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