LONDON: London’s FTSE 100 edged higher on Wednesday, helped by gains in consumer companies and data showing a modest easing in domestic inflation, although a slide in mining stocks capped the advance.
Reversing an earlier fall of 0.25%, the blue-chip FTSE 100 index scraped into positive territory to close 0.1% higher, with consumer staples stocks including Diageo, Unilever and British American Tobacco among top gainers.
The UK mining index fell 1.2% in its worst session in two-weeks as industrial metals prices fell on China’s pledge to bring down coal prices amid an energy squeeze in the country.
Rio Tinto, the world’s biggest iron ore miner dropped 3.3% after it raised its capital spending plans for next year and announced a $7.5 billion plan to reduce carbon emissions by 50% by 2030.
UK consumer prices rose 3.1% in annual terms in September, slowing unexpectedly from 3.2% in August and falling short of the 3.2% estimated by a Reuters poll of economists.
Still, investors feared that the unexpected slowdown was only a temporary relief as prices of most other consumer goods and services continued to rise, while food prices fell more slowly than in September last year.
“The miss in UK CPI inflation is most likely down to base effects and the end of the ‘Eat Out to Help Out’ scheme in August last year,” said Adam James Seagrave, global head of sales trading at Saxo Markets, referring to a government scheme to encourage diners back to restaurants.
“We expect the number to rise again next month, but it’s worth noting that a lot of the factors pushing on the upside are non-core like food, travel and housing.”
The mid-cap index was down 0.4%, with travel stocks such as TUI, EasyJet and Wizz Air underperforming again amid fears of a new wave of COVID-19 infections.
Deliveroo rose 3.8% after it lifted its full-year growth forecast and reported a jump in the gross value of its orders in the third quarter.
British consumer goods company Unilever rose 0.8% after rival Nestle upgraded its full-year growth outlook based on coffee and pet food sales.
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