FTSE 100 down after strong inflation; Indivior jumps

By Ambar Warrick

(Reuters) -London’s FTSE 100 inched lower on Wednesday as gains in commodity stocks were offset by losses in retailers following a spike in January inflation, while Indivior jumped on its plans for a U.S. listing.

The blue-chip FTSE 100 index ended 0.1% lower with consumer staples leading losses, while the benchmark midcap index fell 0.1%.

Data showed inflation hit a near 30-year high in January, supporting bets on a further rate rise to 0.75% or 1% by the Bank of England in March.

“Just how long shoppers will keep splashing the cash will be an increasing cause for concern for retailers especially with the one-two punch of another interest rate rise in March, and energy bills being hiked dramatically in April,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

The pound also rose after the data, weighing on dollar earning companies with Diageo, Unilever, British American Tobacco Reckitt Benckiser all down 0.3% and 2%.

Oil majors Shell and BP both gained nearly 2% as they tracked stronger crude oil prices. [O/R]

“Inflation has inched up again, but hostilities over Ukraine seem to be ticking down and investors are seeking solace that for now there are no big shocks to the system,” Streeter said.

Meanwhile, financials fell 1.2%, tracking a fall in British two-year government bond yields, as investors pared back their expectations for a Bank of England interest rate rises over the next three months.

UK stocks had rallied on Tuesday amid reports of some troop withdrawals by Russia from near the Ukraine border. But the reports were regarded with some scepticism by western leaders.

Indivior rose 14.0%, recording its best session in nearly one and half year, after the opioid addiction treatment maker said it was exploring a secondary listing in the United States, its biggest market, following a rise in annual sales.

(Reporting by Ambar Warrick; Editing by Shailesh Kuber, William Maclean)