The FTSE 100 (^FTSE) and European stocks were mixed on Tuesday as UK shop price rises returned back to normal levels, according to the British Retail Consortium (BRC) and research firm NielsenIQ.
Prices rose at an annual rate of 0.6% in May, down from 0.8% in the previous month. The figures also showed that food inflation fell for the thirteenth month in a row to 3.2%.
“This was helped by slowing food inflation, with fresh food inflation falling to its lowest level since November 2021,” said Helen Dickinson, chief executive of the BRC.
“Meanwhile, ambient food inflation remained stickier, especially for sugary products which continued to feel the effects of high global sugar prices. In non-food, retailers cut furniture prices in an attempt to revive subdued consumer demand for big-ticket items, and football fans have been able to grab some bargains on TVs and other audio-visual equipment ahead of this summer’s Euros.”
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London’s benchmark index was 0.1% lower in early trade.
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Germany’s DAX (^GDAXI) rose 0.2% and the CAC (^FCHI) in Paris headed 0.2% into the red.
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The pan-European STOXX 600 (^STOXX) was flat on the day.
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Wall Street is set to open higher as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all in the green.
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The pound was treading water against the dollar (GBPUSD=X), up just 0.05% at 1.2775.
“Last week’s election announcement is causing some short-term volatility in the markets, but longer-term investors can usually take this as background noise,” Guy Lawson-Johns, equity analyst at Hargreaves Lansdown, said.
“”In the US, despite bright spots and a booming Memorial Day weekend for travel, the usual summer slowdown in stock markets may be more pronounced this year. Inflation concerns and an early presidential debate could weigh on a rally that has pushed the S&P 500 near record highs.
“With the S&P 500 trading at a premium compared to historical norms and few catalysts for further gains, the traditionally slow summer season could be more turbulent than usual.”
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