FTSE slips on inflation jitters
Further gains for shares in BP and Royal Dutch Shell were offset by profit-taking at Rolls-Royce and British Airways owner IAG as the FTSE 100 index fell 0.4% to 7.032.38 today.
The latest rise in Brent crude to above $80 a barrel triggered fresh rises of more than 2% for the oil giants, but sentiment was otherwise downbeat on fears about how inflationary pressures might impact the global economic outlook.
Federal Reserve chair Jerome Powell is due before Congress later today amid worries that central banks may have to take earlier-than-expected action on interest rates.
Accountancy software group Sage was London’s biggest faller, off 34p at 706.8p, and there were also big declines for industrial technology firm Aveva and credit checking business Experian.
Rolls-Royce also fell back from last night’s 18-month high, having surged 11% yesterday on the back of a deal with the US Air Force and amid hopes for a rebound in engine flying hours.
Shares were 5p cheaper at 142.4p, while IAG also gave up 5p to 181.3p after rising sharply yesterday. Smiths Group was the biggest riser in the top flight, up 3% or 41p to 1,405p, after announcing a dividend hike alongside plans for a £737 million share buyback in the wake of the sale of its medical devices business.
Rentokil Initial shares were closely watched as the pest control-to-cleaning firm Rentokil upped its growth targets and announced plans to expand its hygiene arm amid booming demand during the pandemic.
The group hiked sales and earnings goals, lifting its organic medium-term revenue growth target to between 4% and 5%, up from 3% to 4% previously.
Rentokil’s shares were 9p lower at 568.4p, despite some positive City reaction to its strategy update. Jefferies has a price target of 650p, while Davy analyst David Greenall reiterated his outperform rating and upgraded medium-term growth forecasts.
Go-Ahead shares came off the rails, sliding 17% after the government seized control of its Southeastern contract as the company revealed it had repaid £25 million to the Department of Transport after admitting to financial errors in relation to the franchise.
Finance boss Elodie Brian is standing down with immediate effect and will be replaced on an interim basis by Gordon Boyd, who has previously held roles at Drax and Capita.
Shares were 172.5p lower at 852.5p.