The UK’s top stock index treaded water on Wednesday while the pound continued to weaken against the dollar after new official data showed US inflation crept up last month.
The FTSE 100 was declining during the day but managed to gain 4.56 points, or 0.06%, late in the afternoon to close at 8,030.33.
It was dragged lower amid losses for stocks including housing groups Barratt Redrow, Persimmon and Rightmove, but these were outweighed by gains including a more than 10% jump in the share price of Smiths Group.
While US inflation coming in line with expectations means no nasty surprises for markets, the real quandary for the Federal Reserve is what do they do with rates from this point
The engineering firm told investors it was anticipating higher revenue growth this year than it previously thought, after a strong start to the year and a record order book.
Meanwhile, the pound weakened further against the US dollar, which has continued to rally since the presidential election result last Wednesday.
It also came as official figures showed US inflation rose to 2.6% in October, which was expected among many economists but nonetheless raised questions over the central bank’s next move on interest rates.
Sterling was down about 0.3% to 1.271 dollars, while it was up about 0.2% against the euro at 1.203.
“While US inflation coming in line with expectations means no nasty surprises for markets, the real quandary for the Federal Reserve is what do they do with rates from this point,” said Lindsay James, investment strategist at Quilter Investors.
“US inflation is proving rather stubborn to get at or below target, unlike other developed economies in Europe, so any rate cuts again this year appear like they might just have to be reversed again should inflation spike.”
In New York, the S&P 500 was up about 0.2%, and the Dow Jones was 0.4% higher by the time European markets closed.
In Paris, the Cac 40 was down 0.14%, and in Frankfurt, the Dax was 0.16% lower at the close.
In other company news, investors cheered Just Eat announcing the sale of its US business Grubhub, two years after first unveiling plans to strike a deal.
Food delivery start-up Wonder paid 650 million US dollars (£503 million) for the business, roughly 6.7 billion dollars (£5.2 billion) less than Just Eat bought it for in 2020.
Just Eat shares were up about a fifth on Wednesday morning, and closed 14.8% higher.
Elsewhere, energy firm SSE announced the retirement plans of its chief executive Alistair Phillips-Davies after 11 years at the helm.
He will stay on until it appoints his successor.
SSE also revealed its half-year profit was more than a quarter higher than a year prior, led by a sharp jump in earnings at its renewables arm amid strong output across its array of wind farms. Its share price closed 0.6% lower.
The biggest risers on the FTSE 100 were Smiths Group, up 159p to 1,681p, Vodafone, up 2.04p to 69.06p, Standard Chartered, up 21.6p to 945p, Fresnillo, up 10.5p to 633.5p, and Diploma, up 76p to 4,594p.
The biggest fallers on the FTSE 100 were Intermediate Capital, down 162p to 2,078p, DCC, down 215p to 5,455p, ConvaTec, down 8p to 256.4p, Segro, down 22p to 754.8p, and BAE Systems, down 37p to 1,344.5p.
