UK stocks finished with small losses on Tuesday after a choppy trading session as the FTSE 100 teetered at record highs.
Markets were struggling for direction for the whole day as investors weighed sticky inflation and an underwhelming start to fourth-quarter earnings season in the US, while UK retail sales growth slowed to its lowest in seven months.
The FTSE 100 finished 0.03% lower at 10,137.35, after settling at a record 10,140.70 on Monday. The index, which had already been trading at all-time highs before the new year, has already gained a further 2.1% over the year to date.
"Investor fatigue seems to have set in," according to Axel Rudolph, senior technical analyst at IG, with a number of global benchmarks currently trading at or close to record highs. "It was bound to happen at some stage, giving the strong start to the year," he said.
Stocks on Wall Street fell after the opening bell after data showed that the annual rate of US consumer price inflation was unchanged for the second month in a row at 2.7% in December. Kathleen Brooks, research director at XTB. said that the recent rise in energy prices means "there is no clear disinflation trend in the US economy right now".
The release comes amid heightened tensions between Donald Trump and the Federal Reserve as the US president continues to call for lower interest rates to spur economic growth. The Fed, however, has shown caution on the back of consistent price pressures.
The spat escalated this weekend after the Department of Justice launched a criminal investigation into Jerome Powell, which the Fed chair said was an attempt to disrupt central bank independence through "political pressure or intimidation".
Meanwhile, the start of earnings season got off to a negative start, with heavyweights JPMorgan Chase & Co and Delta Airlines falling following their quarterly numbers.
On home shores, the latest figures from the British Retail Consortium showed that retail sales underwhelmed in December as consumers refrained from splashing out until the January sales. According the latest BRC-KPMG retail sales monitor, UK total retail sales increased by just 1.2% year-on-year last month, easing from the 1.4% increase in November.
Whitbread jumps on results; Games Workshop falls
Whitbread surged 7% after solid demand for its hotels during the third quarter helped offset weaker food and drink sales. The hospitality company, which reiterated its full-year outlook, also said it now expects the cost impact from the proposed change in business rates to be around £35m, lower than its initial estimate for between £40m and £50m.
JD Sports was higher as analysts at Citi welcomed the retailer's agreement on Monday with digital commerce tech firm Commercetools, which will give customers the ability to make one-click purchases on AI platforms including Copilot, Gemini and ChatGPT.
Heading the other way was Games Workshop, which lost ground even as it posted a "record" first half as demand for its Warhammer battle figurines continued to soar. Dan Coatsworth, head of markets at AJ Bell, said the company "didn't offer anything to get the market too excited".
Rentokil fell after saying it has appointed Mike Duffy as chief executive and an executive director with effect from 16 March. He will join the company on 16 February as CEO designate. Duffy succeeds Andy Ransom.
On the FTSE 250, Trustpilot surged 12% after saying it expects 2025 profits to be ahead of market expectations, after an acceleration of growth in the second half. The company also beefed up its share buyback plan to $40m from $30m previously.
Market Movers
FTSE 100 (UKX) 10,137.35 -0.03%
FTSE 250 (MCX) 22,931.97 -0.46%
techMARK (TASX) 5,795.31 -0.90%
FTSE 100 - Risers
Whitbread (WTB) 2,767.00p 7.08%
Pershing Square Holdings Ltd NPV (PSH) 4,850.00p 2.71%
BP (BP.) 436.90p 2.41%
Melrose Industries (MRO) 645.80p 2.35%
Shell (SHEL) 2,722.00p 2.27%
British American Tobacco (BATS) 4,205.00p 2.09%
Metlen Energy & Metals (MTLN) 43.92p 1.91%
JD Sports Fashion (JD.) 84.86p 1.75%
Rolls-Royce Holdings (RR.) 1,305.00p 1.40%
Rio Tinto (RIO) 6,214.00p 1.29%
FTSE 100 - Fallers
Flutter Entertainment (DI) (FLTR) 14,985.00p -4.40%
Smith & Nephew (SN.) 1,203.00p -4.07%
Kingfisher (KGF) 312.80p -3.72%
Convatec Group (CTEC) 236.00p -3.28%
Entain (ENT) 726.00p -3.12%
Rentokil Initial (RTO) 458.90p -3.10%
CRH (CDI) (CRH) 9,404.00p -3.09%
Vodafone Group (VOD) 98.66p -2.61%
Admiral Group (ADM) 3,004.00p -2.59%
Severn Trent (SVT) 2,748.00p -2.59%
FTSE 250 - Risers
Trustpilot Group (TRST) 210.20p 11.69%
Ceres Power Holdings (CWR) 278.80p 8.57%
Ithaca Energy (ITH) 170.00p 4.81%
Senior (SNR) 229.00p 4.57%
Gamma Communications (GAMA) 917.00p 3.85%
Spire Healthcare Group (SPI) 182.40p 3.64%
Future (FUTR) 524.00p 2.34%
Oxford Instruments (OXIG) 2,200.00p 2.33%
4Imprint Group (FOUR) 4,255.00p 2.28%
Harbour Energy (HBR) 202.00p 2.07%
FTSE 250 - Fallers
THG (THG) 43.64p -8.93%
Pagegroup (PAGE) 208.60p -6.62%
SSP Group (SSPG) 189.30p -4.20%
GB Group (GBG) 237.00p -3.66%
Shawbrook Group (SHAW) 441.00p -3.50%
Close Brothers Group (CBG) 486.00p -3.09%
IntegraFin Holding (IHP) 340.50p -2.99%
Kier Group (KIE) 217.00p -2.91%
Carnival (CCL) 2,265.00p -2.66%
Applied Nutrition (APN) 247.00p -2.56%