The FTSE 100 and European stocks finished mixed this Wednesday as traders in the UK digested today's slowdown in inflation.
Across the pond, stocks were lower despite early gains following a bigger-than-expected drop in December retail sales that supported hopes of smaller interest rate hikes by the Federal Reserve.
In London, Ocado (OCDO.L), which was the biggest faller last session managed to bounce back and was one of the top risers, with shares up 2.97%. Miners Glencore (GLEN.L) and Experian (EXPN.L) both advanced around 4% as commodities prices like copper soar.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "Burberry’s shares had been climbing back towards pre-pandemic highs buoyed by expectations of higher demand due to China’s re-opening but this isn’t yet showing up in the figures, with sales growth overall disappointingly slowing to 1%.
"The Chinese market continues to be sideswiped by the pandemic, with store sales down 23%. Investors will need another big dose of patience before well-heeled Chinese shoppers snap back into boutiques and international stores.
"However, elsewhere festive sales surged particularly across Europe with double digit growth recorded. In particular, the acceleration of sales of leather ranges are an encouraging sign. Efforts to elevate the brand have been paying off, given that a luxe image is rewarded by improved loyalty among its wealthy customers, who are far more insulated from inflationary pressures."
Inflation, which measures the rate of price rises, fell to 10.5% in the year to December from 10.7% in November.
Daniel Casali, chief investment strategist at wealth management firm Evelyn Partners, said: ‘Another slowing in annual inflation – the second since October’s peak of 11.1% – will add to the newfound sense of optimism in the UK economy, triggered by last week’s surprisingly positive monthly GDP growth data.
"But these are fairly marginal decelerations in prices, inflation remains elevated and together with likely negative annual GDP growth in 2023 this remains a risk for both markets and households.
"The Bank of England will welcome softening inflation but for its rate-setters the receding of price pressures has some way to go before they take the foot off the rates pedal, and particularly if growth continues to surprise on the upside and if growing wage demands prove successful."
Meanwhile, Brent crude (BZ=F) rose and was trading at around $87/barrel, amid the prospects of rising demand in China as the economy in the world’s biggest oil importer gradually bounces back.
In Asia, Tokyo’s Nikkei 225 (^N225) closed higher on Tuesday, jumping 2.50% to 26,791 points, while the Hang Seng (^HSI) in Hong Kong rose 032% to 21,645. The Shanghai Composite (000001.SS) finished flat at 3,224.
Watch: What does the December PPI mean for markets?