London stocks edge lower ahead of US inflation data; Melrose jumps

UK stocks slipped for a second straight session on Wednesday amid investor caution ahead of U.S. inflation data, while Melrose ‘s upbeat outlook lifted the aerospace firm’s shares to an over three-year high.

Melrose Industries Plc (LON:MRON) said it will continue as a pure-play aerospace company after the recent spin-off of its automotive unit and also forecast FY revenue in line with estimates, sending its shares 4.1% higher.

The FTSE 350 aerospace and defense sector housing the stock added 1.0%.

The blue-chip FTSE 100 fell 0.2%, bogged down by a 0.5% drop in healthcare firms (FTNMX201030) as shares of AstraZeneca (NASDAQ:AZN) Plc fell marginally.

The mid-cap FTSE 250 also lost 0.2% by 8:27 GMT, with ASOS (LON:ASOS) Plc among top losers as the retailer swung to a first-half loss, sending its shares 12.1% lower to a near four-month low.

Investors eye April consumer inflation data in the world’s largest economy, due at 1230 GMT, which could impact rate-cut expectations by the Federal Reserve this year.

“UK markets have been caught up with global sentiment, which is slight uncertainty about the path ahead for the U.S.,” said Giles Coghlan, chief market analyst at HYCM.

“The Fed indicated a potential pause in rate hikes, which should be supportive for stocks, but there’s uncertainty about the path of U.S. economic growth.”

Both the FTSE indexes have had a disappointing start to the week as investors also weigh the outlook for monetary tightening by the Bank of England, which is expected to hike rates by 25 basis points on Thursday in its cautious battle against inflation amid a stalling economy. <0#BOEWATCH>

Compass Group (LON:CPG) Plc surged 1.7% after the world’s largest caterer raised its fiscal 2023 expectations and announced a 750 million pound share buyback.

J D Wetherspoon Plc added 6.7% after the pub group forecast full-year results to be closer to the top-end of market expectations.