(Alliance News) - London's FTSE 100 largely tread water on Thursday morning, though continental peers shot up, with European markets in a largely confident mood ahead of a US inflation report.

"The stock market had an excellent beginning to the year's first half but encountered difficulties in August. With gasoline and oil prices soaring this month, traders gradually became anxious about the possibility of inflation reaccelerating, which might interrupt the US's disinflationary process before core inflation can be squashed. And this has caused many to worry about the potential for a more hawkish- for- longer central bank monetary policy that will negatively impact the market," SPI Asset Management analyst Stephen Innes commented.

"A report later on Thursday will offer a big clue on whether broader core inflation concerns are warranted. But ahead of the dog days of summer, markets desperately need a much friendlier risk backdrop, which a softer-than-expected US CPI print could catalyze."

The FTSE 100 index opened up 6.06 points, 0.1%, at 7,593.36. The FTSE 250 was up 64.45 points, 0.3%, at 19,001.65, and the AIM All-Share was down 0.36 of a point at 757.62.

The Cboe UK 100 was up 0.2% at 757.28, the Cboe UK 250 was up 0.5% at 16,673.29, and the Cboe Small Companies was up 0.1% at 13,609.68.

In European equities on Thursday, the CAC 40 in Paris was up 1.4%, while the DAX 40 in Frankfurt was up 0.9%.

A host of ex-dividend stocks kept the FTSE 100 more in check though. Among those were Rio Tinto, NatWest and HSBC, which lost 2.8%, 1.5% and 1.3%.

Thursday's US inflation data is reported at 1330 BST. According to FXStreet-cited consensus, headline inflation in the US is expected to pick-up to a 3.3% annual rise in July, from 3.0% in June.

However, if the headline rate was to undershoot the consensus, it would take some sting off US Federal Reserve interest rate expectations, and potentially put pressure on the dollar.

Ahead of the reading, the dollar was largely lower.

Sterling was quoted at USD1.2748 early Thursday in London, climbing from USD1.2717 at the London equities close on Wednesday. The euro traded at USD1.1008, up from USD1.0977. Against the yen, the dollar was quoted at JPY143.85, up versus JPY143.60.

In London, Spirax-Sarco fell 6.7% as its sales to the pharmaceutical and biotechnology sectors continue to suffer amid destocking.

The thermal energy management and pumping company said destocking in Biopharm, which refers to sales from the Watson-Marlow division to pharma and biotech, "is now expected to continue into 2024".

For the six months to June 30, group revenue improved 13% to GBP850.8 million from GBP750.1 million a year earlier. Pretax profit declined by 18% to GBP114.0 million from GBP138.5 million.

Operating costs rose 18% to GBP718.6 million, while financial expenses jumped to GBP22.3 million from GBP5.5 million.

Spirax lifted its dividend by 8.2% to 46.0 pence from 42.5p.

Entain fell 2.0%, after it backed expectations but explained it has a "sufficient degree of confidence" to take a GBP585 million provision for a possible settlement of an ongoing UK probe of its legacy business in Turkey.

The gambling firm said revenue in the six months ended June 30 climbed 11% on-year to GBP2.38 billion from GBP2.09 billion. Net gaming revenue, which excludes value-added tax and goods and services tax, rose 14% to GBP2.40 billion from GBP2.12 billion.

Entain swung to a pretax loss of GBP502.5 million, from profit of GBP28.1 million, reflecting the HMRC provision.

In May, Entain said it was in talks with the UK Crown Prosecution Service regarding an ongoing investigation by HM Revenue & Customs into a potential breach of the bribery act at its former Turkey-facing business, which was sold in 2017.

"The [deferred prosecution agreement] negotiations have now progressed to the point where the company believes that it is likely to be able to agree on a resolution of the HMRC investigation insofar as it relates to the company and the group," Entain explained on Thursday.

The full terms of the agreement are yet to be confirmed and are subject to judicial approval.

However, it has booked the GBP585 million provision for a potential settlement, which would be paid over a four-year period.

Persimmon added 3.1%, as it backed profit expectations but tipped home completions to be robust.

Its half-year earnings declined, however, amid an under-pressure UK housing market.

Persimmon's revenue in the first-half of 2023 fell 30% to GBP1.19 billion from GBP1.69 billion a year earlier. Pretax profit slumped roughly two-thirds to GBP151.0 million from GBP439.7 million.

Chief Executive Dean Finch said: "Against a backdrop of higher mortgage rates, the removal of Help to Buy and significant market uncertainty, Persimmon has delivered a robust sales rate excluding bulk sales whilst growing the private average selling price in our forward order book and also securing cost savings. We are on track to deliver profit expectations for the year and are building a platform for future growth."

Looking ahead, Persimmon expects full-year completions of at least 9,000, the top end of its previously guided range of 8,000 to 9,000. It expects operating profit "in line with expectations given stubborn build cost inflation in the period".

Watches of Switzerland backed its guidance. Its stock rose 3.5%.

Its first-quarter revenue declined slightly, though it said demand for luxury watches "remains robust and continues to exceed supply".

Revenue in the 13 weeks to July 30 declined 2.3% to GBP382 million from GBP391 million a year earlier, an outcome in line with guidance. US revenue alone grew 7% to GBP163 million.

Looking ahead, it still expects annual revenue between GBP1.65 billion and GBP1.70 billion, growth of 8% to 11% at constant currency.

Elsewhere in London, stockbroking and administration services provider Jarvis Securities lost 15% as it warned of a costlier-than-expected probe on one of its divisions.

A "skilled person" is reviewing the system and controls of its Jarvis Investment Management unit. The company has suffered amid "associated restrictions on Model B clients". This has led to the loss of some customers and revenue in the Model B division.

"In addition the costs associated with the skilled person review are higher than anticipated. These factors, combined with reduced trading volumes caused by market conditions, mean that the company is now trading below current market expectations," Jarvis warned.

Gold was quoted at USD1,918.55 an ounce early Thursday, rising from USD1,916.66 on Wednesday. Brent oil was trading at USD87.70 a barrel, higher than USD86.92.

By Eric Cunha, Alliance News news editor

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