Last checked at 
(Alliance News) - European equities made a slow start to Wednesday, with London's FTSE 100 treading water as the pound received some impetus following UK inflation data.
Meanwhile, markets in Asia endured a poor session, with slowing retail sales in China hurting sentiment. Hong Kong's Hang Seng Index fell amid declines in the technology sector as well as gambling stocks.
"Market risk tone remained subdued this morning on ongoing concerns about economic slowdown. Chinese data overnight confirmed weaker activity as a result of measures to tackle the delta variant," analysts at Lloyds commented.
The FTSE 100 index was down 3.65 points, or 0.1%, at 7,030.41. The mid-cap FTSE 250 index was down 69.21 points, 0.3%, at 23,618.05. The AIM All-Share index was down 0.77 of a point, 0.1%, at 1,277.18.
The Cboe UK 100 index was down marginally at 699.64. The Cboe 250 was down 0.4% at 21,362.89, and the Cboe Small Companies was down a touch at 15,482.92.
In mainland Europe, the CAC 40 stock index in Paris and the DAX 30 in Frankfurt were 0.1% lower.
The pound was quoted at USD1.3838 early Wednesday in London, down from USD1.3845 late Tuesday. It was trading at USD1.3812 shortly before the inflation data was released, however.
The euro stood at USD1.1816 early Wednesday, down from USD1.1821 at the European equities close on Tuesday. Against the yen, the greenback was trading at JPY109.47, down from JPY109.65.
UK consumer price growth increased in August, showing the quickest acceleration since records began, data on Wednesday revealed.
The UK annual inflation rate jumped to 3.2% in August from 2.0% in July. According to consensus cited by FXStreet, a smaller increase to 2.9% was expected.
"The increase of 1.2 percentage points is the largest ever recorded increase in the CPI National Statistic 12-month inflation rate series, which began in January 1997," the Office for National Statistics said.
On a monthly basis, consumer prices rose 0.7% in August, having been flat in July.
In August of last year, consumer prices had fallen 0.4% monthly and had risen 0.2% annually.
Interactive Investor analyst Richard Hunter commented: "The figure will remain elevated for the moment with the squeeze in supply chains, higher raw material prices and wage inflation all adding pressure. The Bank of England will likely reiterate its stance in line with the Fed that the issue is temporary, and while the next few readings will continue to influence the timing of any monetary policy tightening, a rise in interest rates is not seeing as being on the cards until perhaps 2023."
In London, Ladbrokes owner Entain and Sky Bet owner Flutter were among the worst performers, down 1.6% and 0.8%. Fears for the gambling industry in Macau filtered through to the London stock market.
Shares in Macau casino operators tumbled as the city revels plans to crackdown on the gambling sector.
The Macau government announced a 45-day public consultation on Wednesday, including a proposal for direct supervision over the gambling industry, which has faced increasing scrutiny from authorities in recent years.
Casino operators Wynn Macau and Sands China were down 27% and 31%, respectively in Hong Kong. Over in New York, Sands China parent Las Vegas Sands lost 9.8% on Tuesday, while MGM Resorts fell 3.9%.
The Hang Seng index in Hong Kong was down 1.7% in late trade. In China, the Shanghai Composite ended 0.2% lower, while the Nikkei 225 index in Tokyo closed down 0.5% and the S&P/ASX 200 in Sydney closed 0.3% lower.
Weaker retail sales in China growth hurt sentiment. Growth in China's retail sales slowed in August to a 12-month low, data showed, as parts of the country were hit by lockdowns and other containment measures to fight the worst Covid outbreak since its initial spread in 2020.
Retail sales grew by 2.5% in August, well short of the 7% forecast and sharply down from the 8.5% pace witnessed in July. The reading was the lowest since August 2020.
"Government officials tried to put a brave face on the data, blaming flooding and lockdowns in August," Oanda analyst Jeffrey Halley commented.
"With regards to the retail sales data though, one can't divorce the slump in consumer confidence from the ongoing shared prosperity multi-sector government crackdowns, where job losses are an inevitability."
Back in London, Tullow Oil was the best mid-cap performer, rising 5.9%. The oil and gas exploration firm posted a swing to a pretax profit of USD213 million in the six months to June 30, from a low of USD1.44 billion a year earlier.
Revenue slipped 0.6% year-on-year to USD726.8 million from USD731.0 million.
Working interest production volumes fell to 61,230 barrels of oil equivalent per day, from 77,700 boepd.
Chief Executive Rahul Dhir commented: "Strong operational performance in the first half of the year and a transformational debt refinancing have put Tullow on a firm footing to deliver our business plan. Our West Africa production assets have performed well, and we are narrowing production guidance for 2021 to the upper end of the range."
Looking ahead, it expects annual output between 58,000-61,000 boepd. It had previously guided for annual output between 55,000 to 61,000 bopd.
Strong oil prices also helped the stock on Wednesday. Brent oil was quoted at USD74.36 a barrel early Wednesday, up from USD73.74 a barrel at the London equities close on Tuesday. Gold was quoted at USD1,800.47 an ounce, down from USD1,807.10.
Tullow Oil will exit the FTSE 250 once the index latest review becomes effective on Monday. One of the stocks replacing it is cybersecurity firm Darktrace.
Shares in Darktrace rose 8.0%, it said revenue in the financial year that ended June 30 surged. However, its loss ballooned.
The cybersecurity firm's revenue jumped 41% to USD281.3 million from GBP199.1 million. Growth was "robust" across all its markets.
However, its pretax loss widened considerably to USD147.6 million from USD26.9 million. Finance costs soared to USD109.2 million from USD2.4 million.
These non-cash costs were related to convertible loan notes issued to some shareholders back in July 2020. "These notes and associated finance costs were eliminated upon conversion to equity with the IPO," Darktrace noted.
The company raised its revenue guidance for financial 2022 to between 35% and 37% growth from 29% to 32% growth previously forecast.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
