FTSE stocks lack catalysts as shop price inflation slows, Rolls-Royce outperforms

The FTSE 100 opened lower on Tuesday despite UK shop price inflation falling for the sixth straight month. The BRC-Nielsen Shop Price Index showed annual inflation slowing to 4.3% in November from 5.2% in October. Food inflation also moderated to 7.8% from 8.8%.

Rolls-Royce was a standout gainer in the FTSE 100, jumping 5.8% after laying out new financial targets for 2027. The engine maker is targeting £2.5-£2.8 billion in operating profit, representing a “step change.” It also set free cash flow and margin goals. Rolls-Royce said recent trading was in line and that 2023 profit and cash will be “materially ahead” of 2022.

In other FTSE 100 moves, Lloyds and Frasers rose on broker upgrades, while Pearson shed 2% on a downgrade.

In the FTSE 250, easyJet gained 3.8% after swinging to a £432 million profit in 2022 and reinstating dividends. The airline cited a “record” summer performance.

On AIM, Supreme Industries surged 13% after its interim profit nearly tripled. It also upgraded full-year guidance on strong Q3 trading. The battery and vaping products group now sees 2024 revenue of £210-225 million, up from prior guidance of £195-205 million.