Highlights
- FTSE 100 down 5 points at 10,656
- Rio Tinto report passes muster
- Gilt yields edge lower
European stocks edge higher as chip selloff slows and CPI looms
European stock markets made steady gains in early trading on Wednesday, with US futures also rising ahead of the key September inflation report due later today.
The mood remains fragile after a six-day selloff in semiconductor stocks and a recent surge in bond yields, though chipmaker losses slowed overnight.
UK gilt yields eased around five basis points after a Financial Times report suggested Chancellor John Healey plans to stick to the fiscal rules in this month's Budget.
Oil prices remain elevated, with Brent crude trading above $106 a barrel despite OPEC reporting a near one million barrel-per-day rise in September production.
The main focus for investors today is the US consumer price index, due at 1.30pm UK time, with consensus forecasting headline inflation to accelerate to 3.6% annually in September.
A softer core reading could give the Federal Reserve reason to delay its next interest rate rise until December.
Flat start
The FTSE 100 made a underwhelming start to proceedings as it edged 5 points higher in the first hour of trading.
Rio Tinto provided the major blue-chip news of the day as it issued a production update.
Panmure Liberum called the Q3 report 'solid operationally', but said the focus was on cost inflation at its Pilbara operations in Australia.
Solid start predicted
The FTSE 100 looks set to open 32 points higher on Wednesday, taking its cue from a recovery in Asian semiconductor shares after the previous session's sharp sell-off.
Markets across Asia edged higher, with South Korean chipmakers Samsung Electronics and SK Hynix each gaining more than 2%, while Japan's Nikkei added 0.2% and the Kospi in Seoul climbed 1.8%.
Gains were capped, however, by elevated oil prices following Houthi missile and drone attacks on Saudi Arabia, with US crude rising 0.8% to $94.96 per barrel and Brent crude climbing to $106.60.
The main focus for investors later today will be US consumer price index figures, with economists expecting annual headline inflation to have accelerated to 3.6% in September.
Markets are currently pricing in a greater than 20% chance of a Federal Reserve rate rise in October.
