How rapidly rising inflation is impacting FTSE stocks?

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How rapidly rising inflation is impacting FTSE stocks?

 How rapidly rising inflation is impacting FTSE stocks?
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Highlights

  • The UK’s inflation rate has recently risen to its highest level since 1992.
  • To counter the effect of inflation, the Bank of England is going for an interest rate hike, which negatively impacts some stocks more than others.

The UK inflation levels have been soaring and the inflation rate has recently risen to its highest level since 1992. Both households and businesses have been suffering due to the evils of inflation. Due to surging inflation levels, other factors such as the booming labour market, soaring energy costs, supply chain constraints, the UK market has been heavily impacted.

However, it is not necessary that inflation always has a negative impact on all sectors of the economy. Rising inflation levels may help certain industries and hurt others, depending on their resilience to soaring prices. To counter the effect of inflation, the Bank of England is going for an interest rate hike in the coming months.

This is bound to have an impact on the stock market. But some stocks which are inflation-proof may do well as compared to others. These include energy, equity REITs, consumer staples, industrial, and banking stocks.

On the other hand, consumer discretionary, industrials, materials, and tech stocks may show a slump with a rate hike.

Let’s first take a look at 2 inflation-resilient UK stocks that you can buy right now.

RELATED READ: Why banking stocks are good options amid rising interest rates?

Segro PLC (LON: SGRO)

FTSE100-listed Segro PLC is a leading UK-based REIT. The company has performed very well in 2021 due to the booming demand for industrial warehouse properties, and this trend is expected to continue this year as well. The market cap of the firm stands at £15,595.83 million and it has provided a return of 33.19% to its shareholders in the last one year as of 24 January 2022. Segro PLC’s shares were trading at GBX 1,297.50, up by 0.04%, at 8:13 AM (GMT) on 24 January 2022.

Royal Dutch Shell Plc (LON: RDSA)

Royal Dutch Shell Plc, which has recently changed its name to Shell plc, is a globally leading oil and gas business. The energy giant has performed well amid rising energy prices. The market cap of the FTSE100-listed company stands at £74,125.80 million and it has provided a return of 27.52% to its shareholders in the last one year as of 24 January 2022. Royal Dutch Shell Plc’s shares were trading at GBX £1,810.60, up by 0.18%, at 8:21 AM (GMT) on 24 January 2022.

Now, let’s take a look at 2 UK stocks that have slumped due to rising inflation.

RELATED READ: Which stocks you can buy thinking about possible recovery later?

Rio Tinto plc (LON: RIO)

Anglo-Australian corporation Rio Tinto plc is the second-largest metals and mining enterprise across the globe after BHP. The market cap of the FTSE100-listed company stands at £68,111.04 million and it has provided a negative return of -8.87% to its shareholders in the last one year as of 24 January 2022. Rio Tinto Plc’s shares were trading at GBX £5,345.00, down by 1.87%, at 9:27 AM (GMT) on 24 January 2022.

Whitbread plc (LON: WTB)

UK-based Whitbread plc is a hotel and restaurant business which operates globally. A leader in the UK’s hospitality sector, the company owns Premier Inn, which is the largest hotel brand in the UK. The market cap of the FTSE100-listed company stands at £6,229.65 million and it has provided a negative return of -3.11% to its shareholders in the last one year as of 24 January 2022. Whitbread Plc’s shares were trading at GBX £3,025.00, down by 1.19%, at 9:31 AM (GMT) on 24 January 2022.

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