StockMarketWire.com - UK stocks drifted lower on Tuesday as rising oil prices stoke inflation fears and investors assess concerns about potential power shortages in China.

At 0821, the benchmark FTSE 100 index was down 14.07 points, or 0.2%, at 7,049.33 after Brent crude rose to just shy of $80 a barrel.

Engineering group Smiths rallied 3.9% to £14.17, having reported an 80% rise in continuing profit on higher margins, while confirming the sale of its medical division to ICU Medical for $2.4 billion.

Smiths declared a full-year dividend of 37.7p per share, up 8% year-on-year.

Plumbing group Ferguson gained 1.4% to £10.665 as it reported a 46% rise in annual profit underpinned by a recovery in North American demand.

Ferguson declared a final dividend of 166.5c per share, bringing the annual payout to 239.4c, up 15% year-on-year.

Online greeting card and gifts group Moonpig firmed 1.9% to 367.4p on upgrading its annual revenue guidance, citing resilient demand despite an easing of lockdowns.

Moonpig's revenue for the year through April was now expected at between £270 million and £285 million, the company said in a trading update for its annual general meeting.

Water utility Pennon dropped 3.1% to £11.43 after it said it expected to deliver first-half results in line with expectations as the pandemic drives greater demand for water.

On a more negative note, Pennon said a third-party utility had in late August damaged main supply pipes at Carland Cross in Cornwall. It was assessing the impact on its performance.

Merchant banking group Close Brothers slid 1.7% to £15.49 even as it hiked its dividend, having reported a rise in annual operating profit driven by higher income and lower impairment charges.

Close Brothers declared a final dividend of 42p per share, resulting in a full-year payout of 60p, up 50% year-on-year.

Defence contractor Chemring inched back less than 0.1% to 324.84p after it announced three contract wins in the countermeasures and energetics sector.

The contracts were worth $22 million, $12 million and £9 million, respectively, the company said.

Bus and train company Go-Ahead reversed 7.7% to 946p after its Southeastern rail franchise would be taken over by the UK government.

The company said it had acknowledged mistakes were made in calculating payments due to the government as part of a profit-sharing agreement.

Wind-farm investor Greencoat UK Wind shed 0.2% to 136.4p following news that it had agreed to acquire the 35 megawatt Andershaw wind farm in the UK from Norway's Statkraft for £121 million.

Andershaw, commissioned in 2017, was 2 miles south of Douglas in South Lanarkshire and comprised 11 Vestas V117 3.3MW turbines.

Hostel group Safestay added 3.6% to 22.8p, having swung to a first-half profit after proceeds from asset sales to shore up its balance sheet helped offset pressure on revenue from pandemic-led travel curbs.

Since reopening, Safestay had achieved occupancy from primarily domestic customers in July and August of 38% and 43%, respectively.

Subprime lender Non-Standard Finance rose 3.8% to 3.79p as booked a first-half loss after its revenue slumped by more than a quarter, though it said its performance was better than it had expected.

Non-Standard Finance added that it was continuing its discussions with Britain's Financial Conduct Authority regarding a redress programme for guarantor loans customers at an estimated cost of £16.9 million.

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