Trading in London was lukewarm at Friday’s market open, despite a strong UK retail sales print and Wednesday’s consumer price inflation read otherwise boosting stocks across the week so far.
The FTSE 100 index opened down 1.8 points at 7,644.25. The FTSE 250 was down 54.85 points, 0.3% at 19,256.88, and the AIM All-Share was up 1.03 points, 0.1%, at 765.32.
The Cboe UK 100 was down 0.1% at 762.55, the Cboe UK 250 was down 0.1% at 16,920.96, and the Cboe Small Companies was down 0.1% at 13,682.26.
In European equities, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was down 0.4%.
Market focus for the morning was on better-than-expected UK retail sales figures for last month.
The Office for National Statistics said retail sales fell 1.0% annually in June, compared to a revised 2.3% decline in May. The market had been expecting a 1.5% fall, according to FXStreet-cited consensus.
From the previous month, sales rose 0.7% in June, picking up speed from a downwardly revised 0.1% rise in May. June’s reading topped market consensus, which had forecast a 0.2% rise.
It paints something of a mixed picture of the retail climate in the UK, with GfK’s survey data on Friday also pointing to a sudden decline in consumer confidence in June, amid relentless inflation and rising interest rates.
GfK’s Consumer Confidence Index plunged six points in July to minus 30, with concerns for personal finances and the wider UK economy over the coming year down six and eight points respectively. However, the forecast for personal finances over the next 12 months is still 19 points higher than this time last year, while expectations for the general economy remain 24 points better than last July.
Despite the mixed data, it has been a positive week for London-listed companies, with the cooler-than-expected UK inflation print providing a much-needed boost.
The domestically-focused FTSE 250 is on track to close the week 3.7% higher. The FTSE 100 is 2.9% higher over the week.
Sterling was quoted at $1.2891 early Friday, higher than $1.2851 at the London equities close on Thursday. The euro traded at $1.1141, lower than $1.1144.
Mining stocks returned some of Thursday’s gains.
Glencore fell 0.9%, as it reiterated annual production guidance after updating on the first half of the year. Its key copper, coal and zinc assets performed in line with expectations and guidance over the period, the miner said. Meanwhile, it tweaked second half volume weightings in copper, zinc and nickel, to reflect higher expected production volumes from Collahuasi, Kazzinc, Mount Isa and INO.
It still expects annual adjusted earnings before interest and tax above the top end of its $2.2 to $3.2 billion per annum long-term guidance range, ‘likely in the $3.5-4.0 billion range’, according to CEO Gary Nagle.
In the midcaps, Babcock rose 3.2%, adding to its double-digit gains after Thursday’s annual results.
Transport firm FirstGroup rose 2.0%, as it confirmed trading was in line with the expectations given back in June.
Meanwhile, among London’s small-caps, THG rose 1.2%.
The e-commerce firm, which trades as The Hut Group, confirmed the sale of two loss-making businesses for a total of about £4 million, as part of a company simplification exercise that the company announced back in January.
THG said it sold the trade and assets of the THG OnDemand division to its management, funded by Boston, Massachusetts-based investment firm Gordon Brothers. In the second quarter of this year, it had sold cycling equipment provider ProBikeKit to high-street retailer Frasers Group.
THG on Friday said the financial impact of the two disposals already is incorporated into previous guidance.
In Asia on Friday, the Nikkei 225 index in Tokyo closed down 0.6%.
Japan’s consumer prices rose 3.3% year-on-year in June, with the pace of inflation accelerating from the 3.2% recorded in May, government data showed Friday. The latest data – which matched market expectations – comes ahead of the Bank of Japan’s monetary policy meeting next week.
Most market watchers expect the central bank to keep its super-loose monetary easing policy in place. The Bank of Japan’s 2% inflation target, which it hopes will lead to sustainable growth in the world’s third-largest economy, has been surpassed every month for more than a year.
But the central bank sees recent price rises as driven by temporary factors, and so has stuck to its easing policies such as a negative interest rate.
Against the yen, the dollar was quoted at JP¥140.32, flat versus JP¥140.31.
In China, the Shanghai Composite closed down 0.1%, while the Hang Seng index in Hong Kong was up 0.7%. The S&P/ASX 200 in Sydney closed down 0.2%.
In the US on Thursday, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.5%, the S&P 500 down 0.7% and the Nasdaq Composite down 2.1%.
Tech stocks such as Netflix and Tesla came under selling pressure as second-quarter results underwhelmed. Semiconductor stocks were also in the red after a gloomy outlook from TSMC, pulling Nvidia down 3.3% and Intel down 3.2%.
Among those reporting on a busy US corporate calendar on Tuesday, there will be results from Google-parent Alphabet, Texas Instruments, Visa and 3M.
Gold was quoted at $1,971.00 an ounce early Friday, edging up from $1,969.54 on Thursday. Brent oil was trading at $80.35 a barrel, higher than $79.33.
Meanwhile, on the UK political front, Prime Minister Rishi Sunak has suffered a double by-election defeat in safe Tory seats, with Labour and the Liberal Democrats both overturning majorities of about 20,000. Labour won Selby and Ainsty and the Lib Dems took Somerton and Frome on sizable swings which will leave many Tory MPs looking nervously at their own majorities.
But the Tory leader was spared the prospect of being the first prime minister since 1968 to lose three by-elections on the same day as Labour failed to secure victory in Boris Johnson’s former seat of Uxbridge and South Ruislip.
Looking ahead to next week, there is a packed UK and global corporate calendar. There are also central bank decisions from the US on Wednesday, the EU on Thursday, and Japan on Friday.
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