Oliver Haill Sharecast | 21 Apr, 2017 18:07 - Updated: 19:07 | | |
London stocks finished the week on a weaker footing, with the FTSE 100 dropping for a sixth consecutive day even as the pound slipped on the release of disappointing UK retail sales figures.
The benchmark index was just below the waterline, dropping four points to close at 7,114.55 on Friday and down more than 3% in the week and almost 4.5% from March's all-time high. The FTSE 250 lost 20 points on the day or 0.11% to close just above 19,358, having swept up to its own all-time high either side of the Easter break.
Friday saw the pound weaken 0.1% against the dollar to slide back below 1.28 after two days above that mark this week. Sterling maintained its footing versus the euro at 1.196, flirting with the 1.2 level than has been playing hard to get since June.
The big data release of the week was a damp squib, with UK retail sales falling in March to record their first quarterly decline since 2013 as the plunging pound sent shop prices soaring.
Economists said it suggested the consumer spending slowdown is gathering pace and that the Bank of England may not raise interest rates for some time.
The Office for National Statistics revealed retail sales dropped 1.8% month-on-month in March, worse than the 1.4% the previous month and much worse than the 0.5% fall the market expected.
While March sales rose 1.7% on the same month last year, it was well short of the 3.7% year-on-year rise in February and the 3.3% consensus forecast, highlighting that we are seeing a consistent weakness in spending.
A cause of the slowdown is that the effects of sterling’s Brexit-related slump has lifted the retail sales deflator to 3.3%, its equal-highest since 2012.
Retailer stocks listed in London seem to have avoided the worst, however.
With a police shooting overnight in Paris, just days ahead of the French election on Sunday, IG analyst Chris Beauchamp said traders had multiple issues on their mind.
“The first round of the French elections is the main reason for hesitant performance across markets, while a nasty miss for US PMIs this afternoon is also making life unpleasant for those who got caught up in yesterday’s euphoric rally."
Looking ahead to next week, he said a busier schedule of central bank meetings and big earnings announcements should lead to higher volatility.
"The rally yesterday shows that it is still unwise to assume that the post-election surge is over, especially in a month that is historically strong for markets, but so far earnings season has not provided the spark to reignite bullish sentiment."
In corporate news, the top riser on the Footsie was engineer Babcock as sector peer WS Atkins became yet another engineer to be snapped up in recent industry consolidation. Atkins rallied after agreeing late on Thursday to be taken over by Canada's SNC-Lavalin for £2.1bn.
Primark owner Associated British Foods continued to gain after strong results earlier in the week, with further brokers updating their forecasts, including Numis, which also upped its price target to 2,923p from a previous 2,860p.
Pure-bred retailer Marks & Spencer got a boost as Barclays initiated coverage of the stock at ‘overweight' with a 410p price target implying 14% potential upside. Though like the rest of the sector it faces some significant headwinds, M&S Food is seen to have a good track record and an increasing focus of the group, with plenty of opportunity to add more stores.
Aviva pushed higher after buying VietinBank's entire 50% shareholding in its life insurance joint venture and signing a new distribution agreement to sell life and health insurance products through its network of more than 1,100 branches.
Equipment rental firm Ashtead clawed back some ground, having fallen sharply in the previous session after results from US peer United Rentals showed rental rates were under pressure in the first quarter.
Anglo American was the biggest faller, ahead of its results on Monday.
Consumer products group Reckitt Benckiser declined after it reported flat sales for the first quarter.
Property developer Hammerson ticked lower as it secured a £360m loan at an initial margin of 90 basis points from a syndicate of fourteen banks in a bid to reduce its debt.
Restaurant Group was under pressure after its finance chief left following less than a year at the company.
Sports Direct edged up after receiving approval to go ahead with the $101m acquisition of Bob’s Stores and Eastern Mountain Sports in the US.
FTSE 100 - Risers
Babcock International Group (BAB) 903.00p 2.61%
Associated British Foods (ABF) 2,814.00p 1.96%
Marks & Spencer Group (MKS) 360.50p 1.92%
Convatec Group (CTEC) 295.40p 1.72%
CRH (CRH) 2,709.00p 1.23%
SSE (SSE) 1,445.00p 1.19%
National Grid (NG.) 1,002.00p 1.18%
DCC (DCC) 7,145.00p 1.13%
Bunzl (BNZL) 2,336.00p 1.13%
Shire Plc (SHP) 4,497.50p 1.10%
FTSE 100 - Fallers
Anglo American (AAL) 1,117.50p -1.67%
Johnson Matthey (JMAT) 2,856.00p -1.55%
Rentokil Initial (RTO) 239.20p -1.32%
Hikma Pharmaceuticals (HIK) 1,821.00p -1.30%
Fresnillo (FRES) 1,498.00p -1.25%
Micro Focus International (MCRO) 2,467.00p -1.24%
BP (BP.) 441.40p -1.18%
Land Securities Group (LAND) 1,100.00p -1.08%
Taylor Wimpey (TW.) 200.10p -1.04%
BHP Billiton (BLT) 1,191.50p -0.96%
FTSE 250 - Risers
Atkins (WS) (ATK) 2,102.00p 6.05%
TalkTalk Telecom Group (TALK) 197.80p 4.66%
Elementis (ELM) 290.10p 2.40%
Hastings Group Holdings (HSTG) 287.20p 2.17%
BTG (BTG) 641.50p 1.82%
Millennium & Copthorne Hotels (MLC) 457.20p 1.80%
Aldermore Group (ALD) 234.80p 1.69%
BGEO Group (BGEO) 3,506.00p 1.65%
Fisher (James) & Sons (FSJ) 1,626.00p 1.61%
Lancashire Holdings Limited (LRE) 701.00p 1.52%
FTSE 250 - Fallers
Essentra (ESNT) 512.00p -3.85%
Cairn Energy (CNE) 194.70p -3.18%
Kaz Minerals (KAZ) 448.60p -2.98%
Sanne Group (SNN) 669.50p -2.83%
Vedanta Resources (VED) 690.00p -2.54%
Restaurant Group (RTN) 356.40p -2.46%
IP Group (IPO) 136.50p -2.29%
Sports Direct International (SPD) 308.00p -2.22%
Nostrum Oil & Gas (NOG) 459.00p -2.13%
Go-Ahead Group (GOG) 1,748.00p -1.91%
The UK economy's performance will continue to exceed forecasts but multiple headwinds will just about brake any further gains in the FTSE 100 in 2017, analysts at one of the City's top research shops said.
The number of oil rigs in operation in the US continued to climb last week, increasing by 11 to 758, according to the results of the most widely-followed survey tracking them.
Sterling managed Friday gains on the US dollar thanks to UK monetary policy hawks coming to the fore in recent days, but was otherwise down against a raft of commodity currencies.
Stocks came off their worst levels of the day as crude oil futures perked up and trading on Wall Street got off to a positive start.
Stocks in London laboured through Friday as sterling made gains against an underwhelming US dollar a day after PM Theresa May met with European leaders in Brussels.
Gains for steel and biotech shares saw Wall Street edge higher amid better than expected economic data and some dovish Fedspeak.
Private sector firms in the US continued to record a solid rate of expansion amid signs that economic growth might pick up again, the results of a widely-followed survey showed.
Activity in America's residential real estate market continued to hum along at a solid pace last month, the latest official revealed, amid sharp price increases.
Hayward Tyler updated the market on its discussions with Avingtrans on Friday, regarding the possible offer by Avingtrans for the company as announced on 31 March.
BMR Group announced on Friday that Peterhouse Corporate Finance had raised £0.35m - before expenses - by way of a placing of 9,333,333 new ordinary shares of 1p each in the capital of the company, at 3.75p per share.