London midday: Stocks nudge up as pound drops on retail sales data

Michele Maatouk Sharecast | 17 Feb, 2017 12:06 - Updated: 12:06 | | |

London Stock Exchange AIM LSE shares

London stocks nudged higher, while the pound lost ground against the dollar after data showed UK retail sales fell again in January.

At midday, the FTSE 100 was up 0.2%. to 7,293.90. Meanwhile, the pound was down 0.6% to $1.2412, having traded at $1.2449 just ahead of the sales data.

Figures from the Office for National Statistics showed retail sales unexpectedly fell last month, a sign that consumers are beginning to feel the squeeze amid a rise in inflation.

Sales were down 0.3% on the month, missing economists’ expectations of a 0.9% increase and following a downward-revised 2.1% drop in December.

In the three months to January, sales were down 0.4% compared to the previous quarter, marking the first fall since December 2013.

On the year, retail sales rose 1.5%, undershooting expectations for a 3.4% jump. Meanwhile, sales excluding auto fuel declined 0.2% on the month and 2.6% on the year.

The report also showed that average store prices including fuel rose 1.9% compared with January 2016, which is the largest year-on-year price increase since July 2013.

ONS senior statistician Kate Davies said: “In the three months to January, retail sales saw the first signs of a fall in the underlying trend since December 2013. We have seen falls in month-on-month seasonally adjusted retail sales, both in conventional stores and online, and the evidence suggests that increased prices in fuel and food are significant factors in this slowdown."

Earlier this week, data revealed that wages in the UK were not improving, even as inflation hit its highest level since mid-2014.

Joshua Mahony at IG said: “UK retail sales failed to live up to expectations this morning, with the reading posting its second consecutive negative reading for the first time since early 2016. Probably the biggest warning sign was the December revision, which showed that in declining 2.1%, that month saw the second biggest fall in retail sales for 20 years. With a weaker pound, the idea was that people would spend more, yet recent months have instead shown that falling consumer confidence could be having a material impact upon spending.”

Investors in London were also continuing to mull over comments by US President Donald Trump at a press conference on Thursday, when he said that tax reform proposals would come only after a push to replace Obamacare in March. He also claimed he had inherited a “mess” from former President Barack Obama.

In corporate news, AstraZeneca pushed higher after the pharmaceuticals giant reported positive results from its Phase III OLYMPIAD trial of its breast cancer treatment Lynparza (olaparib).

Millennium & Copthorne Hotels gained ground after it reported a dip in 2016 pre-tax profit but said group revenue per available room rose 6.6% to £76.71.

Segro rallied after its full-year earnings per share and net asset value came in ahead of analysts’ expectations.

Paper and packaging company Mondi got a boost as JPMorgan Cazenove upgraded its stance on the stock to ‘overweight’ from ‘neutral’.

On the downside, Essentra slid after the plastic and fibre products manufacturer issued a profit warning for 2017.

Hansteen nudged lower as it announced it has made an offer for Industrial Multi Property Trust, valuing the group at £25.2m.

Satellite communications provider Inmarsat slumped as UBS downgraded the stock to ‘sell’ from ‘neutral’.

Market Movers

FTSE 100 (UKX) 7,293.90 0.22%
FTSE 250 (MCX) 18,705.80 0.00%
techMARK (TASX) 3,358.64 0.66%

FTSE 100 - Risers

Unilever (ULVR) 3,456.50p 3.26%
AstraZeneca (AZN) 4,638.00p 2.51%
Fresnillo (FRES) 1,539.00p 2.33%
Coca-Cola HBC AG (CDI) (CCH) 1,952.00p 2.09%
Compass Group (CPG) 1,475.00p 1.86%
Shire Plc (SHP) 4,844.50p 1.71%
Imperial Brands (IMB) 3,726.50p 1.68%
Reckitt Benckiser Group (RB.) 7,002.00p 1.46%
Randgold Resources Ltd. (RRS) 7,445.00p 1.36%
Mondi (MNDI) 1,864.00p 1.30%

FTSE 100 - Fallers

Standard Chartered (STAN) 785.90p -2.76%
Royal Bank of Scotland Group (RBS) 239.30p -1.72%
Antofagasta (ANTO) 834.00p -1.71%
Anglo American (AAL) 1,347.50p -1.61%
BHP Billiton (BLT) 1,393.50p -1.45%
Rio Tinto (RIO) 3,600.00p -1.29%
Barclays (BARC) 235.25p -1.16%
Worldpay Group (WPG) 266.90p -1.15%
Rolls-Royce Holdings (RR.) 687.00p -0.94%
Prudential (PRU) 1,615.00p -0.89%

FTSE 250 - Risers

SEGRO (SGRO) 504.00p 4.35%
Indivior (INDV) 379.40p 3.55%
Essentra (ESNT) 433.50p 2.85%
Ultra Electronics Holdings (ULE) 1,953.00p 2.52%
CLS Holdings (CLI) 1,645.00p 1.92%
Dunelm Group (DNLM) 632.50p 1.69%
Hochschild Mining (HOC) 278.00p 1.35%
Bankers Inv Trust (BNKR) 751.00p 1.21%
LondonMetric Property (LMP) 150.90p 1.21%
Daejan Holdings (DJAN) 6,600.00p 1.15%

FTSE 250 - Fallers

Inmarsat (ISAT) 617.50p -5.07%
Drax Group (DRX) 348.10p -3.04%
Cobham (COB) 111.50p -2.79%
Lancashire Holdings Limited (LRE) 721.50p -2.50%
IP Group (IPO) 164.70p -2.31%
Mitchells & Butlers (MAB) 246.90p -1.98%
Riverstone Energy Limited (RSE) 1,244.00p -1.97%
Hunting (HTG) 569.50p -1.89%
Vedanta Resources (VED) 1,048.00p -1.87%
Clarkson (CKN) 2,522.00p -1.87%

More news

21:46 US close: Stocks end up on earnings, Nasdaq breaches 6,000 for first time

US stocks ended in the black on Tuesday thanks to some well-received corporate news and as investors awaited a big tax reform announcement from President Donald Trump, with the tech-heavy Nasdaq breaching the 6,000 level for the first time.

19:19 Bonds: Euro area yields bounce back on ECB speculation

These were the movements in some of the most widely-followed 10-year sovereign bond yields: US: 2.31% (+4bp)UK:1.09% (+3bp)Germany: 0.38% (+5bp)Spain: 1.68% (+7bp)France: 0.90% (+7bp)Italy: 2.27% (+9bp)Portugal: 3.61% (+5bp)Greece: 6.44% (-1bp)Japan: 0.03% (+0bp)

18:34 FX round-up: Sterling holds up well as attentions turn from Macron to ECB, US tax reforms

Sterling held up relatively well on Tuesday -- up on the dollar but down on the euro -- as the market looks to the European Central Bank's rate decision later in the week, US tax reforms tomorrow and a stack of other economic data due on both sides of the Atlantic.

18:29 Europe close: Stocks consolidate gains even as single currency jumps

European stocks made slight gains as markets consolidated the previous session's sharp rise on the heel of the results of the French presidential election, with the euro continuing to advance of the European Central Bank's next policy meeting.

17:37 US open: Nasdaq hits 6,000 mark for the first time ever

The Nasdaq hit the 6,000 mark for the first time on Tuesday on the back of recent better-than expected corporate earnings and the so called ‘Trump rally’.

17:31 Sector movers: Engineers pace gains

Engineers registered the biggest gains on Tuesday on the back of supportive comments from analysts at two top brokers.

17:20 Wednesday preview: Trump's tax reveal follows GSK, StanChart starter

Wednesday will see a fairly busy day for corporate quarterly results, including GlaxoSmithKline and Standard Chartered, plus is the day when Donald Trump announced he will unveil his 'big tax reform'.

16:35 Commodities: Crude futures tend lower ahead of much-watched API data

Crude-oil futures were tending lower ahead of industry stores data from American Petroleum Institute later on Tuesday.

15:01 FTSE 250 movers: Elementis rallies on trading statement; Vectura hit by downgrade

London's FTSE 250 was up 0.1% to 19,628.75 in afternoon trade, with broker notes providing much of the action.

15:36 Telford Homes to buy Stone Studios in Hackney Wick

AIM-listed residential property developer Telford Homes has exchanged contracts for the purchase of Stone Studios, a residential-led mixed-use development site on Wallis Road, Hackney Wick, E9.