London close: FTSE gains as retailers rise despite disappointing data

London stocks ended in the black on Friday, with retailers on the rise despite disappointing retail sales and consumer confidence data.

The FTSE 100 was up 0.3% at 7,770.59.

Figures out earlier from the Office for National Statistics showed that retail sales continued to fall in December, as hard-pressed shoppers cut back on spending.

Sales volumes were estimated to have fallen 1% last month, compounding a 0.5% slide in November, revised downwards from an initial estimate of -0.4%. Analysts had been expecting a 0.5% improvement in sales in December.

Year-on-year, sales fell 5.8%. They were also 1.7% below February 2020, before the pandemic.

The ONS said consumers had cut back on spending because of "increased prices and affordability concerns", while the annual rate was affected by the removal of pandemic restrictions, which led to a return to eating out. Food retailers also suggested customers had stocked up early for Christmas.

Elsewhere, the latest survey from GfK showed that consumer confidence faltered in January, as concerns about the strength of the economy weighed heavily.

The January GfK consumer confidence index fell three points to -45, ending December’s weak rally, when the index nudged up two points to -42.

Within that, expectations for the general economic situation over the next 12 months dipped one point to -54, although the outlook for the personal financial situation moved up two points to -27.

Both the major purchase and savings indices fell six points, however, to -40 and 14 respectively.

Joe Staton, client strategy director at GfK, said: "Consumers have a New Year hangover of the economic kind, with high levels of pessimism over the state of the wider economy. And unlike a conventional hangover, this one won’t vanish quickly.

"The only glimmer of hope is the slight uptick in the outlook for [the] personal financial situation, but this is of little comfort as it is still 25 points lower than this time last year.

"With inflation continuing to swallow up pay rises and the prospect of some shocking energy bills landing soon, the forecast for consumer confidence this year is not looking good."

In equity markets, retailers were among the top performers despite the weaker retail sales data, with JD Sports, Burberry and Frasers Group all up.

Power generator SSE rallied after it upgraded annual earnings expectations as higher gas prices and better storage offset lower-than-expected renewables output.

4imprint racked up strong gains as it said pre-tax profit for 2022 is expected to be above the upper end of the range of analysts' forecasts, and not less than $100m, following a particularly strong finish to the year.

Asos surged after an upgrade to ‘buy’ at Bank of America Merrill Lynch.

Shares in telecoms testing company Spirent Communications slumped as it said it expected earnings to be weighted towards the second half as customers delayed investment decisions.

Close Brothers also slid after the merchant bank said it will be setting aside a further £90m against bad loans from Novitas and that Winterflood Securities continues to be hit by the market-wide slowdown in trading activity in higher-margin sectors.

Hargreaves Lansdown was knocked lower by a downgrade to ‘underperform’ at Jefferies.

Market Movers

FTSE 100 (UKX) 7,770.59 0.30%
FTSE 250 (MCX) 19,713.48 0.71%
techMARK (TASX) 4,456.44 -0.28%

FTSE 100 - Risers

JD Sports Fashion (JD.) 157.30p 2.98%
3i Group (III) 1,457.00p 2.93%
Frasers Group (FRAS) 765.00p 2.89%
SSE (SSE) 1,750.50p 2.85%
Airtel Africa (AAF) 115.40p 2.67%
Flutter Entertainment (CDI) (FLTR) 12,565.00p 2.45%
Burberry Group (BRBY) 2,358.00p 2.39%
Rightmove (RMV) 572.80p 2.32%
Auto Trader Group (AUTO) 584.80p 2.13%
Glencore (GLEN) 575.90p 2.09%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 864.20p -2.61%
Pearson (PSON) 921.80p -2.17%
AstraZeneca (AZN) 11,200.00p -1.93%
Melrose Industries (MRO) 143.20p -1.75%
SEGRO (SGRO) 811.00p -1.15%
Scottish Mortgage Inv Trust (SMT) 733.40p -1.05%
Admiral Group (ADM) 2,096.00p -0.95%
Experian (EXPN) 2,936.00p -0.88%
GSK (GSK) 1,406.80p -0.83%
Relx plc (REL) 2,360.00p -0.72%

FTSE 250 - Risers

ASOS (ASC) 778.00p 11.14%
Carnival (CCL) 757.40p 5.05%
Baltic Classifieds Group (BCG) 144.80p 4.93%
Moonpig Group (MOON) 116.50p 4.86%
Wetherspoon (J.D.) (JDW) 481.80p 4.51%
Darktrace (DARK) 243.50p 3.48%
Coats Group (COA) 69.30p 3.43%
International Distributions Services (IDS) 221.30p 3.41%
National Express Group (NEX) 137.50p 3.31%
ITV (ITV) 79.06p 3.27%

FTSE 250 - Fallers

Spirent Communications (SPT) 225.60p -18.67%
Close Brothers Group (CBG) 937.50p -10.54%
Network International Holdings (NETW) 271.60p -4.23%
Dr. Martens (DOCS) 139.60p -3.66%
Howden Joinery Group (HWDN) 652.80p -3.40%
PureTech Health (PRTC) 261.00p -2.79%
Dechra Pharmaceuticals (DPH) 2,714.00p -2.72%
Great Portland Estates (GPE) 539.50p -1.64%
Workspace Group (WKP) 496.40p -1.41%
Tritax Big Box Reit (BBOX) 148.70p -1.39%