London close: Stocks finish choppy day in the red

London stocks ended in negative territory on Wednesday, influenced by a downturn in retail sales data for June.

The FTSE 100 index dropped 0.27%, closing at 8,225.33 points, while the FTSE 250 saw a decline of 0.32%, ending the day at 20,298.10 points.

In currency markets, sterling was last down 0.48% on the dollar, trading at $1.2625, as it slipped 0.19% against the euro, changing hands at €1.1817.

“Tech stocks continue to cling on to small gains this afternoon but the broader tone is firmly negative,” said IG chief market analyst Chris Beauchamp.

“Monday’s session had shown the signs of rotation that so many investors had been hoping for, transferring leadership from unstoppable tech names to unloved sectors, but this has fizzled out rapidly.

“Higher inflation in Australia has not helped matters, and raises the uncomfortable prospect that the major bugbear of the past two years is set to make an unwelcome return, leading to rate hikes featuring in central bank policy once again.”

Beauchamp said all eyes were now firmly on Friday's PCE data in the US, at least until Sunday's French elections.

“Faced with resurgent inflation in Australia, investors have slammed the ‘buy’ button on the dollar this afternoon, which in its turn has sent gold down to a two-week low.

“Like stocks there had been hope of a sustained turn higher, but a test of the recent lows around $2,280 seems likely.”

Retail sales see notable downturn in June

In economic news, retail sales in the UK experienced a notable decline in June, reversing the temporary uplift observed in May, according to the latest CBI distributive trades survey.

The survey revealed that retail sales volumes fell sharply, with a weighted net balance of -24, a significant drop from May's balance of 8.

It highlighted that sales were well below the average for the time of year, and were expected to continue their decline in July, albeit at a slower rate, with a forecast balance of -9.

Despite the current downturn, the CBI pointed out improving consumer fundamentals, citing a decrease in headline consumer price index inflation to 2% - the Bank of England's target - and rising incomes.

Additionally, the Bank of England was anticipated to begin reducing interest rates soon, potentially boosting consumer confidence.

“Last month’s nascent recovery in sales proved to be short-lived, with retailers reporting a faster-than-anticipated decline this month,” said Alpesh Paleja, interim deputy chief economist at the Confederation of British Industry.

“Unseasonably cold weather in [early] June may have played a role, but it’s notable that internet retail sales fell sharply too.”

In Germany, consumer sentiment took an unexpected downturn, declining for the first time in five months.

GfK's forward-looking consumer confidence survey for July dropped to -21.8 from a revised -21.0 in June, contrary to economists' predictions of an improvement to -18.9.

The survey indicated an increase in consumers' willingness to save, which rose by 3.2 points to 8.2, while the willingness to buy fell by 0.7 points to -13, largely due to rising prices.

The future outlook also appeared bleak, with the income expectations sub-index decreasing by 4.3 points to 8.2 and economic prospects plunging by 7.3 points to 2.5.

Future rockets on price target hike, Phoenix Group in the red

On London’s equity markets, AO World saw a modest rise of 1.06% after the online electricals retailer reported a substantial increase in full-year profits, which surged 186% to £34.4m despite a 9% decline in revenue to £1.04bn.

That exceeded the company’s own profit guidance range, reflecting successful strategic shifts towards profit and cash generation.

Publisher Future surged 8.28% after receiving a double upgrade to ‘buy’ from Jefferies, which also raised its price target to 1,280p from 635p.

Deliveroo increased 1.18%, following a report that US meal delivery company Doordash showed interest in a takeover last month.

Talks reportedly ended due to a disagreement on valuation, with no ongoing discussions at present.

Anglo American managed a slight gain of 0.3% despite another decline in rough diamond sales from its De Beers unit.

De Beers recorded its fifth sales cycle generating $315 million, down from previous cycles and last year's figures.

Alliance Trust and Witan Investment Trust rose 0.5% and 2.49%, respectively, after announcing a merger to create a major new £5bn investment vehicle, Alliance Witan.

The new entity was expected to qualify for FTSE 100 inclusion, offering a more liquid and cost-efficient investment option.

On the downside, Phoenix Group Holdings fell 1.52% after the insurance and pensions group announced its intention to sell its SunLife business, deeming it non-core to its operations.

Although there had been significant interest, the sale's completion remains uncertain.

Liontrust Asset Management slumped 3.78%, revealing a small loss for the year ended 31 March.

The company faced net outflows of over £6bn due to an adverse trading environment.

Legal & General Group was down 0.7% after its investment management division LGIM decided to divest from commodities miner and trader Glencore due to its thermal coal operations.

The decision was part of L&G's latest climate impact pledge report, affecting various ESG and pension funds.

Glencore, despite the divestment news, saw a slight uptick of 0.11%.

Elsewhere, Haleon slipped 0.27% after agreeing to sell its nicotine replacement therapy business outside the US to Dr Reddy's Laboratories for £500m.

The sale would include well-known brands like Nicotinell, Nicabate, Habitrol, and Thrive, available across over 30 markets.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,225.33 -0.27%
FTSE 250 (MCX) 20,298.10 -0.32%
techMARK (TASX) 4,754.74 -0.53%

FTSE 100 - Risers

Centrica (CNA) 137.90p 1.43%
Marks & Spencer Group (MKS) 291.70p 1.39%
Convatec Group (CTEC) 234.60p 1.38%
Fresnillo (FRES) 566.50p 1.25%
Scottish Mortgage Inv Trust (SMT) 888.40p 1.21%
Kingfisher (KGF) 247.00p 1.15%
Associated British Foods (ABF) 2,524.00p 1.04%
Diploma (DPLM) 4,140.00p 1.02%
Sage Group (SGE) 1,091.50p 1.02%
Croda International (CRDA) 4,061.00p 0.84%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 163.85p -2.59%
Flutter Entertainment (DI) (FLTR) 14,440.00p -2.43%
Smurfit Kappa Group (CDI) (SKG) 3,538.00p -2.16%
easyJet (EZJ) 454.60p -1.94%
Land Securities Group (LAND) 613.50p -1.92%
Entain (ENT) 648.40p -1.82%
Phoenix Group Holdings (PHNX) 517.50p -1.71%
Frasers Group (FRAS) 885.00p -1.39%
Imperial Brands (IMB) 2,029.00p -1.27%
Taylor Wimpey (TW.) 142.00p -1.18%

FTSE 250 - Risers

Future (FUTR) 1,086.00p 8.28%
Carnival (CCL) 1,312.50p 4.92%
Indivior (INDV) 1,312.00p 4.04%
Apax Global Alpha Limited (APAX) 158.60p 3.26%
Rotork (ROR) 334.80p 2.83%
Britvic (BVIC) 1,192.00p 2.76%
Witan Inv Trust (WTAN) 267.50p 2.49%
Centamin (DI) (CEY) 120.20p 2.47%
Bakkavor Group (BAKK) 146.00p 2.46%
CMC Markets (CMCX) 321.50p 2.39%

FTSE 250 - Fallers

Pagegroup (PAGE) 429.00p -5.09%
Trustpilot Group (TRST) 219.00p -4.78%
Alpha Group International (ALPH) 2,280.00p -3.80%
Hays (HAS) 95.10p -3.65%
Helios Towers (HTWS) 117.80p -3.44%
Kier Group (KIE) 133.20p -2.77%
Ocado Group (OCDO) 282.40p -2.75%
SSP Group (SSPG) 150.80p -2.65%
Just Group (JUST) 103.60p -2.63%
Aston Martin Lagonda Global Holdings (AML) 150.80p -2.58%