London midday: FTSE stays down as investors mull retail sales, services data

London stocks were still in the red by midday on Tuesday as investors mulled the latest retail sales and services data.

The FTSE 100 was down 0.7% at 7,461.19.

Russ Mould, investment director at AJ Bell, said: "The FTSE 100 slipped at the open after weakness on Wall Street last night. The markets are a touch nervous ahead of US jobs figures this week which could either reinforce or undermine the narrative that interest rates have peaked and rate cuts are on the way.

"Signs the labour market is heating up again would put any hopes of a Santa rally into the end of the year under threat."

On home shores, a survey out earlier showed the services sector returned to growth in November.

The S&P Global/CIPS purchasing managers’ index rose to 50.9 from 49.5 in October, coming in above the flash estimate of 50.5 and marking the highest reading since July.

A reading above 50.0 indicates expansion, while a reading below signals contraction.

Tim Moore, economics director at S&P Global Market Intelligence, said: "UK service providers moved back into expansion mode during November as stabilising demand conditions helped to lift business activity from its recent malaise.

"Despite tentative signs of a turnaround in new orders, survey respondents once again commented on a lack of willingness to spend among clients. Many firms noted that low levels of business and consumer confidence, alongside elevated borrowing costs, had constrained sales opportunities in November. Overseas markets continued to show resilience, with strengthening US demand often cited as a driver of increased new export orders."

Investors were also digesting the latest figures from KPMG and the British Retail Consortium. They showed that retail sales grew by an underwhelming amount in November despite shops stepping up their discounts leading up to Black Friday, as cautious consumers chose to delay their Christmas spending.

The BRC-KPMG retail sales monitor for November showed that total retail sales increased by 2.7% in November. This was above the three-month average growth rate of 2.6% but below the 12-month average of 4.1%. In November of 2022, sales were up 4.2% on the month before.

In the three months to November, food sales growth slowed to 7.6% from 7.9% a month earlier and under the 12-month average of 8.4%.

Meanwhile, non-food sales were down 1.6% in the three-month period, compared with an average of 0.5% over the past 12 months.

"Black Friday began earlier this year as many retailers tried to give sales a much-needed boost in November. While this had the desired effect initially, the momentum failed to hold throughout the month, as many households held back on Christmas spending," said Helen Dickinson, chief executive of the BRC.

"Retailers are banking on a last-minute flurry of festive frivolity in December and will continue working hard to deliver an affordable Christmas for customers so everyone can enjoy some Christmas cheer."

In equity markets, Barclays slumped after the Qatar Investment Authority, the bank’s second-largest shareholder, sold nearly half of its stake.

Prudential and HSBC were both down after Moody's cut its credit outlook on China to 'negative'.

Auction Technology was knocked lower by a downgrade to ‘equalweight’ from ‘overweight’ at Barclays.

Equipment hire specialist Ashtead was weaker as it delivered flat second-quarter profits, but said demand in the US remained "robust".

Outside the FTSE 350, Quiz shares tanked as the fashion retailer warned on full-year revenues after a disappointing Black Friday performance, and said it swung to a loss in the first half.

On the upside, DiscoverIE rallied after the industrial electronics group lifted its interim dividend and delivered a 7% increase in first-half underlying profits on the back of better-than-expected margins.

Land Securities was boosted by an upgrade to ‘buy’ at Goldman Sachs.

SSP gained as the food and beverage travel outlet operator reinstated its dividend and reported a near doubling of annual core profits, driven by the continued resurgence in passenger numbers and workers returning to work in offices.

Market Movers

FTSE 100 (UKX) 7,461.19 -0.69%
FTSE 250 (MCX) 18,410.94 0.27%
techMARK (TASX) 4,059.42 -0.30%

FTSE 100 - Risers

BT Group (BT.A) 129.40p 2.62%
United Utilities Group (UU.) 1,085.50p 1.16%
Airtel Africa (AAF) 110.70p 1.10%
Unite Group (UTG) 994.50p 1.07%
SEGRO (SGRO) 826.00p 1.05%
Land Securities Group (LAND) 633.80p 0.96%
Severn Trent (SVT) 2,612.00p 0.93%
Diploma (DPLM) 3,360.00p 0.60%
IMI (IMI) 1,571.00p 0.58%
Tesco (TSCO) 282.70p 0.53%

FTSE 100 - Fallers

Ashtead Group (AHT) 4,722.00p -4.02%
Entain (ENT) 775.00p -2.74%
Anglo American (AAL) 2,164.00p -2.72%
Centrica (CNA) 147.70p -2.48%
Barclays (BARC) 139.46p -2.46%
International Consolidated Airlines Group SA (CDI) (IAG) 154.85p -2.15%
Prudential (PRU) 846.40p -2.06%
Endeavour Mining (EDV) 1,831.00p -1.98%
Kingfisher (KGF) 220.90p -1.73%
British American Tobacco (BATS) 2,489.00p -1.37%

FTSE 250 - Risers

Discoverie Group (DSCV) 702.00p 16.23%
SSP Group (SSPG) 220.80p 3.66%
Drax Group (DRX) 459.40p 3.59%
Tritax Eurobox (GBP) (EBOX) 58.00p 3.39%
Derwent London (DLN) 2,210.00p 2.79%
Safestore Holdings (SAFE) 809.00p 2.53%
AJ Bell (AJB) 255.00p 2.41%
Genuit Group (GEN) 343.00p 2.39%
Supermarket Income Reit (SUPR) 82.90p 2.35%
Big Yellow Group (BYG) 1,127.00p 2.27%

FTSE 250 - Fallers

Auction Technology Group (ATG) 492.00p -5.57%
North Atlantic Smaller Companies Inv Trust (NAS) 3,780.00p -2.83%
easyJet (EZJ) 462.00p -2.70%
Victrex plc (VCT) 1,412.00p -2.55%
Ceres Power Holdings (CWR) 176.10p -2.28%
Centamin (DI) (CEY) 99.30p -1.97%
Scottish American Inv Company (SAIN) 498.50p -1.87%
W.A.G Payment Solutions (WPS) 88.40p -1.78%
Fidelity China Special Situations (FCSS) 206.50p -1.67%
SDCL Energy Efficiency Income Trust (SEIT) 60.60p -1.62%