London midday: FTSE still a little firmer despite disappointing data

London stocks were still a little firmer by midday on Friday, despite disappointing retail sales and consumer confidence data.

The FTSE 100 was up 0.2% at 7,760.51.

Russ Mould, investment director at AJ Bell, said: "European stocks pushed forward alongside a good showing from parts of Asia, including a 1.8% rise in Hong Kong’s Hang Seng index as investors bid up energy and internet stocks.

"The FTSE 100 was lifted by oil producers, miners, banks and utility companies. Investors noted price strength among major commodities which would support earnings for natural resources producers. Brent Crude oil rose by 1% to $87.02 per barrel while copper this week hit its highest level since June 2022 on hopes for an increase in demand linked to China’s reopening and amid low inventories."

Figures released earlier by 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, power generator SSE rose 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.

Online fashion retailer ASOS surged after an upgrade to ‘buy’ at Bank of America Merrill Lynch.

Spirent Communications tumbled, however, despite saying it expects to deliver an adjusted operating profit slightly ahead of market consensus, with good earnings growth over 2021.

Close Brothers also slid after the merchant bank said it will be setting aside a further £90m against bad loans from Novitas and that the performance of Winterflood Securities continues to be hit by the 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) 7,760.51 0.17%
FTSE 250 (MCX) 19,618.33 0.23%
techMARK (TASX) 4,449.64 -0.43%

FTSE 100 - Risers

3i Group (III) 1,447.50p 2.26%
Burberry Group (BRBY) 2,349.00p 2.00%
Fresnillo (FRES) 935.00p 1.79%
JD Sports Fashion (JD.) 155.40p 1.73%
SSE (SSE) 1,731.50p 1.73%
Rightmove (RMV) 568.40p 1.54%
Hiscox Limited (DI) (HSX) 1,137.50p 1.47%
Prudential (PRU) 1,301.50p 1.44%
Whitbread (WTB) 3,003.00p 1.38%
Flutter Entertainment (CDI) (FLTR) 12,420.00p 1.26%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 865.80p -2.43%
AstraZeneca (AZN) 11,238.00p -1.59%
Melrose Industries (MRO) 143.45p -1.58%
Pearson (PSON) 930.20p -1.27%
Scottish Mortgage Inv Trust (SMT) 732.40p -1.19%
Coca-Cola HBC AG (CDI) (CCH) 1,911.50p -0.91%
GSK (GSK) 1,406.00p -0.89%
Admiral Group (ADM) 2,099.00p -0.80%
British Land Company (BLND) 432.30p -0.76%
Experian (EXPN) 2,943.00p -0.64%

FTSE 250 - Risers

ASOS (ASC) 751.50p 7.36%
Darktrace (DARK) 244.20p 3.78%
TBC Bank Group (TBCG) 2,290.00p 3.62%
4Imprint Group (FOUR) 4,620.00p 3.24%
Dunelm Group (DNLM) 1,069.00p 2.59%
Carnival (CCL) 739.00p 2.50%
Aston Martin Lagonda Global Holdings (AML) 166.90p 2.49%
SDCL Energy Efficiency Income Trust (SEIT) 97.10p 2.32%
Tullow Oil (TLW) 37.64p 2.23%
TUI AG Reg Shs (DI) (TUI) 186.70p 2.19%

FTSE 250 - Fallers

Spirent Communications (SPT) 230.80p -16.80%
Close Brothers Group (CBG) 925.50p -11.69%
Dr. Martens (DOCS) 138.80p -4.21%
Network International Holdings (NETW) 272.80p -3.81%
Future (FUTR) 1,446.00p -2.36%
888 Holdings (DI) (888) 90.55p -1.74%
Dechra Pharmaceuticals (DPH) 2,744.00p -1.65%
Direct Line Insurance Group (DLG) 172.00p -1.52%
Serco Group (SRP) 151.00p -1.24%
Great Portland Estates (GPE) 542.00p -1.19%