London midday: FTSE turns up despite disappointing retail sales, gloomy confidence

London stocks had popped into the black by midday on Friday despite disappointing retail sales data and a gloomy consumer confidence survey.

The FTSE 100 was up 0.4% at 7,493.32.

Sentiment was lifted the US and EU struck a deal to increase exports of liquefied natural gas (LNG) to the block and cut its dependence on Russian energy. US President Joe Biden and his European Commission counterpart Ursula von der Leyen said the deal would see LNG shipments to Europe rise by 15 billion cubic metres this year.

On home shores, figures released earlier by the Office for National Statistics showed that retail sales unexpectedly fell in February, with online shopping falling back below pre-pandemic levels and storms keeping shoppers away.

Retail sales declined by 0.3% following a 1.9% jump in January, missing expectations for a 0.6% increase. This left sales 3.7% above pre-pandemic level in February 2020.

Heather Bovill, ONS deputy director for surveys and economic indicators, said: “After a buoyant January, retail sales fell back a little last month.

"There was a notable decline for companies that predominantly trade online, following a strong performance over the festive and new year period."

Meanwhile, the latest survey from GfK showed that consumer sentiment plunged again in March as fears about the soaring cost of living intensified.

The overall score in GfK's consumer confidence index dropped to -31 from -26 a month earlier as all five component measures fell. The overall figure was the lowest since November 2020 when Covid-19 levels were rising rapidly with no vaccine.

More broadly, the Ukraine conflict continued to weigh on investors’ minds following the start of an EU summit in Brussels on Thursday.

Richard Hunter, head of markets at Interactive Investor, said the meeting of Western leaders had provided further focus on the next steps. "These could include further military aid to Ukraine and additional sancti ons on Russia, the latter of which has put further upward pressure on prices ranging from metals to energy and food," he said.

"The oil price dipped temporarily on the possibility of more supply, but remains ahead by 52% in the year to date as the demand supply imbalance remains in plain sight."

In equity markets, Next was boosted by an upgraded to ‘buy’ at SocGen, having fallen sharply a day earlier after it cut guidance.

HomeServe surged to the top of the FTSE 250, racking up strong gains for a second day after Canadian property investment group Brookfield Asset Management said that one of its private infrastructure funds was in the early stages of considering a possible offer for the company.

Elsewhere, Drax rallied an upgrade to ‘overweight’ at Morgan Stanley.

On the downside, diversified engineer Smiths Group fell as it reported a rise in interim profit but said it expected a more challenging aviation market in an uncertain geopolitical and macroeconomic environment.

Airtel Africa tumbled after Singapore Telecom sold 60m shares in the company in a placing.

Gold miner Petropavlovsk, which has operations in Russia, slid after being blocked from making gold sales or interest payments to its main lender, Gazprombank. Russ Mould, investment director at AJ Bell, said: "Is a cash flow crisis about to hit Russia-based gold miner Petropavlovsk? It has been caught up in sanctions on Russia whereby its lender Gazprombank is no longer able to buy its gold.

"Historically the bank had an agreement to buy everything Petropavlovsk produced, so the miner must now find a new taker for its precious metal. That’s going to be difficult in the current environment.

"Petropavlovsk has bills to pay and it will be tricky to settle up if there is no cash coming in the door. It’s no surprise to see the share price fall further on the news, now down 92% year to date."

B&M European Value Retail was under the cosh after a downgrade to ‘neutral’ at Credit Suisse.

Market Movers

FTSE 100 (UKX) 7,493.32 0.35%
FTSE 250 (MCX) 21,037.74 0.69%
techMARK (TASX) 4,344.32 0.32%

FTSE 100 - Risers

Rentokil Initial (RTO) 534.80p 3.84%
Next (NXT) 6,334.00p 2.56%
Sage Group (SGE) 703.00p 2.42%
JD Sports Fashion (JD.) 151.15p 2.37%
SEGRO (SGRO) 1,321.50p 2.36%
Diageo (DGE) 3,833.00p 2.28%
Halma (HLMA) 2,533.00p 2.18%
3i Group (III) 1,353.50p 2.11%
Anglo American (AAL) 4,022.00p 2.06%
Croda International (CRDA) 7,522.00p 1.87%

FTSE 100 - Fallers

Airtel Africa (AAF) 143.10p -7.97%
Barratt Developments (BDEV) 505.60p -3.81%
Persimmon (PSN) 2,119.00p -3.33%
Taylor Wimpey (TW.) 132.85p -3.28%
Antofagasta (ANTO) 1,725.00p -3.17%
B&M European Value Retail S.A. (DI) (BME) 564.00p -2.86%
Berkeley Group Holdings (The) (BKG) 3,829.00p -2.72%
Reckitt Benckiser Group (RKT) 5,512.00p -2.18%
Fresnillo (FRES) 752.80p -1.93%
Endeavour Mining (EDV) 1,885.00p -1.82%

FTSE 250 - Risers

Homeserve (HSV) 898.00p 11.35%
Drax Group (DRX) 764.50p 7.68%
Polymetal International (POLY) 175.00p 5.42%
Trustpilot Group (TRST) 144.00p 4.35%
Provident Financial (PFG) 318.00p 4.19%
Dr. Martens (DOCS) 241.60p 3.34%
QinetiQ Group (QQ.) 313.60p 3.23%
Bridgepoint Group (Reg S) (BPT) 328.00p 3.14%
Watches of Switzerland Group (WOSG) 1,160.00p 3.02%
Hammerson (HMSO) 31.84p 2.94%

FTSE 250 - Fallers

Bellway (BWY) 2,616.00p -4.11%
Vistry Group (VTY) 946.40p -3.76%
Crest Nicholson Holdings (CRST) 275.20p -2.96%
Countryside Partnerships (CSP) 274.80p -2.90%
TP Icap Group (TCAP) 145.50p -2.87%
Hochschild Mining (HOC) 129.20p -2.49%
Redrow (RDW) 527.40p -2.41%
Syncona Limited NPV (SYNC) 165.00p -2.37%
Ferrexpo (FXPO) 166.20p -2.29%
Harbour Energy (HBR) 488.20p -2.28%