London midday: Retail sales buoy stocks

Stocks in London edged higher on the heels of surprisingly strong official retail sales data as investors waited on a speech by Federal Reserve chair Janet Yellen.

At 1154 GMT, the FTSE 100 was up 0.31% or 21.19 points to 6,770.91. Meanwhile, the pound was modestly higher versus the US dollar, gaining 0.31% to 1.2472 while the yield on the benchmark 10-year gilt was steady at 1.39%.

Helping to prop up prices for government bonds around the world, including in the UK, overnight the Bank of Japan announced its willingness to purchase unlimited amounts of debt at fixed yields, with the aim of supporting its economy.

British consumers continued to spend freely in October, surprising most economists. Retail sales volumes jumped 1.9% month-on-month, handily beating estimates for a rise of 0.5%.

"The reality is that people are unlikely to have held back on spending just yet because people’s daily lives haven’t materially changed from before the referendum. Equally, although price deflation is lessening month-on-month, prices have not significant risen given the recent GBP depreciation, likely aided by ongoing supermarket “price wars”; we expect it to be felt only gradually next year," said economists at Barclays Research.

In the US, the text of Fed chair Janet Yellen´s speech was expected to be published at about 1300 GMT.

Also on investors' radar, the US consumer price index, building permits, housing starts and initial jobless claims were all set for release shortly afterwards at 1330 GMT.

Markets were also expected to keep close tabs on the results of the first meeting between US President-elect Donald Trump and a foreign leader, Japanese prime minister Shinzo Abe.

Acting as a backdrop, reports indicated that JP Morgan Chase chief Jamie Dimon had turned down an offer to become the next US Secretary of the Treasury.

In corporate news, Royal Mail slumped after it said half-year revenue edged up thanks to its European business, but the EU referendum resulted in a reduction in UK marketing activity.

Building materials group CRH gained as it reported a 6% rise in cumulative sales in the first nine months of the year and said it continues to expect earnings for the year to be in excess of €3bn, while Great Portland Estates lost ground after reporting a half-year loss.

Engineering consultancy WS Atkins declined as it posted a 14% rise in underlying pre-tax tax profit for the six months to the end of September, but a 58% drop in statutory pre-tax profit.

Rio Tinto edged higher after terminating the contracts of two directors following an internal review into a controversial payment to a consultant concerning the Simando iron ore project in Guinea.

Investec advanced as it said first-half profit pushed up 20%, while Ted Baker rallied after it said revenue in the third quarter rose 14.8%, up a touch from the 14.4% acceleration seen in the first half of the year.

Merchant bank Close Brothers was also in the black as it said it has made a “very good start to the year”, mainly on the back of strength in its banking division and higher trading income in market maker Winterflood.

Market Movers

FTSE 100 (UKX) 6,770.04 0.30%
FTSE 250 (MCX) 17,537.56 0.36%
techMARK (TASX) 3,304.49 0.11%

FTSE 100 - Risers

Mondi (MNDI) 1,548.00p 2.45%
Carnival (CCL) 4,045.00p 2.25%
Barratt Developments (BDEV) 479.10p 2.04%
British Land Company (BLND) 604.50p 2.03%
Diageo (DGE) 2,041.00p 1.92%
Anglo American (AAL) 1,113.50p 1.78%
CRH (CRH) 2,749.00p 1.78%
Provident Financial (PFG) 2,898.00p 1.68%
Hammerson (HMSO) 556.50p 1.64%
Randgold Resources Ltd. (RRS) 5,945.00p 1.62%

FTSE 100 - Fallers

Royal Mail (RMG) 468.60p -6.07%
Hikma Pharmaceuticals (HIK) 1,676.00p -3.29%
Rolls-Royce Holdings (RR.) 718.50p -2.71%
TUI AG Reg Shs (DI) (TUI) 1,006.00p -2.33%
Johnson Matthey (JMAT) 3,258.00p -2.31%
Marks & Spencer Group (MKS) 332.90p -1.36%
Shire Plc (SHP) 4,783.00p -1.28%
Prudential (PRU) 1,505.50p -0.99%
Royal Bank of Scotland Group (RBS) 206.60p -0.86%
Sainsbury (J) (SBRY) 237.40p -0.84%

FTSE 250 - Risers

Vectura Group (VEC) 140.40p 4.46%
AA (AA.) 264.10p 3.81%
Safestore Holdings (SAFE) 360.00p 3.66%
Investec (INVP) 518.50p 3.60%
Hill & Smith Holdings (HILS) 1,252.00p 3.47%
Hochschild Mining (HOC) 236.50p 3.41%
Rightmove (RMV) 3,787.00p 3.16%
Daejan Holdings (DJAN) 5,650.00p 3.10%
Zoopla Property Group (ZPLA) 313.10p 3.03%
Bovis Homes Group (BVS) 828.50p 2.86%

FTSE 250 - Fallers

Lancashire Holdings Limited (LRE) 630.00p -10.38%
Virgin Money Holdings (UK) (VM.) 317.90p -6.09%
Softcat (SCT) 305.80p -6.05%
Euromoney Institutional Investor (ERM) 985.00p -4.83%
Greencore Group (GNC) 309.00p -3.65%
Redefine International (RDI) 37.64p -3.04%
TalkTalk Telecom Group (TALK) 184.40p -2.69%
Allied Minds (ALM) 344.60p -2.66%
Great Portland Estates (GPOR) 611.00p -2.63%
Fisher (James) & Sons (FSJ) 1,556.00p -2.63%