London midday: Stocks fall after worse-than-expected UK retail sales

London stocks were in the red on Thursday after worse-than-expected UK retail sales data and before the European Central Bank’s latest policy decision.

UK retail sales rose less than expected in June compared to the same month a year ago as unseasonably cold weather hurt clothing stores, official data showed on Thursday. The Office for National Statistics said retail sales increased 4.3% year-on-year in June, missing forecasts for a 5.1% gain and following 5.7% growth in May. On the month, retail sales fell 0.9% in June, more than the 0.5% drop estimated and after a 0.9% rise in May.

"Following the vote to leave the EU, the strong suspicion is that consumers will face higher unemployment and less favourable purchasing power as inflation rises and earnings growth is limited by companies striving to limit their costs,” said IHS Global Insight economist Howard Archer.

Meanwhile, the ECB is expected to follow the lead from the Bank of England in keeping policy unchanged until more economic data on the impact of the 24 June Brexit vote becomes available. All key rates are forecast to remain on hold along with the quantitative easing programme when the ECB makes its announcement at 1245 BST.

ECB President Mario Draghi’s press conference at 1330 BST will be the main focus, with analysts looking out for any clues on the central bank’s future policy plans and any remarks on the European Union referendum.

“Draghi's press conference is likely to be littered with the usual dovishness to keep investors happy about accommodative policy for longer,” said Mike van Dulken, head of research at Accendo Markets.

On the company front, travel stocks EasyJet, IAG and TUI led the fallers as Turkey declared a state of emergency. EasyJet also reported a drop in revenue per seat and total revenue for the third quarter amid difficult trading that was hit by the terror attack in Brussels and the EgyptAir tragedy.

Mining stocks rebounded from the previous day’s drop with Anglo American, Glencore, Antofagasta and BHP Billiton in the black.

William Hill gained as chief executive James Henderson stepped down with immediate effect and was replaced by Philip Bowcock following a recent poor performance by the bookmaker.

AO World rallied as the online white goods retailer reported strong growth in first-quarter revenues.

Market Movers

FTSE 100 (UKX) 6,707.90 -0.31%
FTSE 250 (MCX) 16,968.92 -0.29%
techMARK (TASX) 3,401.18 -0.45%

FTSE 100 - Risers

Anglo American (AAL) 822.30p 6.19%
Ashtead Group (AHT) 1,174.00p 4.08%
Glencore (GLEN) 182.10p 3.35%
Antofagasta (ANTO) 498.30p 3.19%
BHP Billiton (BLT) 953.20p 2.89%
Rio Tinto (RIO) 2,402.00p 2.69%
ITV (ITV) 191.50p 2.02%
Burberry Group (BRBY) 1,318.00p 2.01%
Mediclinic International (MDC) 1,088.00p 1.12%
Old Mutual (OML) 203.80p 1.09%

FTSE 100 - Fallers

easyJet (EZJ) 1,053.00p -6.57%
International Consolidated Airlines Group SA (CDI) (IAG) 404.10p -3.95%
Sky (SKY) 874.50p -2.78%
BT Group (BT.A) 378.95p -2.68%
Land Securities Group (LAND) 1,074.00p -2.36%
TUI AG Reg Shs (DI) (TUI) 930.00p -2.05%
Direct Line Insurance Group (DLG) 341.00p -2.01%
Marks & Spencer Group (MKS) 329.20p -1.85%
Next (NXT) 4,952.00p -1.65%
CRH (CRH) 2,183.00p -1.44%

FTSE 250 - Risers

AO World (AO.) 144.50p 7.51%
Hochschild Mining (HOC) 225.00p 5.78%
William Hill (WMH) 290.10p 5.45%
Weir Group (WEIR) 1,554.00p 4.23%
Vedanta Resources (VED) 519.50p 3.80%
Cobham (COB) 171.80p 3.37%
Ocado Group (OCDO) 274.20p 3.12%
Euromoney Institutional Investor (ERM) 991.00p 2.85%
Virgin Money Holdings (UK) (VM.) 238.00p 2.85%
Tullow Oil (TLW) 218.00p 2.68%

FTSE 250 - Fallers

DFS Furniture (DFS) 212.10p -5.02%
Wizz Air Holdings (WIZZ) 1,456.00p -4.52%
IP Group (IPO) 150.00p -3.47%
Daejan Holdings (DJAN) 5,285.00p -3.38%
NCC Group (NCC) 322.00p -3.30%
OneSavings Bank (OSB) 210.80p -3.17%
Rathbone Brothers (RAT) 1,781.00p -2.94%
Derwent London (DLN) 2,723.00p -2.75%
McCarthy & Stone (MCS) 159.50p -2.74%
Metro Bank (MTRO) 1,900.00p -2.66%