London open: Stocks edge down in quiet trade; retail sales in focus

London stocks edged lower in quiet trade early trade on Friday as investors mulled the latest UK retail sales data.

At 0825 BST, the FTSE 100 was down 0.2% at 8,335.16.

Figures released earlier by the Office for National Statistics showed that retail sales bounced back in July, albeit a touch less than expected.

Sales volumes rose 0.5% on the month following a 0.9% decline in June, when they were hit by bad weather and uncertainty over the general election. Economists were expecting a 0.6% increase.

June’s fall was revised from an initial estimate of a 1.2% decline.

The data showed that sales volumes were up 1.4% versus July 2023. Compared with their pre-Covid level in February 2020, sales were down 0.8%.

ONS director of economic statistics Liz McKeown said: "Retail sales grew in July led by increases in department stores and sports equipment shops, with both the Euros and discounting across many stores boosting sales.

"These increases were offset by a poor month for clothing and furniture shops, and falling fuel sales, despite prices at the pump falling."

Alex Kerr, UK economist at Capital Economics, said the better start to the third quarter is not as good as it looks.

Kerr said: "The rebound in sales volumes wasn’t particularly broad based, with sales rising in three of the seven main sub sectors. Department stores posted a 4.0% m/m gain, with the ONS reporting that summer discounting and the Euro 2024 football championship boosted sales volumes. That said, the euros didn’t appear to bolster food sales volumes by much as they were unchanged in July. ‘Other’ stores, such as stalls and markets, and online sales also rose by 2.5% m/m and 0.7% m/m. But clothing and household goods sales both fell by 0.6% m/m. And fuel sales declined by 1.9% m/m, despite the 0.8% m/m fall in petrol prices in July.

"Ultimately, while it is good news that the retail sector has returned to growth at the start of Q3, it is perhaps not as good as the 0.5% m/m rise suggests. That said, overall real consumer spending still rose by 0.2% q/q in Q2 despite the 0.1% q/q decline in retail sales. And if spending off the high street continued to hold up well, overall consumer spending may be more robust than the retail sales data imply. What’s more, we continue to think that rising real incomes, as inflation falls, should mean consumer spending growth accelerates over the rest of this year."

In corporate news, pharma giant GSK was little changed as it welcomed a ruling by the Florida State Court excluding expert testimony in the long-running Zantac lawsuit where the plaintiffs allege the heartburn drug caused cancer.

GSK said it would now seek dismissal of the upcoming Wilson case in Florida - whereby the plaintiffs "alleged a causal link between ranitidine and prostate cancer".

AstraZeneca was also in focus as it announced that ‘Imfinzi’, or durvalumab, has been approved by the US FDA for treating resectable early-stage non-small cell lung cancer in adults without certain genetic mutations.

Market Movers

FTSE 100 (UKX) 8,335.16 -0.15%
FTSE 250 (MCX) 21,085.10 -0.04%
techMARK (TASX) 4,910.33 -0.31%

FTSE 100 - Risers

Pershing Square Holdings Ltd NPV (PSH) 3,706.00p 1.98%
Frasers Group (FRAS) 863.50p 1.95%
CRH (CDI) (CRH) 6,624.00p 1.56%
Flutter Entertainment (DI) (FLTR) 16,180.00p 0.87%
Entain (ENT) 626.00p 0.77%
Fresnillo (FRES) 546.50p 0.64%
Melrose Industries (MRO) 501.20p 0.54%
Glencore (GLEN) 410.70p 0.54%
Beazley (BEZ) 746.50p 0.47%
IMI (IMI) 1,793.00p 0.45%

FTSE 100 - Fallers

BT Group (BT.A) 144.55p -0.82%
Hikma Pharmaceuticals (HIK) 2,058.00p -0.77%
Barclays (BARC) 226.05p -0.75%
Severn Trent (SVT) 2,556.00p -0.74%
Rolls-Royce Holdings (RR.) 499.70p -0.66%
SEGRO (SGRO) 895.00p -0.56%
British American Tobacco (BATS) 2,784.00p -0.54%
Barratt Developments (BDEV) 538.60p -0.52%
Ashtead Group (AHT) 5,284.00p -0.45%
Airtel Africa (AAF) 111.20p -0.45%

FTSE 250 - Risers

Auction Technology Group (ATG) 452.00p 3.55%
Future (FUTR) 1,070.00p 2.79%
Big Yellow Group (BYG) 1,262.00p 1.77%
Bridgepoint Group (Reg S) (BPT) 306.80p 1.66%
Carnival (CCL) 1,104.00p 1.56%
AJ Bell (AJB) 458.50p 1.44%
PureTech Health (PRTC) 173.00p 1.41%
Wizz Air Holdings (WIZZ) 1,253.00p 1.38%
Wetherspoon (J.D.) (JDW) 771.50p 1.31%
IP Group (IPO) 41.00p 1.23%

FTSE 250 - Fallers

Chemring Group (CHG) 397.00p -3.41%
Crest Nicholson Holdings (CRST) 208.20p -2.25%
Bodycote (BOY) 636.00p -2.00%
Henderson Smaller Companies Inv Trust (HSL) 910.00p -1.83%
Balanced Commercial Property Trust Limited (BCPT) 86.00p -1.83%
Dunelm Group (DNLM) 1,194.00p -1.81%
SThree (STEM) 386.50p -1.78%
Baltic Classifieds Group (BCG) 269.50p -1.46%
Spirent Communications (SPT) 173.50p -1.42%
Allianz Technology Trust (ATT) 370.00p -1.33%