London open: Stocks edge up despite gloomy consumer confidence survey

London stocks edged higher in early trade on Monday despite the release of a gloomy consumer confidence survey, as investors continued to eye developments in the Ukraine conflict.

At 0900 BST, the FTSE 100 was up 0.2% at 7,549.93, taking its cue from a positive close on Wall Street at the end of last week,

Richard Hunter, head of markets at Interactive Investor, said: "The generally positive baton has been passed to the UK in early trade following decent performances for the most part from the US and Asia, with the FTSE 100 consolidating its status as an outperformer this year.

"The index is now ahead by 2.5% in 2022, continuing to ride the wave of overseas institutional buying interest given its perceived attractions on both defensive and valuation grounds.

"The conflict between Russia and Ukraine continues to engender a split between hope and despair. Reports of some progress in talks aimed at ending the war continue to be offset by further reports of Russian atrocities which have seemingly strengthened the resolve of other nations to ratchet up sanctions once more.

"The oil price has shown some recent weakness after the actual and potential release of further supply, alongside a truce in Yemen, although even allowing for this dip the price is still ahead by 36% so far this year."

Despite the positive tone, gains were unspectacular amid news the EU is preparing to impose further sanctions against Russia following reports that its troops executed unarmed civilians in Ukrainian towns.

A grim consumer confidence survey from PwC also didn't help. It showed that confidence suffered its biggest fall in March since the financial crisis of 2008 as worries about inflation and disposable income took their toll.

The consumer sentiment index declined to -20 after peaking at +10 in June last year. This 30-point drop in nine months marks the biggest sustained fall since the financial crisis, although the index remains higher than it was at the start of the pandemic, when it stood at -26.

This time last year, the index stood at +8 amid the prospect of lockdown easing.

The survey showed that spending expectations on going out and eating out have dropped significantly, with both categories now the lowest. Meanwhile, holidays and fashion spending have also seen substantial falls since last Spring.

Grocery shopping was the only category where people expect to spend more, rather than less in the next 12 months. However, this is likely to be driven almost exclusively by inflation, rather than specifically heightened consumer demand.

The survey also found that sentiment has fallen in almost every age group, but the gap between the most and least optimistic is wider than ever.

Lisa Hooker, consumer markets Leader at PwC, said: "The shift in sentiment is both significant and sudden. Whilst there is still some post-Covid recovery, spending expectations on eating out and going out have plummeted as consumers look to tighten their belt as they face up to cost of living pressures. Even after the extensive travel disruption over the last two years, holiday spending is not immune and will consumers prioritise their main holiday over other breaks, like we saw during the global financial crisis?"

In equity markets, Endeavour Mining rose after saying it was set to start construction of the $290m expansion of its Sabodala-Massawa gold project in Senegal.

Elsewhere, B&Q owner Kingfisher rallied after an upgrade to ‘buy’ from ‘hold’ at Deutsche Bank, while Just Group surged to the top of the FTSE 250 after an upgrade to ‘overweight’ at Barclays. The bank said: "We are positive on the outlook for bulk annuities and Just has the highest exposure amongst the listed UK life insurers that we cover."

On the downside, BA owner IAG and budget airline easyJet were both lower after saying they had been forced to cancel dozens of flights due to Covid-related staff absences.

Market Movers

FTSE 100 (UKX) 7,549.93 0.16%
FTSE 250 (MCX) 21,247.19 0.14%
techMARK (TASX) 4,340.78 0.36%

FTSE 100 - Risers

BAE Systems (BA.) 735.00p 2.97%
Endeavour Mining (EDV) 1,972.00p 2.92%
Kingfisher (KGF) 264.70p 2.56%
B&M European Value Retail S.A. (DI) (BME) 545.20p 2.06%
Rightmove (RMV) 646.40p 1.80%
Hargreaves Lansdown (HL.) 1,001.00p 1.60%
Hikma Pharmaceuticals (HIK) 2,066.00p 1.32%
Sainsbury (J) (SBRY) 252.10p 1.29%
Smith & Nephew (SN.) 1,229.00p 1.24%
AstraZeneca (AZN) 10,180.00p 1.03%

FTSE 100 - Fallers

NATWEST GROUP PLC ORD 100P (NWG) 214.50p -1.56%
WPP (WPP) 990.60p -1.53%
InterContinental Hotels Group (IHG) 5,080.00p -1.36%
Burberry Group (BRBY) 1,655.50p -1.08%
International Consolidated Airlines Group SA (CDI) (IAG) 139.70p -1.05%
Rolls-Royce Holdings (RR.) 98.33p -1.05%
Informa (INF) 598.20p -0.99%
Whitbread (WTB) 2,845.00p -0.97%
Standard Chartered (STAN) 505.60p -0.82%
Aviva (AV.) 441.00p -0.81%

FTSE 250 - Risers

Just Group (JUST) 97.70p 8.37%
Polymetal International (POLY) 334.90p 6.45%
Indivior (INDV) 301.40p 5.75%
PureTech Health (PRTC) 210.00p 2.19%
Babcock International Group (BAB) 329.20p 1.79%
Drax Group (DRX) 789.00p 1.74%
Chemring Group (CHG) 329.00p 1.70%
Murray Income Trust (MUT) 897.00p 1.59%
Centamin (DI) (CEY) 93.30p 1.55%
Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 311.50p 1.47%

FTSE 250 - Fallers

SSP Group (SSPG) 221.30p -2.47%
Liontrust Asset Management (LIO) 1,282.00p -1.99%
CMC Markets (CMCX) 248.50p -1.97%
easyJet (EZJ) 544.60p -1.87%
Helios Towers (HTWS) 117.90p -1.59%
Chrysalis Investments Limited NPV (CHRY) 175.00p -1.57%
Baltic Classifieds Group (BCG) 142.40p -1.39%
Clipper Logistics (CLG) 863.00p -1.37%
Close Brothers Group (CBG) 1,194.00p -1.24%
AJ Bell (AJB) 303.60p -1.17%