London open: Stocks fall as investors mull retail sales, consumer confidence data

London stocks fell in early trade on Friday as investors continued to assess the impact of the latest interest rate hike, with retail sales and consumer confidence data in focus.

At 0840 BST, the FTSE 100 was down 0.3% at 7,478.31.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: "Yesterday's super-hike to UK interest rates, and the fact there's likely more to come, continue to play on investors' minds as they weigh up the impact on corporate earnings."

Markets participants were also digesting data from the Office for National Statistics, which showed that retail sales unexpectedly rose in May, by 0.3%, following a 0.5% increase in April. Analysts were expecting a 0.2% decline.

Non-store retailing sales volumes rose by 2.7%, mainly thanks to strong sales by online retailers selling outdoor goods and summer clothing. This was boosted by the warm weather in the second half of the month, the ONS said.

Ruth Gregory, deputy chief UK economist at Capital Economics, said: "The further rebound in retail sales volumes in May suggests the recent resilience in economic activity hasn’t yet faded. But we think it’s too soon to conclude the rebound in retail sales will be sustained and the economy will avoid a recession."

In addition, a survey out earlier showed that consumer confidence continued to push higher in June despite the ongoing cost-of-living squeeze.

The latest consumer confidence index from GfK showed a three-point rise in June to -24. While still in negative territory, the index is now well above the same month a year previously, when it was -41.

It is also the fifth consecutive increase, and the best showing for 17 months.

Within that, the personal financial situation measure for the coming year jumped seven points to -1, while the forward-looking general economic situation rose five points to -25.

The major purchase index, however, dipped a point to -25.

Joe Staton, client strategy director at GfK, said: "Despite the fierce economic headwinds of the cost-of-living crisis, double-digit grocery price increases and the mortgage squeeze severely impacting both homeowners and renters alike, the index improved by three points.

"Consumers are showing remarkable resilience in the face of inflation that is currently refusing to yield.

"If consumers continue to weather the current economic storm, this will provide a firm foundation for getting back to growth."

The survey was carried out before the Bank of England’s latest decision on interest rates, which saw the Monetary Policy Committee on Thursday up the cost of borrowing by a larger-than-expected 50 basis points, to 5%. Inflation currently stands at 8.7%, unchanged on the previous month.

In equity markets, Ocado was the worst performer on the FTSE 100, having surged on Thursday amid speculation it was a takeover target for Amazon.

Housebuilders were also under the cosh as investors fretted about the impact of surging borrowing costs. Berkeley, Persimmon, Barratt, Taylor Wimpey, Redrow, Crest Nicholson and Bellway all slumped.

On the upside, GSK rallied after the pharmaceuticals group said that a Zantac trial that was due to begin next month in California was dismissed after a confidential settlement was agreed. Haleon also gained on the news.

Market Movers

FTSE 100 (UKX) 7,478.31 -0.32%
FTSE 250 (MCX) 18,273.74 -0.30%
techMARK (TASX) 4,491.33 0.19%

FTSE 100 - Risers

GSK (GSK) 1,411.80p 3.89%
Haleon (HLN) 329.90p 1.51%
Fresnillo (FRES) 614.00p 0.79%
Imperial Brands (IMB) 1,766.50p 0.71%
Croda International (CRDA) 5,490.00p 0.70%
Convatec Group (CTEC) 208.20p 0.68%
British American Tobacco (BATS) 2,604.00p 0.56%
Pearson (PSON) 815.00p 0.49%
Weir Group (WEIR) 1,733.00p 0.49%
Mondi (MNDI) 1,184.50p 0.38%

FTSE 100 - Fallers

Ocado Group (OCDO) 513.40p -9.58%
Berkeley Group Holdings (The) (BKG) 3,757.00p -2.97%
Smith (DS) (SMDS) 272.50p -2.82%
Bunzl (BNZL) 2,962.00p -2.31%
Persimmon (PSN) 1,082.00p -1.95%
Barratt Developments (BDEV) 410.40p -1.89%
JD Sports Fashion (JD.) 147.05p -1.80%
Taylor Wimpey (TW.) 100.95p -1.70%
Rolls-Royce Holdings (RR.) 153.75p -1.47%
Standard Chartered (STAN) 658.60p -1.44%

FTSE 250 - Risers

Hilton Food Group (HFG) 687.00p 4.89%
CMC Markets (CMCX) 162.20p 2.27%
Capita (CPI) 29.64p 1.51%
PureTech Health (PRTC) 229.50p 1.32%
Bankers Inv Trust (BNKR) 97.50p 0.93%
Centamin (DI) (CEY) 92.10p 0.88%
Pantheon International (PIN) 259.00p 0.78%
HICL Infrastructure (HICL) 130.00p 0.78%
Moneysupermarket.com Group (MONY) 269.60p 0.75%
Indivior (INDV) 1,800.00p 0.73%

FTSE 250 - Fallers

Redrow (RDW) 434.20p -4.11%
Crest Nicholson Holdings (CRST) 193.10p -3.74%
OSB Group (OSB) 465.80p -2.14%
Bellway (BWY) 1,968.00p -1.99%
Wizz Air Holdings (WIZZ) 2,744.00p -1.93%
Essentra (ESNT) 164.60p -1.91%
Edinburgh Worldwide Inv Trust (EWI) 140.40p -1.68%
Vistry Group (VTY) 646.50p -1.67%
IWG (IWG) 144.20p -1.64%
Witan Inv Trust (WTAN) 221.00p -1.56%