London open: Stocks fall as retail sales disappoint

London stocks fell in early trade on Friday, taking their cue from weakness in the US and Asia, as investors mulled a bigger-than-expected drop in UK retail sales.

At 0850 BST, the FTSE 100 was down 0.6% at 8,285.47.

Figures released earlier by the Office for National Statistics showed that retail sales fell sharply in April, compounding a revised fall a month earlier.

Retail sales volumes fell by 2.3% last month, following a 0.2% decline in March. That was revised down from its previous estimate of 0.0%.

The ONS attributed the slide to the poor weather, as heavy, persistent rain kept shoppers at home. It said volumes had fallen across most sectors, with clothing, sports equipment, games and toys and furniture stores doing badly.

In total, non-food store sales volumes fell by 4.1%.

In the three months to April, overall sales rose by 0.7% compared to the previous three months, following a weak December 2023.

In the year to April, however, sales were down 2.7%, and remain 3.8% below pre-pandemic levels.

The data bucks more upbeat economic data released recently, including an uptick in consumer confidence, inflation returning to 2.3% and the UK leaving recession following faster-than-expected growth of 0.6%.

Elsewhere, a survey showed that UK consumer confidence sparked in May as households become more upbeat about the economy and their finances.

The latest GfK consumer confidence index, published on Friday, rose two points in May to -17.

Within that, expectations for the general economic situation over the next year increased by four points to -17. The forward-looking personal finance situation also jumped, up five points to 7.

The only sub-measure that fell was the major purchase index, which dipped a point to -26.

Joe Staton, client strategy director at GfK, said: "With the latest drop in headline inflation and the prospect of interest rate cuts in due course, the trend is certainly positive after a long period of stasis which has seen the overall index score stuck in the doldrums.

"All-in-all, consumers are clearly sensing that conditions are improving. This good result anticipates further growth in confidence in the months to come."

However, Staton added that the dip in the major purchase index "reinforces the fact that the cost of living crisis is still a day-to-day reality for all of us".

In equity markets, Intertek jumped to the top of the FTSE 100 after it backed its full-year expectations as it hailed a strong start to the year, with 7% growth in like-for-like revenue, driven by a strong recovery in the consumer products segment.

Packaging group Mondi was in the black after an upgrade to ‘buy’ at Citi. The bank said that after a difficult couple of years, the market headwinds of destocking and lower pricing are reversing across Mondi’s product segments (board, flexibles, paper).

Oil services company Wood Group ticked up after saying it had rejected a third improved takeover proposal from Dubai-based engineering and consulting company Sidara, saying it continued to "significantly undervalue" the group and its prospects.

Sidara upped its latest offer by 3.8% to 220p-a-share on May 21 from 212p a week ago and the 205p initial approach. It has until June 5 to make a firm bid.

GSK ticked up after a court in Illinois has ruled in its favour in the first Zantac case to go to trial.

On the downside, National Grid tumbled again, having fallen sharply on Thursday after saying it was planning a £7bn equity raise through a rights issue.

AJ Bell was under the cosh after founder Andy Bell sold 7.5m shares in the investment platform in a placing at 375p each, raising around £28.1m.

Market Movers

FTSE 100 (UKX) 8,285.47 -0.64%
FTSE 250 (MCX) 20,532.80 -0.48%
techMARK (TASX) 4,832.37 -0.49%

FTSE 100 - Risers

Intertek Group (ITRK) 5,080.00p 2.54%
Mondi (MNDI) 1,587.00p 0.76%
BT Group (BT.A) 128.15p 0.67%
Next (NXT) 9,348.00p 0.43%
easyJet (EZJ) 458.20p 0.35%
Vodafone Group (VOD) 74.38p 0.27%
Frasers Group (FRAS) 830.00p 0.24%
JD Sports Fashion (JD.) 121.65p 0.12%
GSK (GSK) 1,780.00p 0.11%
Flutter Entertainment (DI) (FLTR) 15,860.00p 0.03%

FTSE 100 - Fallers

National Grid (NG.) 905.40p -9.91%
Smith (DS) (SMDS) 366.60p -2.60%
St James's Place (STJ) 476.40p -2.38%
Fresnillo (FRES) 598.00p -1.89%
Lloyds Banking Group (LLOY) 54.76p -1.83%
Entain (ENT) 703.40p -1.79%
Spirax-Sarco Engineering (SPX) 8,990.00p -1.53%
Scottish Mortgage Inv Trust (SMT) 886.20p -1.53%
Barclays (BARC) 211.75p -1.51%
Halma (HLMA) 2,276.00p -1.43%

FTSE 250 - Risers

SDCL Energy Efficiency Income Trust (SEIT) 63.90p 3.40%
Travis Perkins (TPK) 855.50p 2.82%
NB Private Equity Partners Ltd. (NBPE) 1,630.00p 2.52%
Abrdn (ABDN) 157.90p 1.22%
Tyman (TYMN) 379.00p 1.20%
W.A.G Payment Solutions (WPS) 68.80p 1.18%
Scottish American Inv Company (SAIN) 518.00p 1.17%
Foresight Solar Fund Limited (FSFL) 87.70p 1.15%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 483.50p 1.15%
Wood Group (John) (WG.) 182.00p 1.11%

FTSE 250 - Fallers

Bakkavor Group (BAKK) 128.50p -4.46%
AJ Bell (AJB) 386.00p -4.22%
Hargreaves Lansdown (HL.) 1,078.00p -3.75%
QinetiQ Group (QQ.) 410.00p -3.39%
Carnival (CCL) 1,043.00p -2.57%
Kainos Group (KNOS) 1,218.00p -2.56%
Ferrexpo (FXPO) 43.85p -2.34%
Aston Martin Lagonda Global Holdings (AML) 132.90p -2.21%
Diversified Energy Company (DEC) 1,092.00p -2.06%
Keller Group (KLR) 1,342.00p -2.04%