London open: Stocks fall on retail sales, China disappointment

London stocks fell in early trade on Tuesday, with sentiment hit after China failed to announce any fresh stimulus and following the release of uninspiring UK retail sales figures.

At 0840 GMT, the FTSE 100 was down 0.4% at 7,608.33.

Investors were mulling news that China has set a growth target of "around 5%" for this year. It also announced the issuance of "ultra-long" special bonds for major projects, according to a government work report.

Richard Hunter, head of markets at Interactive Investor, said "the absence of any measures designed to bolster the economy in terms of stimulus was poorly received, putting pressure on the local markets".

"The weakness in pockets of the economy, most notably the beleaguered property sector, is well-known and it increasingly appears that the authorities are content for natural economic growth to override any shorter term fiscal boosts to repair the economy," he said.

On home shores, data out earlier showed that retail sales growth slowed last month as volumes were dampened by the wettest February on record.

According to the British Retail Consortium-KPMG Retail Sales Monitor, total sales rose 1.1% year-on-year in February, following 5.2% growth the year before. This was lower than the 1.2% growth seen in January and well below the 12-month average growth rate of 3.1%.

Food sales were up 6% year-on-year over the three months to February, under the 12-month average increase of 7.9%, but non-food sales dropped 2.5%, compared with the 12-month average decline of 0.9%.

"Not even Valentine’s Day lifted customers out of the gloom, and gifting products that typically sell well, like jewellery and watches, failed to deliver," said Helen Dickinson, chief executive of the BRC.

"On the sunnier side, rainy weather did brighten sales of toys, as parents looked for ways to occupy their children indoors."

Looking ahead, Linda Ellett, the UK head of consumer markets at KPMG's Leisure & Retail division, said that a "consumer reluctance to get out there and start spending" will likely remain in the short term.

"With big increases in labour costs and business rates just weeks away, adding to an already stressed cost agenda for retailers, many will be pinning their hopes on some good news in the Chancellors’ Spring Budget this week to help kick start a spending revival on the high street. As inflation continues to slow over the coming months and household finances are expected to improve, there is some light at the end of the tunnel for weary households."

In equity markets, heavily-weighted miners were among the worst performers amid disappointment over the announcement in China, with Anglo American, Antofagasta and Rio Tinto all in the red.

Equipment rental firm Ashtead slumped as it said that full-year group revenues will expand at the low end of its guidance as a result of the previously-disclosed slowdown in North America.

Inchcape was under the cosh as it reported double-digit organic revenue and profit growth for the 2023 but struck a more cautious note on the outlook for 2024.

Travis Perkins lost ground as it said it’s looking at exiting its French operations after group operating profits more than halved in 2023.

Office space provider IWG fell as it reported a sharp rise in annual profits but held a cautious line on 2024 prospects, despite bringing in record revenues last year.

On the upside, Intertek rallied as it posted a jump in full-year 2023 profit and said it expects a "robust" performance in 2024.

Spirent Communications rocketed after agreeing to be taken over by US communications equipment company Viavi in a £1bn deal.

Hiscox gained as it hailed record pre-tax profit for the year to the end of December 2023 and announced a $150m share buyback.

High street bakery chain Greggs rose as it maintained guidance and said it had made a strong start to the current year after delivering a jump in 2023 profits as customers sought out its sausage rolls and doughnuts amid the cost of living crisis.

Shareholders were also rewarded with a special 40p-a-share dividend on top of the 62p full-year payout.

Market Movers

FTSE 100 (UKX) 7,608.33 -0.42%
FTSE 250 (MCX) 19,228.10 -0.11%
techMARK (TASX) 4,455.26 2.28%

FTSE 100 - Risers

Intertek Group (ITRK) 4,845.00p 4.85%
Fresnillo (FRES) 484.50p 1.76%
Endeavour Mining (EDV) 1,391.00p 1.68%
Marks & Spencer Group (MKS) 232.90p 1.17%
Next (NXT) 8,260.00p 0.93%
Rolls-Royce Holdings (RR.) 378.70p 0.61%
Melrose Industries (MRO) 643.80p 0.59%
Coca-Cola HBC AG (CDI) (CCH) 2,485.00p 0.57%
GSK (GSK) 1,677.20p 0.56%
BAE Systems (BA.) 1,266.50p 0.52%

FTSE 100 - Fallers

Ashtead Group (AHT) 5,340.00p -6.77%
Ocado Group (OCDO) 436.80p -1.84%
Anglo American (AAL) 1,674.60p -1.63%
Antofagasta (ANTO) 1,810.50p -1.50%
Kingfisher (KGF) 222.80p -1.46%
Prudential (PRU) 762.00p -1.40%
Rio Tinto (RIO) 5,023.00p -1.32%
BT Group (BT.A) 104.90p -1.18%
Persimmon (PSN) 1,384.00p -1.14%
JD Sports Fashion (JD.) 116.90p -1.14%

FTSE 250 - Risers

Spirent Communications (SPT) 172.60p 59.23%
Keller Group (KLR) 925.00p 5.71%
Centamin (DI) (CEY) 99.05p 3.39%
Trustpilot Group (TRST) 187.40p 2.68%
Savills (SVS) 967.00p 2.55%
Hochschild Mining (HOC) 102.50p 2.50%
Hiscox Limited (DI) (HSX) 1,149.00p 2.50%
Tullow Oil (TLW) 29.00p 2.33%
Kainos Group (KNOS) 1,091.00p 2.25%
Bakkavor Group (BAKK) 98.00p 2.08%

FTSE 250 - Fallers

Inchcape (INCH) 628.50p -7.64%
Travis Perkins (TPK) 713.40p -4.29%
IWG (IWG) 178.00p -3.68%
Dr. Martens (DOCS) 92.10p -3.05%
Morgan Advanced Materials (MGAM) 257.50p -2.83%
Aston Martin Lagonda Global Holdings (AML) 160.60p -2.67%
Watches of Switzerland Group (WOSG) 400.40p -2.44%
SThree (STEM) 415.50p -2.12%
Jupiter Fund Management (JUP) 83.40p -1.94%
Ferrexpo (FXPO) 71.60p -1.92%