London open: Stocks gain after retail sales, ahead of US data

London stocks edged up in early trade on Tuesday as investors mulled the latest UK retail sales figures and looked ahead to key US data releases.

At 0835 BST, the FTSE 100 was up 0.2% at 8,379.53.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Today, the US will return from its long weekend and we could start seeing some action in the markets. It felt yesterday that the absence of the American markets revived the worries that we might see a rebound in US jobs figures this week - a scenario which would derail the Federal Reserve (Fed) doves, reshuffle the Fed cut expectations and give way to a potentially sizeable price action across different asset classes.

"Hiring and wage growth may have accelerated in August, for example, if that’s the case, the 50bp cut rates from the Fed will simply fall off the bus. And stronger-than-expected figures should, in the first place, let the US dollar recover a part of the recent losses, throw a floor under the US yields, disappoint indices and sectors that rely on rate cuts but give support to others - like the tech - who don’t really need the support of the Fed to do well.

"The jobs data will start flowing in from tomorrow, but investors will have a look at the final ISM figures today."

The ISM manufacturing PMI for August is due at 1500 BST. Before that, the S&P Global manufacturing PMI, also for August, is scheduled for release at 1445 BST.

On home shores, data released earlier showed that retail sales were higher than last year in August despite already strong comparatives in 2023, though growth was relatively subdued amid a "challenging" environment that's likely to last until the end of the year.

The British Retail Consortium-KPMG Retail Sales Monitor for August showed a 1% year-on-year increase in UK retail sales, against an increase of 4.1% in August 2023. This was above the three-month average growth rate of 0.4%, but slightly below the 12-month average of +1.2%.

Food sales were 2.9% higher in the three months to August, making up for the 1.7% decline in non-food sales.

"Sales growth picked up in August, particularly for food as people came together to host barbecue and picnic gatherings for family and friends, and for summer clothing, health and beauty products as people prepared for trips away and summer social events," said BRC chief executive Helen Dickinson.

"While computing did well as university students made the most of summer discounting and readied themselves for the new academic year, other back to school related sales were weaker than normal as some families opted for second hand purchases."

In equity markets, equipment rental firm Ashtead rallied to the top of the FTSE 100 after it posted a drop in first-quarter profit that was in line with market expectations.

Rolls-Royce was also a high riser, having slumped on Monday when it was hit by news that Cathay Pacific had temporarily grounded its fleet of A350 aircraft for inspections after discovering problems with its RR engines.

Hikma was boosted by an upgrade to ‘buy’ from ‘hold’ at Berenberg.

BA and Iberia owner IAG flew higher after an upgrade to ‘buy’ at Redburn. Airlines more generally were up after Wizz Air and Ryanair reported record passenger numbers for August.

Luxury timepiece seller Watches of Switzerland surged as it said it was on track to meet annual guidance after trading for the first 18 weeks of the financial year had been in line with expectations.

The company said demand for key luxury brands, particularly products on registration of interest lists, remained strong in both the UK and US markets, outstripping supply.

Market Movers

FTSE 100 (UKX) 8,379.53 0.19%
FTSE 250 (MCX) 21,021.67 0.20%
techMARK (TASX) 4,927.31 0.08%

FTSE 100 - Risers

Ashtead Group (AHT) 5,556.00p 3.70%
Rolls-Royce Holdings (RR.) 480.10p 3.40%
Hikma Pharmaceuticals (HIK) 2,018.00p 2.23%
Intertek Group (ITRK) 4,946.00p 0.82%
Tesco (TSCO) 358.80p 0.76%
International Consolidated Airlines Group SA (CDI) (IAG) 183.55p 0.74%
easyJet (EZJ) 478.50p 0.74%
Smurfit Westrock (DI) (SWR) 3,535.00p 0.57%
Legal & General Group (LGEN) 225.50p 0.53%
BAE Systems (BA.) 1,331.50p 0.53%

FTSE 100 - Fallers

Anglo American (AAL) 2,186.50p -1.29%
Rightmove (RMV) 699.60p -1.19%
Rio Tinto (RIO) 4,650.00p -1.10%
Next (NXT) 10,005.00p -1.04%
Antofagasta (ANTO) 1,826.00p -0.90%
Fresnillo (FRES) 538.00p -0.74%
Prudential (PRU) 646.60p -0.74%
BP (BP.) 428.55p -0.40%
Entain (ENT) 636.40p -0.38%
Convatec Group (CTEC) 237.40p -0.34%

FTSE 250 - Risers

Watches of Switzerland Group (WOSG) 400.20p 6.32%
Telecom Plus (TEP) 1,858.00p 2.54%
PureTech Health (PRTC) 164.80p 2.36%
Currys (CURY) 81.00p 2.27%
Clarkson (CKN) 3,885.00p 2.24%
AJ Bell (AJB) 438.00p 2.22%
FirstGroup (FGP) 160.40p 1.84%
Primary Health Properties (PHP) 98.50p 1.70%
Allianz Technology Trust (ATT) 353.00p 1.58%
VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 476.50p 1.49%

FTSE 250 - Fallers

AO World (AO.) 110.00p -3.51%
Bridgepoint Group (Reg S) (BPT) 289.40p -3.02%
4Imprint Group (FOUR) 5,180.00p -2.81%
Genuit Group (GEN) 449.50p -2.28%
Ashmore Group (ASHM) 170.40p -1.84%
IntegraFin Holding (IHP) 376.50p -1.83%
Volution Group (FAN) 550.00p -1.79%
Dr. Martens (DOCS) 69.05p -1.43%
Future (FUTR) 1,063.00p -1.39%
Bellevue Healthcare Trust (Red) (BBH) 154.60p -1.28%