London open: Stocks muted despite solid retail sales data

London stocks were little changed on Friday despite the release of better-than-expected UK retail sales data.

At 0840 BST, the FTSE 100 was down 0.1% at 7,016.46.

Figures released earlier by the Office for National Statistics showed that retail sales surged in April as non-essential stores reopened.

Retail sales jumped 9.2% on the month following a 5.1% increase in March and versus expectations for a 4.5% rise. The largest contribution came from non-food stores, with sales at clothing stores up 69.4%.

Compared with April 2020 - during the first national lockdown - retail sales were up 42.4%, exceeding expectations for growth of 36.8%.

Sales volumes are now 10.6% higher than in February 2020, before the impact of the coronavirus pandemic.

Deputy National Statistician for Economic Statistics Jonathan Athow said: "Retail sales grew sharply in April and are now over 10% above pre-pandemic levels as restrictions eased and more shops were able to open their doors.

"Clothing sales soared by nearly three quarters as consumers took advantage of being able to visit physical stores. Perhaps unsurprisingly, overall online sales dipped, but still remain high.

"Fuel sales increased again this month, but remain below pre-pandemic level as although more people are travelling, many are still working from home."

Paul Dales, chief UK economist at Capital Economics, said the leap in retail sales volumes in April shows that households flooded back to non-essential shops once they reopened. "This may be the last big leap in retail sales, but there is already evidence that the hospitality sector picked up the growth baton in May," he said.

"With total retail sales now 10.6% above their pre-pandemic peak, there is obviously less scope for further big gains. But the recovery in GfK consumer confidence to pre-pandemic levels in May (to -9 from -15 in April) and the further rise in spending on CHAPS electronic cards in the same month suggests that the overall economic recovery will continue in May."

In equity markets, B&Q owner Kingfisher was in the red, having rallied a day earlier on the back of its first-quarter update.

Hargreaves Lansdown was knocked lower by a downgrade to ‘sell’ at Citi, which said the stock’s valuation looks rich and revenues are more likely-than-not to fall next year.

Diversified Energy was under the cosh after it raised $225m through a placing and open offer to help fund the acquisition of certain upstream assets from Blackbeard Operating and Indigo Minerals. The shares were placed at 112p each, which is an 8.3% discount to the closing mid-market price on Thursday.

Going the other way, GKN owner Melrose Industries was a high riser after an investor day on Thursday.

Builders’ merchant Travis Perkins gained after saying it has sold its plumbing & heating distribution business to an affiliate of alternative investment firm H.I.G. Capital for £325m in cash.

Biffa advanced after the waste management group struck a deal to buy the collections business and some recycling assets from Viridor Waste for £126m.

Close Brothers rose as it reported a strong third quarter, boosted by new banking business and busy trading at its Winterflood securities operation.

Market Movers

FTSE 100 (UKX) 7,016.46 -0.05%
FTSE 250 (MCX) 22,386.77 -0.02%
techMARK (TASX) 4,287.94 -0.09%

FTSE 100 - Risers

Melrose Industries (MRO) 164.40p 1.45%
Imperial Brands (IMB) 1,658.50p 1.10%
Flutter Entertainment (CDI) (FLTR) 12,780.00p 0.87%
Burberry Group (BRBY) 2,118.00p 0.86%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,358.00p 0.82%
Whitbread (WTB) 3,100.00p 0.75%
Weir Group (WEIR) 1,827.50p 0.69%
Renishaw (RSW) 5,450.00p 0.65%
Scottish Mortgage Inv Trust (SMT) 1,161.50p 0.61%
International Consolidated Airlines Group SA (CDI) (IAG) 192.92p 0.58%

FTSE 100 - Fallers

Kingfisher (KGF) 365.40p -2.35%
Fresnillo (FRES) 869.40p -1.09%
Schroders (SDR) 3,533.00p -0.76%
BHP Group (BHP) 2,109.50p -0.75%
B&M European Value Retail S.A. (DI) (BME) 570.20p -0.70%
Anglo American (AAL) 3,133.00p -0.68%
Standard Chartered (STAN) 500.80p -0.63%
Hargreaves Lansdown (HL.) 1,670.50p -0.62%
British Land Company (BLND) 527.00p -0.60%
Associated British Foods (ABF) 2,309.00p -0.60%

FTSE 250 - Risers

Biffa (BIFF) 287.00p 3.61%
Pantheon International (PIN) 2,600.00p 2.36%
Cineworld Group (CINE) 86.94p 2.14%
Hilton Food Group (HFG) 1,250.00p 1.96%
Euromoney Institutional Investor (ERM) 1,030.00p 1.78%
Travis Perkins (TPK) 1,644.00p 1.73%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,055.00p 1.73%
Rank Group (RNK) 180.00p 1.58%
Frasers Group (FRAS) 579.50p 1.58%
Caledonia Investments (CLDN) 3,070.00p 1.32%

FTSE 250 - Fallers

Diversified Energy Company (DEC) 111.00p -9.17%
PureTech Health (PRTC) 336.50p -4.94%
Provident Financial (PFG) 266.40p -2.70%
Homeserve (HSV) 931.50p -2.46%
Tullow Oil (TLW) 49.89p -2.33%
Trainline (TRN) 322.20p -1.95%
Cairn Energy (CNE) 160.00p -1.90%
Royal Mail (RMG) 531.60p -1.52%
HGCapital Trust (HGT) 332.50p -1.48%
Fidelity China Special Situations (FCSS) 403.00p -1.47%