London open: Stocks rise as investors mull retail sales data

London stocks rose in early trade on Friday, taking their cue from positive US and Asian sessions, as investors digested the latest UK retail sales and consumer confidence data.

At 0840 BST, the FTSE 100 was up 0.4% at 7,048.72.

Figures released earlier by the Office for National Statistics showed that retail sales fell in May as households cut spending on food amid the cost-of-living crisis.

Retail sales were 0.5% lower on the month following a 0.4% increase in April, which was revised down from 1.4% growth. This was mainly due to a 1.6% decline in food store sales and leaves sales volumes 2.6% above their pre-Covid February 2020 level. Analysts had been expecting a 0.7% fall on the month.

Heather Bovill, deputy director for surveys and economic indicators at the ONS, said: "Retail sales fell in May driven by a decline in food sales.

"Feedback from supermarkets suggested customers were spending less on their food shop, because of the rising cost of living."

Capital Economics said: "The fall in retail sales in May suggests that the decline in households’ real incomes from surging inflation is starting to hit consumer spending a bit harder. Even so, consumer spending appears to be softening rather than sinking, so we doubt that this will deter the Bank of England from hiking interest rates further."

The figures came as the latest survey from GfK showed that consumer confidence has fallen to an historic low in June as soaring inflation and the weakening economic outlook weighed heavily.

The GfK Consumer Confidence Barometer's overall index was -41 in June, down on May’s -40 and April’s -38. The lowest score recorded during the pandemic was -36, in the first lockdown.

Earlier this week, data from the ONS showed that consumer price inflation rose to a fresh 40-year high of 9.1% in May as energy and food prices continued to surge. This was up from 9% in April and marked the highest level since March 1982.

In equity markets, Ultra Electronics surged as the £2.6bn takeover of the British defence manufacturer by a US private equity firm looked set to be waved on by the UK government after the Department for Business said it was minded to accept the deal.

Elsewhere, Barclays was in focus after it agreed to buy UK specialist mortgage lender Kensington Mortgage Company as part of a deal valued at around £2.3bn.

Retailers were under the cosh after a profit warning from Zalando, with Next, JD Sports, Primark owner AB Foods and M&S all lower.

Energean shares tumbled after top shareholder Growthy Holdings, a holding company owned its chief executive Mathios Rigas, sold 5m shares at £11.06 each.

Market Movers

FTSE 100 (UKX) 7,048.72 0.40%
FTSE 250 (MCX) 18,769.67 0.41%
techMARK (TASX) 4,263.58 1.19%

FTSE 100 - Risers

Pershing Square Holdings Ltd NPV (PSH) 2,430.00p 2.97%
Relx plc (REL) 2,164.00p 1.88%
Halma (HLMA) 1,949.50p 1.88%
Hikma Pharmaceuticals (HIK) 1,572.00p 1.65%
National Grid (NG.) 1,039.50p 1.61%
Spirax-Sarco Engineering (SPX) 9,330.00p 1.57%
Meggitt (MGGT) 780.60p 1.51%
Dechra Pharmaceuticals (DPH) 3,294.00p 1.42%
Prudential (PRU) 947.20p 1.35%
United Utilities Group (UU.) 994.20p 1.35%

FTSE 100 - Fallers

Next (NXT) 5,768.00p -1.87%
Antofagasta (ANTO) 1,152.00p -1.66%
Ocado Group (OCDO) 843.00p -1.45%
Rolls-Royce Holdings (RR.) 80.80p -1.28%
Endeavour Mining (EDV) 1,725.00p -1.26%
JD Sports Fashion (JD.) 112.80p -1.23%
Associated British Foods (ABF) 1,594.00p -1.09%
Kingfisher (KGF) 234.50p -0.93%
Fresnillo (FRES) 771.20p -0.87%
Glencore (GLEN) 440.05p -0.62%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 3,458.00p 12.64%
Future (FUTR) 1,763.00p 3.22%
JPMorgan Japanese Inv Trust (JFJ) 425.00p 3.03%
Indivior (INDV) 310.80p 2.51%
Micro Focus International (MCRO) 296.00p 2.49%
TI Fluid Systems (TIFS) 163.60p 2.25%
Chrysalis Investments Limited NPV (CHRY) 112.80p 2.17%
Discoverie Group (DSCV) 621.00p 2.14%
Carnival (CCL) 711.00p 2.10%
Baillie Gifford Japan Trust (BGFD) 694.00p 2.06%

FTSE 250 - Fallers

Energean (ENOG) 1,095.00p -6.57%
ASOS (ASC) 850.00p -4.23%
Polymetal International (POLY) 196.00p -2.00%
Syncona Limited NPV (SYNC) 202.00p -1.94%
Lancashire Holdings Limited (LRE) 370.60p -1.75%
Greencore Group (CDI) (GNC) 103.40p -1.52%
Marks & Spencer Group (MKS) 136.95p -1.51%
Centamin (DI) (CEY) 79.28p -1.42%
Travis Perkins (TPK) 945.00p -1.21%
Crest Nicholson Holdings (CRST) 241.40p -1.15%