London open: Stocks rise as retail sales beat expectations

London stocks rose in early trade on Friday, taking their cue from an upbeat session in Asia, and following the release of better-than-expected retail sales data.

At 0825 BST, the FTSE 100 was up 1.1% at 7,384.19, having slumped a day earlier amid worries about inflation and slowing global growth.

Sentiment got a boost after China’s central bank cut the five-year loan prime rate by a bigger-than-expected 15 basis points.

On home shores, meanwhile, figures from the Office for National Statistics showed that retail sales unexpectedly rose in April, underpinned in part by an increase in food store sales.

Retail sales were up 1.4% following a 1.2% decline March, and versus expectations for a 0.2% drop. Compared with pre-Covid February 2020 levels, retail sales were up 4.1%.

Food store sales were up 2.8%, mostly due to higher spending on alcohol and tobacco in supermarkets, the ONS said. Meanwhile, fuel sales rose 1.4% in the month and sales at non-food stores were 0.6% lower.

ONS deputy director for surveys and economic indicators, Heather Bovill, said: "April's rise was driven by an increase in supermarket sales, led by alcohol and tobacco and sweet treats, with off-licences also reporting a boost, possibly due to people staying in more to save money."

In the three months to April, retail sales were down 0.3% following a 0.7% decline in March.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The impact of April’s increase in both National Insurance Contributions and energy bills hasn’t fully emerged in the retail sales data yet, because most people only get paid towards the end of the month, and bills will be paid progressively through the month.

"It won’t be until May’s data that we can assess how much of the resulting squeeze on households’ real disposable incomes has fed through to spending."

He said the rise in food store sales "suggests that people are responding to the real income squeeze by spending less in pubs and bars".

Separately, a survey from GfK showed that UK consumer confidence fell to its lowest in May since records began in 1974 amid the cost-of-living crisis. GfK’s consumer confidence index fell 2 percentage points to -40.

In corporate news, merchant banking group Close Brothers was in the black after saying it had performed well in the third quarter.

Croda rallied after it backed its full-year expectations and said trading in 2022 has been strong, with continued sales and profit growth across the group.

Gambling software development firm Playtech was in focus after it said talks with TTB Partner were still ongoing and "progress continues to be made" but added that it was "conscious that TTB has been considering a possible offer for Playtech for 15 weeks".

Outside the FTSE 350, shares of THG surged after the online retailer said late on Thursday that it had rejected a £2.1bn takeover approach from Belerion Capital Group and King Street Capital Management and after property tycoon Nick Candy revealed that Candy Venture was weighing up a £1.4bn offer.

Market Movers

FTSE 100 (UKX) 7,384.19 1.12%
FTSE 250 (MCX) 19,804.17 0.58%
techMARK (TASX) 4,315.85 0.64%

FTSE 100 - Risers

Ashtead Group (AHT) 3,893.00p 3.10%
Pearson (PSON) 764.60p 2.60%
Prudential (PRU) 1,000.50p 2.38%
Legal & General Group (LGEN) 252.00p 2.15%
Anglo American (AAL) 3,538.00p 2.05%
HSBC Holdings (HSBA) 495.75p 2.03%
Rio Tinto (RIO) 5,454.00p 2.00%
Admiral Group (ADM) 2,189.00p 1.96%
BP (BP.) 420.75p 1.95%
Aveva Group (AVV) 2,176.00p 1.92%

FTSE 100 - Fallers

Standard Chartered (STAN) 586.40p -0.71%
Imperial Brands (IMB) 1,807.50p -0.63%
Pershing Square Holdings Ltd NPV (PSH) 2,425.00p -0.61%
JD Sports Fashion (JD.) 121.55p -0.53%
Fresnillo (FRES) 770.80p -0.44%
Compass Group (CPG) 1,683.50p -0.27%
B&M European Value Retail S.A. (DI) (BME) 427.90p -0.23%
Ocado Group (OCDO) 741.40p -0.22%
Experian (EXPN) 2,505.00p -0.04%
BT Group (BT.A) 179.55p -0.03%

FTSE 250 - Risers

Investec (INVP) 472.70p 3.03%
Hochschild Mining (HOC) 107.80p 2.76%
Smithson Investment Trust (SSON) 1,264.00p 2.60%
FirstGroup (FGP) 112.50p 2.27%
Mitchells & Butlers (MAB) 207.80p 2.26%
Capricorn Energy (CNE) 204.00p 2.26%
Darktrace (DARK) 347.30p 2.15%
National Express Group (NEX) 252.00p 2.11%
Future (FUTR) 1,942.00p 2.10%
Bellevue Healthcare Trust (Red) (BBH) 154.00p 1.99%

FTSE 250 - Fallers

888 Holdings (888) 183.70p -1.55%
Network International Holdings (NETW) 218.60p -1.00%
Oxford Biomedica (OXB) 498.50p -0.89%
Marshalls (MSLH) 523.50p -0.85%
Diversified Energy Company (DEC) 120.20p -0.66%
Hill & Smith Holdings (HILS) 1,302.00p -0.61%
Watches of Switzerland Group (WOSG) 912.00p -0.60%
TUI AG Reg Shs (DI) (TUI) 208.00p -0.57%
Beazley (BEZ) 470.80p -0.55%
Ultra Electronics Holdings (ULE) 3,300.00p -0.48%