London pre-open: Stocks to nudge up as investors mull retail sales

London stocks were set to nudge up at the open on Friday following heavy losses in the previous session, as investors digest the latest UK retail sales data.

The FTSE 100 was called to open eight points higher at 7,067.

CMC Markets analyst Michael Hewson said: "Today’s European market open looks set to be a slightly negative one as Asia markets continue the weakness of the last 24 hours with Japanese automakers getting clobbered on the back of Toyota’s decision to cut car production in September."

Figures out earlier from the Office for National Statistics showed retail sales unexpectedly fell in July as people spent less on groceries and more on going out.

Retail sales declined 2.5% on the month versus expectations for a 0.4% increase. Still, they were up 5.8% compared with their pre-pandemic levels in February 2020.

Jonathan Athow, deputy national statistician at the ONS, said: "Following the Euro 2020-related boost in June, retail sales fell in July to their lowest level since shops re-opened in April, but still remain well above pre-pandemic levels.

"Food sales fell back as further lifting of hospitality restrictions meant consumers had more opportunities to spend outside retail.

"Heavy rainfall at the start of July hit fuel sales, which dipped for the first time since February."

In corporate news, food and clothing chain Marks & Spencer said it expected annual profits to be at the top end of expectations as it reported a sharp rise in revenues during the summer.

Assuming no further Covid-related restrictions on trading, M&S forecast adjusted profit before tax for the year to be above the upper end of previous guidance of £300m - £350m.

Group revenue surged 29.1% in the 19 weeks to August 14 and was 4.4% higher than 2019 before the Covid-19 pandemic struck and forced the closure of the retailer’s stores.