London close: Stocks finish weaker as Eunice hammers Britain
London stocks closed weaker after the capital took a physical battering from Storm Eunice on Friday, as investors mulled better-than-expected UK retail sales data, while Russia-Ukraine tensions remained in focus.
The FTSE 100 ended the session down 0.32% at 7,513.62, and the FTSE 250 was 0.9% lower at 21,362.60.
Sterling was in a mixed state, meanwhile, last trading 0.23% weaker against the dollar at $1.3585, while it strengthened 0.08% on the euro to change hands at €1.1995.
“European markets initially had a more positive tone today, ahead of the weekend as the negativity from yesterday started to be replaced by cautious optimism that there will be no further negative developments ahead of next week’s meeting between US Secretary of State Anthony Blinken, and Russian Foreign Minister Sergey Lavrov,” said CMC Markets chief market analyst Michael Hewson.
“Unfortunately, the early gains soon disappeared on reports that separatist leaders in eastern Ukraine were evacuating their citizens in the region into Russia for their own safety.”
Despite the attempts to rebound, Hewson said it was still a negative week for the top-flight index, with markets in Europe also finishing a choppy five days close to where they were a fortnight ago.
“The main drags on the FTSE 100 have been banks, and the oil and gas sector, as the first weekly decline in Brent crude this year weighs on the sector.”
In economic news, official figures showed UK retail sales bouncing back in January as shoppers hit the high streets again.
According to the Office for National Statistics, sales rose 1.9% following a 4% slump in December, when the Omicron variant of Covid-19 took its toll.
That was ahead of analyst expectations for a 1% increase, and marked the strongest monthly jump since lockdown ended last Spring.
It left sales volumes 3.6% above their pre-pandemic levels.
The data showed that non-food store sales rose 3.4% in January as home improvement sales volumes picked up, with increased sales in household goods and garden centres.
Automotive fuel sales, meanwhile, were up 4.1% following a 5% decline in December, when home working and lower retail footfall reduced travel.
“After a sluggish December where the omicron wave had a significant impact, retail sales rebounded in January with their biggest monthly rise since the shops reopened last spring,” said Darren Morgan, director of economic statistics at the ONS.
“It was a good month for garden centres, department and household goods stores, with particularly strong trading for furniture and lighting.
“Food sales fell below their pre-pandemic level for the first time, though, as more people returned to eating out and there was also anecdotal evidence suggesting higher demand for takeaways and meal-subscription kits.”
Data released earlier this week by the ONS showed that UK inflation hit 5.5% in January as consumer prices reached their highest level since 1992.
That was up from 5.4% in December and compared to forecasts for an unchanged figure.
Earlier this month, the Bank of England said it expected inflation to peak at around 7.25% in April, when a 54% rise in regulated household energy bills will take effect.
Elsewhere, the escalating situation between Russia and Ukraine remained in focus as investors hoped for a diplomatic resolution.
US Secretary of State Antony Blinken agreed to a meeting with Russia's foreign minister late next week, provided Russia did not invade Ukraine, the US State Department said overnight.
Russia was maintaining that it was withdrawing soldiers from Ukraine’s borders, but Washington called the claim false overnight, and accused Moscow of increasing troop numbers on the ground.
Tensions were heightened after the shelling of a village in eastern Ukraine by pro-Russian forces in the Donbas region on Thursday.
“While we're still being warned that a Russian invasion is highly likely, the meeting does offer hope that nothing will happen before then which is bringing some stability in the markets,” said Oanda market analyst Craig Erlam.
In equity markets, TBC Bank Group managed gains of 0.94% after it said annual profit more than doubled in 2021, driven by strong income and a recovery in the Georgian economy.
Reckitt Benckiser was a high riser for the second day running, adding 1.97% to its Thursday gains, which came after the consumer goods giant said it suffered an £804m annual operating loss caused by the sale of its Chinese infant formula business, but was upbeat about growth.
Standard Chartered was also in the black, rising 3.8% after its slump a day earlier, following the Anglo-Asian bank’s annual results missing estimates.
Gold miners Endeavour Mining and Centamin shone by 2.99% and 0.51%, respectively, with Oanda’s Craig Erlam pointing out that gold was surging in risk-averse trade, topping $1,900 per ounce overnight for the first time in eight months.
“The yellow metal is paring gains today, off around four-tenths of one percent, but remains well supported given the level of uncertainty and anxiety that exists,” Erlam said earlier.
“It has really benefited from its role as a safe haven and inflation hedge, blowing away any suggestion that gold no longer serves such a purpose or that it's been in any way replaced.
“If troops cross the border, we could see it surge once more and potentially eye levels not seen since late 2020.”
Elsewhere, online trading platform Plus500 advanced 1.62%, having announced an additional share buyback programme and posting a decline in full-year profit and revenue earlier in the week, though it hailed a positive start to the new year.
On the downside, NatWest Group was 2.41% weaker despite saying it swung to a full-year profit as it released more than £1.2bn in cash set aside for loan defaults during the Covid pandemic, adding that it expected to achieve a return on tangible equity "comfortably" above 10% in 2023.
The bank, majority owned by the UK taxpayer, posted a full-year attributable profit of £2.95bn compared with a £753m loss a year earlier.
Fourth-quarter earnings came in at £434m against a loss of £109m in 2020, but lower than the £674m profit in the prior three months
Real estate investment trust Segro reversed earlier gains to close down 0.94% after it hiked its full-year dividend and described 2021 as "a highly successful year", with adjusted pre-tax profits and net asset value improving amid record levels of rental growth.
Online supermarket Ocado tumbled 4.45% a day after announcing that it and France’s Groupe Casino would develop logistics warehouses for French retailers, signing a deal to extend their current partnership.
Market Movers
FTSE 100 (UKX) 7,513.62 -0.32%
FTSE 250 (MCX) 21,362.60 -0.90%
techMARK (TASX) 4,318.06 -1.18%
FTSE 100 - Risers
Standard Chartered (STAN) 579.20p 3.80%
Antofagasta (ANTO) 1,404.00p 2.26%
Reckitt Benckiser Group (RKT) 6,253.00p 1.97%
Burberry Group (BRBY) 2,026.00p 1.96%
Airtel Africa (AAF) 153.90p 1.65%
Unilever (ULVR) 3,857.50p 1.53%
Imperial Brands (IMB) 1,779.00p 1.45%
B&M European Value Retail S.A. (DI) (BME) 583.60p 1.35%
Land Securities Group (LAND) 799.80p 1.31%
Kingfisher (KGF) 323.00p 1.29%
FTSE 100 - Fallers
Evraz (EVR) 283.20p -7.24%
Aveva Group (AVV) 2,519.00p -6.36%
Ocado Group (OCDO) 1,294.50p -4.45%
Flutter Entertainment (CDI) (FLTR) 10,565.00p -4.40%
Scottish Mortgage Inv Trust (SMT) 1,015.00p -4.15%
Dechra Pharmaceuticals (DPH) 3,778.00p -3.22%
Entain (ENT) 1,649.00p -2.88%
International Consolidated Airlines Group SA (CDI) (IAG) 161.52p -2.87%
Ashtead Group (AHT) 4,778.00p -2.87%
Croda International (CRDA) 7,088.00p -2.67%
FTSE 250 - Risers
Endeavour Mining (EDV) 1,890.00p 2.99%
C&C Group (CDI) (CCR) 219.00p 2.34%
Grafton Group Ut (CDI) (GFTU) 1,071.00p 2.09%
Bodycote (BOY) 762.50p 1.93%
Plus500 Ltd (DI) (PLUS) 1,548.00p 1.62%
4Imprint Group (FOUR) 2,680.00p 1.50%
Indivior (INDV) 272.20p 1.42%
Premier Foods (PFD) 114.60p 1.41%
Darktrace (DARK) 324.00p 1.31%
Pantheon International (PIN) 317.00p 1.28%
FTSE 250 - Fallers
Hipgnosis Songs Fund Limited C Shs NPV (SONC) 112.50p -100.00%
Future (FUTR) 2,558.00p -5.75%
Trustpilot Group (TRST) 143.50p -5.65%
TUI AG Reg Shs (DI) (TUI) 271.50p -5.33%
PureTech Health (PRTC) 230.50p -4.91%
Syncona Limited NPV (SYNC) 189.00p -4.55%
Edinburgh Worldwide Inv Trust (EWI) 223.50p -4.49%
Allianz Technology Trust (ATT) 277.00p -4.16%
Bridgepoint Group (Reg S) (BPT) 362.50p -4.10%
Genus (GNS) 3,244.00p -4.08%