London close: Stocks firmer after rise in retail sales

The FTSE 100 ended the session up 0.99% at 6,740.59, and the FTSE 250 was 0.98% firmer at 21,486.73.

Sterling was stronger as well, last gaining 0.4% on the dollar to $1.3789, and advancing 0.13% against the euro to €1.1689.

“A steady recovery for the FTSE 100 will come as welcome news for UK investors, and with the mid-cap FTSE 250 making even stronger gains there is reason to hope that the UK’s better performance on the vaccine front is continuing to bolster the attractiveness of UK assets,” said IG chief market analyst Chris Beauchamp.

“Overall today’s move looks more like a relaxation of concerns about the rise in yields, although with nonfarm payrolls on the calendar for next week there is a risk that this will return to haunt the new quarter just as it has the old.”

Figures from the Office for National Statistics earlier showed retail sales recovered partly in February, following a big fall at the start of the third national lockdown in January.

Retail sales rose 2.1% on the month in February, in line with consensus expectations and compared to an 8.2% slump the month before.

Still, sales were still down 3.7% compared to February last year, before the coronavirus pandemic hit, which compared to a 5.9% slide in January and expectations for a 3.5% decline.

The ONS said non-food stores provided the largest positive contribution to monthly growth, with increases of 16.2% and 16.1% in department stores and household goods stores respectively.

Clothing retailers reported the largest fall in sales volumes when compared to last February before the pandemic hit, down 50.4%.

The proportion spent online rose to a record 36.1% in February, compared with 35.2% in January and 20% in February 2020.

“Despite national restrictions, retail sales partially recovered from the hit they took in January,” said ONS deputy national statistician for economic statistics, Jonathan Athow.

“Food and department stores benefitted from essential retail remaining open with budget-end department stores seeing increased sales.”

Athow said household goods also fared well, with feedback suggesting spending on home improvement and outdoor products boosted sales as consumers prepared for an easing of lockdown restrictions.

“However, clothing stores continue to struggle with sales down more than half on their pre-pandemic level.”

In equity markets, miners were on the front foot as metals prices rose, with Glencore up 6.53%, Antofagasta rising 4.41%, Rio Tinto advancing 3.44%, and Anglo American 4.31% firmer.

Oil giants Shell and BP gushed 1.88% and 3.05% higher, respectively, as oil prices rose amid concerns that a ship blocking the Suez Canal could squeeze crude supplies.

Smiths Group leapt 6.92% after it increased its interim dividend and said it was confident about meeting expectations for annual results as profit fell in the first half.

Aviva managed gains of 0.3% after saying it had sold its Polish unit to Allianz for €2.5bn to focus on its strongest businesses in the UK, Ireland and Canada and cut debt.

Next was boosted 3.3% by an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets.

Kaz Minerals rallied 2.93% after Nova Resources lifted its offer for the company to 850p a share, valuing the copper miner at £4.1bn.

Oxford Instruments surged 11.61%, after it said revenue is expected to be marginally ahead of last year.

Market Movers

FTSE 100 (UKX) 6,740.59 0.99%
FTSE 250 (MCX) 21,486.73 0.98%
techMARK (TASX) 4,225.46 1.35%

FTSE 100 - Risers

Smiths Group (SMIN) 1,560.00p 6.92%
Glencore (GLEN) 285.70p 6.27%
Antofagasta (ANTO) 1,693.50p 4.47%
Anglo American (AAL) 2,847.00p 4.44%
Evraz (EVR) 556.80p 4.27%
Renishaw (RSW) 5,995.00p 3.81%
BHP Group (BHP) 2,097.00p 3.66%
Rio Tinto (RIO) 5,533.00p 3.44%
Next (NXT) 7,890.00p 3.30%
BP (BP.) 302.65p 3.05%

FTSE 100 - Fallers

Standard Life Aberdeen (SLA) 288.00p -1.50%
National Grid (NG.) 860.00p -1.49%
Bunzl (BNZL) 2,293.00p -1.42%
Intertek Group (ITRK) 5,584.00p -1.24%
Barratt Developments (BDEV) 770.60p -1.15%
Polymetal International (POLY) 1,411.00p -1.02%
Relx plc (REL) 1,804.50p -0.99%
St James's Place (STJ) 1,262.00p -0.83%
United Utilities Group (UU.) 907.40p -0.79%
Reckitt Benckiser Group (RB.) 6,372.00p -0.62%

FTSE 250 - Risers

Oxford Instruments (OXIG) 2,000.00p 11.61%
Cineworld Group (CINE) 102.95p 8.37%
Micro Focus International (MCRO) 525.40p 8.33%
Wood Group (John) (WG.) 289.70p 7.86%
Ferrexpo (FXPO) 375.00p 6.90%
Morgan Sindall Group (MGNS) 1,768.00p 5.87%
FirstGroup (FGP) 92.75p 5.40%
Marks & Spencer Group (MKS) 153.85p 3.71%
Clarkson (CKN) 2,700.00p 3.45%
Hill & Smith Holdings (HILS) 1,436.00p 3.31%

FTSE 250 - Fallers

Vietnam Enterprise Investments (DI) (VEIL) 575.00p -4.64%
Indivior (INDV) 122.30p -2.94%
Chemring Group (CHG) 262.50p -2.60%
Chrysalis Investments Limited NPV (CHRY) 199.50p -2.21%
C&C Group (CDI) (CCR) 279.50p -2.10%
TUI AG Reg Shs (DI) (TUI) 353.70p -2.02%
TBC Bank Group (TBCG) 1,030.00p -1.90%
Oxford Biomedica (OXB) 946.00p -1.77%
Euromoney Institutional Investor (ERM) 930.00p -1.69%
Baillie Gifford US Growth Trust (USA) 302.00p -1.63%