London midday: Stocks a touch higher after retail sales
London stocks were still a little firmer by midday on Friday as investors mulled better-than-expected UK retail sales data, with Russia-Ukraine tensions still in focus.
The FTSE 100 was up 0.2% at 7,552.60 after data from the Office for National Statistics showed that retail sales bounced back in January as shoppers hit the high street again.
Sales rose 1.9% following a 4% slump December, when Omicron took its toll. This 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 stores sales rose 3.4% in January as home improvement sales volumes picked up, with increased sales in household goods and garden centres. Meanwhile, automotive fuel sales were up 4.1% following a 5% decline in December, when home working and lower retail footfall reduced travel.
Adam Hoyes, assistant economist at Capital Economics, said the solid rise in retail sales volumes in January adds to signs that the Omicron-induced hit to activity was smaller and shorter-lived than previously thought. "Even so, the cost of living crisis means the outlook for retailers is anything but bright," he said.
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. This 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.
Despite the positive tone, the escalating situation between Russia and Ukraine was keeping a cap on gains 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 does not invade Ukraine, the US State Department said overnight.
Russia maintains it is withdrawing soldiers from Ukraine’s borders, but Washington on Thursday said the claim was false 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.
Oanda market analyst Craig Erlam said: "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.
"In the absence of the meeting, it could have been another turbulent day in the markets and we could still see some risk aversion creeping in as we near the close, given how quickly these situations can change."
In equity markets, real estate investment trust Segro rallied after it hiked its full-year dividend and said 2021 had been "a highly successful year", with adjusted pre-tax profits and net asset value improving amid record levels of rental growth.
TBC Bank gained after it said annual profit more than doubled in 2021, driven by strong income and a recovery in the Georgian economy.
On the downside, NatWest Bank was 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 and said 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
Market Movers
FTSE 100 (UKX) 7,552.60 0.20%
FTSE 250 (MCX) 21,559.48 0.01%
techMARK (TASX) 4,362.33 -0.17%
FTSE 100 - Risers
Reckitt Benckiser Group (RKT) 6,330.00p 2.89%
Standard Chartered (STAN) 567.80p 1.76%
Antofagasta (ANTO) 1,395.50p 1.64%
Burberry Group (BRBY) 2,024.00p 1.50%
SSE (SSE) 1,627.00p 1.34%
Rolls-Royce Holdings (RR.) 119.56p 1.30%
Abrdn (ABDN) 234.60p 1.25%
SEGRO (SGRO) 1,293.00p 1.21%
Unilever (ULVR) 3,845.00p 1.20%
Lloyds Banking Group (LLOY) 51.86p 1.11%
FTSE 100 - Fallers
Ocado Group (OCDO) 1,320.50p -2.94%
NATWEST GROUP PLC ORD 100P (NWG) 234.30p -2.50%
Aveva Group (AVV) 2,623.00p -2.49%
Scottish Mortgage Inv Trust (SMT) 1,034.00p -2.36%
Ashtead Group (AHT) 4,836.00p -1.69%
Dechra Pharmaceuticals (DPH) 3,848.00p -1.59%
Rentokil Initial (RTO) 493.90p -1.16%
Sage Group (SGE) 678.20p -1.02%
Spirax-Sarco Engineering (SPX) 11,770.00p -0.93%
Evraz (EVR) 302.60p -0.88%
FTSE 250 - Risers
Plus500 Ltd (DI) (PLUS) 1,564.00p 3.58%
Moneysupermarket.com Group (MONY) 197.60p 2.76%
Bodycote (BOY) 773.00p 2.72%
Darktrace (DARK) 328.20p 2.63%
Pantheon International (PIN) 321.00p 2.56%
Man Group (EMG) 195.55p 2.36%
C&C Group (CDI) (CCR) 218.80p 2.24%
Telecom Plus (TEP) 1,490.00p 1.92%
Centamin (DI) (CEY) 96.42p 1.86%
Centrica (CNA) 78.84p 1.70%
FTSE 250 - Fallers
Petershill Partners (PHLL) 190.40p -4.61%
Baillie Gifford US Growth Trust (USA) 220.00p -2.65%
Cineworld Group (CINE) 38.67p -2.47%
Trainline (TRN) 220.00p -2.22%
Baltic Classifieds Group (BCG) 160.50p -2.13%
Helios Towers (HTWS) 147.20p -2.13%
Trustpilot Group (TRST) 148.90p -2.10%
HarbourVest Global Private Equity Limited A Shs (HVPE) 2,620.00p -2.06%
TUI AG Reg Shs (DI) (TUI) 281.00p -2.02%
Baillie Gifford Japan Trust (BGFD) 837.00p -1.99%