London pre-open: Stocks to fall after weak US close; retail sales in focus
London stocks were set to fall at the open on Friday after weakness on Wall Street, as investors digest the latest UK retail sales data.
The FTSE 100 was called to open 25 points lower at 7,235.
CMC Markets analyst Michael Hewson said: "European markets saw a strong session yesterday, helped by a Federal Reserve who soothed market concerns that they had taken their eyes off the ball when it comes to inflation risks.
"The surprise decision by the Bank of England to raise interest rates also built on that narrative, and while the timing was curious, it was still welcomed by a market that had started to doubt the central bank's credibility, as well as its ability in recognising rising inflation risks.
"US markets also started the day on the front foot, however as the day progressed a sell-off in the Nasdaq started to weigh on the wider market, as the prospect of slightly higher rates chipped away at the attractiveness of some of the more richly valued sectors, dragging the S&P500 and Dow along with it.
"This late US weakness looks set to weigh on today’s European open in a week that has seen a lot of chop but not much in the way of direction. Asia markets also slipped back as a result of the weakness in US markets, while the Bank of Japan left monetary policy unchanged."
Data released earlier by the Office for National Statistics showed that UK retail sales rose more than expected in November.
Retail sales were up 1.4% on the month 4.7% on the year, versus expectations for a 0.8% and 4.2% increase, respectively.
ONS statistician Heather Bovill said: "Retail sales picked up in November, boosted by strong Black Friday and pre-Christmas trading. Clothing stores fared particularly well and have exceeded their pre-pandemic level for the first time."
In corporate news, Johnson Matthey has sold its health business to Altaris Capital Partners for £325m, the company said.
It will keep around 30% of the division and said it expects to realise "significant additional future value". The sale is expected to give rise to an accounting loss on disposal/impairment of around £200m.
Healthcare facilities investor Primary Health Properties has agreed to acquire a medical and office facility in the North East of England for £10m.
Primary Health said the acquisition, which will complete following a comprehensive refurbishment of the premises, will increase its portfolio to a total of 521 assets, with a contracted rent roll of over £140.0m.