London midday: FTSE pares gains as retail sales slump
London stocks had pared some gains by midday on Wednesday, as data showed that retail sales slumped in June.
The FTSE 100 was up 0.2% at 8,260.82, off earlier highs, having taken its opening cue from a tech rally on Wall Street, which saw the Nasdaq end 1.3% higher.
Susannah Streeter head of money and markets at Hargreaves Lansdown, said: "An uptick in confidence has sent the FTSE 100 higher, after US tech staged a rebound, particularly the chipmaker Nvidia.
"Fears of a big imminent market wobble are now receding. However, there are still concerns hanging around about stubborn inflation, with a hotter than expected reading in Australia sending the ASX 200 in Sydney lower. Brent Crude has edged up slightly above $85 a barrel, amid continued geo-political concerns, even though there was an uptick in US crude stockpiles. This has raised questions about demand for energy across the vast economy given expectations higher interest rates are going to linger for longer."
On home shores, the latest Distributive Trades Survey from the Confederation of British Industry showed that retail sales fell in June, reversing May’s short-lived uplift.
Retail sales volumes in the year to June fell sharply, with a weighted net balance of -24. That compares to May’s balance of 8.
Sales, which were reported to be well below average for the time of year, were also forecast to continue falling in July, albeit at a notably slower rate, at -9.
Alpesh Paleja, interim deputy chief economist at the CBI, said: "Last month’s nascent recovery in sales proved to be short-lived, with retailers reporting a faster-than-anticipated decline this month.
"Unseasonably cold weather in [early] June may have played a role, but it’s notable that internet retail sales fell sharply too."
In equity markets, online electricals retailer AO World was up but off highs, as it posted a big jump in full-year profit, topping its own guidance range as its plan to pivot the business to focus on profit and cash generation bore fruit. In the year to the end of March 2024, adjusted pre-tax profit jumped 186% to £34.4m even as revenue dipped 9% to £1.04bn. AO World had guided to profit coming in at the top end of a range of £28m to £33m.
Future surged after a double upgrade to ‘buy’ at Jefferies, which hiked the price target to 1,280p from 635p.
Deliveroo shares sparked following a report that US meal delivery group Doordash flagged interest in a takeover of the UK company last month. Reuters cited sources as saying that San Francisco-based Doordash made the approach to Deliveroo, but talks ended after disagreement on valuation. It was understood there are no talks ongoing.
Insurance and pensions group Phoenix fell as it said it was looking to offload its SunLife business after deciding it was no longer core to operations. Phoenix said it had received a "a number of initial expressions of interest from third parties", but warned there could be no certainty at this stage that a disposal will occur.
Asset manager Liontrust slumped as it said it swung to a small loss in the year ended 31 March after seeing net outflows of more than £6bn due to an adverse trading environment.
Market Movers
FTSE 100 (UKX) 8,260.82 0.16%
FTSE 250 (MCX) 20,369.63 0.03%
techMARK (TASX) 4,779.22 -0.02%
FTSE 100 - Risers
Rentokil Initial (RTO) 465.80p 1.61%
Rio Tinto (RIO) 5,315.00p 1.45%
Convatec Group (CTEC) 234.60p 1.38%
Fresnillo (FRES) 567.00p 1.34%
Associated British Foods (ABF) 2,531.00p 1.32%
Smith & Nephew (SN.) 991.60p 1.27%
Rolls-Royce Holdings (RR.) 471.90p 1.27%
Centrica (CNA) 137.40p 1.07%
Glencore (GLEN) 459.05p 1.00%
Weir Group (WEIR) 2,010.00p 0.95%
FTSE 100 - Fallers
easyJet (EZJ) 453.30p -2.22%
Flutter Entertainment (DI) (FLTR) 14,560.00p -1.62%
Phoenix Group Holdings (PHNX) 518.00p -1.61%
Vodafone Group (VOD) 69.72p -1.33%
Smurfit Kappa Group (CDI) (SKG) 3,568.00p -1.33%
International Consolidated Airlines Group SA (CDI) (IAG) 166.10p -1.25%
Admiral Group (ADM) 2,600.00p -1.03%
Mondi (MNDI) 1,481.00p -0.94%
Legal & General Group (LGEN) 227.30p -0.83%
London Stock Exchange Group (LSEG) 9,526.00p -0.75%
FTSE 250 - Risers
Future (FUTR) 1,075.00p 7.18%
Rotork (ROR) 336.80p 3.44%
Witan Inv Trust (WTAN) 268.50p 2.87%
Apax Global Alpha Limited (APAX) 158.00p 2.86%
Renewi (RWI) 691.00p 2.52%
AO World (AO.) 115.60p 2.30%
Centamin (DI) (CEY) 119.60p 1.96%
Carnival (CCL) 1,275.50p 1.96%
Asia Dragon Trust (DGN) 412.00p 1.73%
Me Group International (MEGP) 172.80p 1.65%
FTSE 250 - Fallers
Alpha Group International (ALPH) 2,275.00p -4.01%
Trustpilot Group (TRST) 223.50p -2.83%
SDCL Energy Efficiency Income Trust (SEIT) 65.90p -2.80%
SSP Group (SSPG) 151.80p -2.00%
Paragon Banking Group (PAG) 742.00p -1.92%
IP Group (IPO) 42.50p -1.62%
Pagegroup (PAGE) 445.00p -1.55%
Lancashire Holdings Limited (LRE) 596.00p -1.49%
Aston Martin Lagonda Global Holdings (AML) 152.50p -1.49%
Drax Group (DRX) 504.00p -1.47%