London midday: Stocks extend gains; retail sales, consumer confidence in focus

(Sharecast News) - London stocks had extended gains by midday on Friday, having taken their opening cue from positive US and Asian sessions, as investors digested the latest retail sales and consumer confidence data. The FTSE 100 was up 1.3% at 7,110.77.

Figures released earlier by the Office for National Statistics showed that retail sales fell in May as households cut spending on food amid the cost-of-living crisis.

Retail sales were 0.5% lower on the month following a 0.4% increase in April, which was revised down from 1.4% growth. This was mainly due to a 1.6% decline in food store sales and leaves sales volumes 2.6% above their pre-Covid February 2020 level. Analysts had been expecting a 0.7% month-on-month fall.

Heather Bovill, deputy director for surveys and economic indicators at the ONS, said: "Retail sales fell in May driven by a decline in food sales.

"Feedback from supermarkets suggested customers were spending less on their food shop, because of the rising cost of living."

Capital Economics said: "The fall in retail sales in May suggests that the decline in households' real incomes from surging inflation is starting to hit consumer spending a bit harder. Even so, consumer spending appears to be softening rather than sinking, so we doubt that this will deter the Bank of England from hiking interest rates further."

The figures came as the latest survey from GfK showed that consumer confidence declined to an historic low in June as soaring inflation and the weakening economic outlook weighed heavily.

The GfK Consumer Confidence Barometer's overall index was -41 in June, down on May's -40 and April's -38. The lowest score recorded during the pandemic was -36, in the first lockdown.

Earlier this week, data from the ONS showed that consumer price inflation rose to a fresh 40-year high of 9.1% in May as energy and food prices continued to surge. This was up from 9% in April and marked the highest level since March 1982.

In equity markets, Ultra Electronics surged as the £2.6bn takeover of the British defence manufacturer by a US private equity firm looked set to be waved on by the UK government after the Department for Business said it was minded to accept the deal.

Elsewhere, Barclays was in focus after it agreed to buy UK specialist mortgage lender Kensington Mortgage Company as part of a deal valued at around £2.3bn.

On the downside, miners lost ground as copper prices slid, with Glencore, Rio Tinto, Antofagasta and Anglo American all lower.

Travel firm Tui was also in the red after it announced that chief executive Fritz Joussen was stepping down after 10 years in the job.

Energean tumbled after top shareholder Growthy Holdings, which is owned by the company's chief executive Mathios Rigas, sold 5m shares at £11.06 each in an accelerated bookbuild.

Market Movers

FTSE 100 (UKX) 7,110.77 1.29% FTSE 250 (MCX) 18,941.40 1.33% techMARK (TASX) 4,289.10 1.80%

FTSE 100 - Risers

Croda International (CRDA) 6,240.00p 4.59% Dechra Pharmaceuticals (DPH) 3,370.00p 3.76% RS Group (RS1) 844.50p 3.68% Halma (HLMA) 1,982.50p 3.61% Pershing Square Holdings Ltd NPV (PSH) 2,445.00p 3.60% Relx plc (REL) 2,199.00p 3.53% Burberry Group (BRBY) 1,684.50p 3.15% Spirax-Sarco Engineering (SPX) 9,474.00p 3.14% SEGRO (SGRO) 1,024.00p 3.12% Hikma Pharmaceuticals (HIK) 1,592.50p 2.97%

FTSE 100 - Fallers

Rolls-Royce Holdings (RR.) 80.13p -2.10% Endeavour Mining (EDV) 1,714.00p -1.89% Glencore (GLEN) 437.80p -1.13% Rio Tinto (RIO) 4,867.00p -0.88% Harbour Energy (HBR) 341.90p -0.75% Smiths Group (SMIN) 1,370.50p -0.69% Berkeley Group Holdings (The) (BKG) 3,670.00p -0.68% Antofagasta (ANTO) 1,164.50p -0.60% Next (NXT) 5,852.00p -0.44% Anglo American (AAL) 3,051.00p -0.33%

FTSE 250 - Risers

Ultra Electronics Holdings (ULE) 3,454.00p 12.51% Auction Technology Group (ATG) 964.00p 5.36% Polymetal International (POLY) 210.00p 5.00% Abrdn Private Equity Opportunities Trust (APEO) 450.00p 4.65% Future (FUTR) 1,777.00p 4.04% Darktrace (DARK) 333.10p 3.96% Liontrust Asset Management (LIO) 959.00p 3.79% JPMorgan Japanese Inv Trust (JFJ) 428.00p 3.76% Urban Logistics Reit (SHED) 172.00p 3.61% NB Private Equity Partners Ltd. (NBPE) 1,445.00p 3.58%

FTSE 250 - Fallers

Energean (ENOG) 1,106.00p -5.63% ASOS (ASC) 862.00p -2.87% TUI AG Reg Shs (DI) (TUI) 147.55p -2.80% Diversified Energy Company (DEC) 110.50p -2.64% BlackRock World Mining Trust (BRWM) 575.00p -2.21% easyJet (EZJ) 390.30p -2.03% Ferrexpo (FXPO) 140.40p -1.82% Baltic Classifieds Group (BCG) 145.00p -1.36% Marks & Spencer Group (MKS) 137.40p -1.19% TBC Bank Group (TBCG) 1,286.00p -1.08%