London close: Stocks end week in the red as investors play it safe

(Sharecast News) - London stocks fell further on Friday, with sentiment dented by ongoing concerns about the situation in the Middle East, disappointing retail sales and consumer confidence data at home, and rising bond yields. The FTSE 100 finished 1.3% lower at 7,402.14, while the second-tier index had come off by 1.05% to 17,032.73.

"A hawkish Fed, surging US yields and the fear of an escalation in the Middle East have pushed global stock indices into negative territory for the week," said senior market analyst Axel Rudolph.

"An over 10% surge in the gold price in the past couple of weeks and rise in the price of oil to just below $90 for TWI is not helping inflationary pressures either with Fed Chair Jerome Powell yesterday re-iterating that US inflation remains too high and needs to come down."

On home shores, data released earlier by the Office for National Statistics showed that retail sales fell much more than expected in September as unseasonably warm weather dented clothing sales.

Sales were down 0.9% on the month following a 0.4% increase in August, versus consensus expectations for a 0.2% decline. On the year, sales fell 1% in September following a 1.3% drop a month earlier.

The data showed that sales at both clothing stores and department stores fell 1.6%. Meanwhile, non-store retailing sales declined 2.2% in September, with retailers reporting a hit from the unseasonably warm weather and the ongoing cost-of-living crisis.

ONS chief economist Grant Fitzner said: "Retail sales fell notably in September with retailers telling us that cost-of-living pressures are influencing consumers, particularly for sales of non-essential goods.

"It was a poor month for clothing stores as the warm autumnal conditions reduced sales of colder weather gear.

"However, September's unseasonable warmth did help drive up food sales a little, and fuel sales rebounded from last month's fall."

Investors were also digesting an uninspiring survey from GfK, which showed that the confidence index fell nine points to -30 in October, reversing two months of improving scores, as growing economic uncertainty weighed heavily.

Within that, the steepest drop was seen in the major purchase index, which tumbled 14 points to -34.

Expectations for personal finances for the next 12 months fell by six points to -8, while expectations for the general economic situation slipped eight points to -32.

Joe Staton, client strategy director at GfK, said: "This sharp fall underlines that the cost-of living-crisis, and simply not having enough money to make ends meet, are still exerting acute pressure for many consumers."

Separate figures from the ONS showed that government borrowing unexpectedly fell last month, but still managed to register the sixth-highest level since records began.

Corporate news was thin on the ground, but InterContinental Hotels Group fell after it reported a big slowdown in RevPAR - a key performance measure used in the hospitality industry - in the third quarter as growth softened across all regions. However, the group said it still expects a "very strong financial performance" this year.

HSBC was knocked lower by a downgrade to 'market perform' at KBW.

Outside the FTSE 350, ProCook shares tumbled after the kitchenware retailer posted a decline in second-quarter revenue and sounded a cautious note on its outlook, noting that trading in September and into early October was "markedly softer".

On the upside, gold producer Endeavour Mining was the top gainer on the FTSE 100 as gold prices got a boost from a flight to safety.

Market Movers

FTSE 100 (UKX) 7,402.14 -1.30% FTSE 250 (MCX) 17,032.73 -1.05% techMARK (TASX) 4,025.22 -0.60%

FTSE 100 - Risers

Endeavour Mining (EDV) 1,760.00p 4.39% Convatec Group (CTEC) 203.00p 3.47% BAE Systems (BA.) 1,057.00p 2.02% Unite Group (UTG) 874.50p 1.86% Hargreaves Lansdown (HL.) 700.00p 1.13% Fresnillo (FRES) 551.60p 0.95% Mondi (MNDI) 1,263.50p 0.92% United Utilities Group (UU.) 1,025.00p 0.89% GSK (GSK) 1,462.00p 0.74% Frasers Group (FRAS) 789.00p 0.38%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 5,888.00p -4.48% Anglo American (AAL) 2,061.00p -4.41% Rentokil Initial (RTO) 464.20p -4.07% HSBC Holdings (HSBA) 615.90p -3.95% Sage Group (SGE) 951.00p -3.73% Smurfit Kappa Group (CDI) (SKG) 2,576.00p -3.45% Prudential (PRU) 830.20p -3.42% IMI (IMI) 1,465.00p -3.30% Glencore (GLEN) 435.40p -3.28% Rolls-Royce Holdings (RR.) 198.95p -3.23%

FTSE 250 - Risers

Mobico Group (MCG) 61.30p 8.50% 888 Holdings (DI) (888) 85.35p 4.53% IP Group (IPO) 49.45p 3.56% C&C Group (CDI) (CCR) 141.60p 3.36% Hipgnosis Songs Fund Limited NPV (SONG) 77.50p 1.97% W.A.G Payment Solutions (WPS) 95.00p 1.93% PureTech Health (PRTC) 167.40p 1.82% Genus (GNS) 2,240.00p 1.82% Petershill Partners (PHLL) 149.00p 1.78% Close Brothers Group (CBG) 773.00p 1.64%

FTSE 250 - Fallers

Me Group International (MEGP) 137.60p -7.65% Energean (ENOG) 868.50p -6.36% Baltic Classifieds Group (BCG) 192.40p -5.69% Ceres Power Holdings (CWR) 206.00p -5.68% Carnival (CCL) 811.60p -4.52% Apax Global Alpha Limited (APAX) 159.40p -4.44% Wood Group (John) (WG.) 138.60p -4.22% HGCapital Trust (HGT) 368.50p -3.66% Foresight Group Holdings Limited NPV (FSG) 348.00p -3.60% Pantheon International (PIN) 291.50p -3.48%