London open: FTSE nudges up as investors mull retail sales

(Sharecast News) - London stocks nudged higher in early trade on Friday as investors mulled the latest retail sales data. At 0825 GMT, the FTSE 100 was up 0.1% at 7,891.80, having gained sharply on Thursday.

Investors were mulling comments from Bank of England governor Andrew Bailey, who hinted in an interview with the Financial Times that rate cuts are on the way.

Bailey said rate cuts will be "in play" at future Monetary Policy Committee meetings.

"It's like the Sherlock Holmes dog that doesn't bark. If the second-round effects don't come through, that's good because monetary policy has done its job," he told the FT. "We have an increasingly positive story to tell on that."

On the macro front, data released earlier by the Office for National Statistics showed that retail sales were flat in February following 3.6% growth the month before. This was ahead of expectations for a 0.4% decline.

January's increase was revised up from 3.4%.

The ONS said clothing and department store sales rose because of new collections but this was offset by falls in food stores and fuel retailers. Online sales rose, particularly at clothing retailers, as wet weather affected footfall at bricks and mortar stores.

On an annual basis, sales were down 0.4% in February, and were down 1.3% from their pre- pandemic level in February 2020.

Elsewhere, a survey from GfK revealed that consumer confidence stalled in March.

The latest consumer confidence index from GfK was -21, unchanged on February, when it fell two points. It is, however, an improvement on March 2023, when the index was -36.

Within that, expectations for personal finances over the next 12 months rose two points from 0 in February.

The forward-looking economic situation measure was also higher, albeit by just one point, at -23.

In contrast, the major purchase index shed two points to -27.

Joe Staton, client strategy director at GfK, said: "Consumer confidence stalled in March.

"The improved personal finance measure is encouraging, because it's the first positive and the highest score since December 2021.

"But is there a note of worry this month? Look back to last year and it's clear the improvements in consumer confidence seem most months since January 2023 have vanished.

"Are we temporarily on pause, or are consumers about to press reverse? In the run-up to the general election, these are important questions for the future health of the economy."

In equity markets, Phoenix Group rallied on the back of well-received full-year results.

On the downside, JD Sports slid as Nike fell after warning that sales will take a hit this year as it works to realign merchandise to better match what shoppers are after.

St James's Place was knocked lower after RBC Capital Markets downgraded the shares to 'sector perform' from 'outperform' and slashed the price target to 500p from 950p, saying that "uncertainty reigns".

Pub chain Wetherspoons tumbled even as it said trading continued to improve from the impact of the Covid pandemic, with like-for-like sales up 5.8% in the seven weeks to March 17 after a sharp jump in first-half pre-tax profit.

Earnings for the 26 weeks to January 28 rose to £36m from £4.6m a year earlier. Revenue surged 8% to £991m.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: "Pub Chain J D Wetherspoon's half year results tell a story of an impressive recovery. But the strong operating profit growth reflects the low-base to which this set of numbers were compared to. At under 7%, margins are still pretty thin and there was little in the statement to help see where an improvement might come from. The Group's been steadily reducing and optimising its footprint and has a good record of outperforming its peers.

"A lot of capacity has come out of the market and the hint that there might be potential of about 1,000 pubs compared to a current total of 814, could see the estate start to grow again. That may see the return of dividends kicked further down the road. Location is key and recent openings include the Stargazer at the old Millenium Dome in Greenwich and the Star Light at Heathrow Airport.

"Overall, returning the estate to growth could be a welcome development. But there's only so much you can grow if pub numbers remain static, and for now like-for-like growth has taken a step down. 5.8% isn't awful but if it stays at this level for the rest of the year the market's likely to be disappointed."

Elsewhere, Darktrace tanked after KKR Dark Aggregator - a technology growth fund advised by US private equity firm KKR - sold 19.4m shares in the cybersecurity firm in a placing at 425p each.

Vodafone was in focus after the Competition and Markets Authority warned that it and Three will need to find ways to assuage its competition concerns and show that their planned $19bn merger would not leave consumers worse off or face a full investigation.

Market Movers

FTSE 100 (UKX) 7,891.80 0.12% FTSE 250 (MCX) 19,744.23 0.01% techMARK (TASX) 4,512.42 0.23%

FTSE 100 - Risers

Phoenix Group Holdings (PHNX) 514.20p 5.33% Smiths Group (SMIN) 1,675.50p 1.39% Flutter Entertainment (DI) (FLTR) 17,275.00p 0.93% Pershing Square Holdings Ltd NPV (PSH) 4,110.00p 0.93% Hikma Pharmaceuticals (HIK) 1,890.00p 0.88% Admiral Group (ADM) 2,857.00p 0.85% Coca-Cola HBC AG (CDI) (CCH) 2,488.00p 0.81% Haleon (HLN) 326.55p 0.79% Unite Group (UTG) 976.00p 0.77% IMI (IMI) 1,835.00p 0.71%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 112.20p -4.18% St James's Place (STJ) 453.20p -1.80% Ocado Group (OCDO) 471.10p -1.17% Anglo American (AAL) 1,905.00p -0.98% Glencore (GLEN) 423.90p -0.96% Fresnillo (FRES) 446.50p -0.78% Prudential (PRU) 753.80p -0.69% Mondi (MNDI) 1,358.00p -0.62% Barclays (BARC) 180.80p -0.57% Barratt Developments (BDEV) 476.30p -0.56%

FTSE 250 - Risers

Urban Logistics Reit (SHED) 120.00p 2.56% Balfour Beatty (BBY) 387.40p 2.43% Serco Group (SRP) 191.30p 2.41% Watches of Switzerland Group (WOSG) 351.80p 2.39% Derwent London (DLN) 2,204.00p 2.32% Dunelm Group (DNLM) 1,096.00p 2.24% Babcock International Group (BAB) 529.00p 2.12% Assura (AGR) 42.40p 1.97% Bytes Technology Group (BYIT) 524.50p 1.75% Target Healthcare Reit Ltd (THRL) 83.00p 1.47%

FTSE 250 - Fallers

Centamin (DI) (CEY) 106.60p -3.09% Genus (GNS) 1,778.00p -2.79% Quilter (QLT) 105.00p -2.14% Senior (SNR) 174.80p -1.91% Pennon Group (PNN) 651.50p -1.73% PZ Cussons (PZC) 86.00p -1.71% Crest Nicholson Holdings (CRST) 194.00p -1.52% Bridgepoint Group (Reg S) (BPT) 267.60p -1.47% OSB Group (OSB) 375.80p -1.47% Blackrock Throgmorton Trust (THRG) 579.00p -1.36%