London pre-open: Stocks seen flat as investors mull retail sales

(Sharecast News) - London stocks were set for a flat open on Friday as investors mulled the latest retail sales data and consumer confidence reading. The FTSE 100 was called to open unchanged at 8272.

It's worth noting that Friday is 'triple witching day'. Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "About $5.5 trillion index futures, options, stock options and ETFs will expire at the same time.

"Given that we are at psychologically crucial, irrationally high, and mathematically overstretched levels, we could see surprise turns and twists in positioning."

On the macro front, figures released earlier by the Office for National Statistics showed that retail sales rose 2.9% in May, versus expectations for a 1.5% jump. This followed a 1.8% decline in April, which was revised from a 2.3% fall previously reported.

The ONS said sales volumes rose across most sectors, with clothing retailers and furniture stores rebounding following poor weather in April.

The data showed that non-food store sales volumes - the total of department, clothing, household, and other non-food stores - rose 3.5% in May. This was the largest monthly rise since April 2021, and followed a 3% fall in April.

On the year, retail sales were up 1.3% in May and were 0.5% below their pre- pandemic level in February 2020.

Elsewhere, a survey showed UK consumer confidence strengthened in June as hopes for the economic recovery gained ground.

The latest UK consumer confidence index from GfK was -14, up three points on May and well above June 2023, when it was -24.

Within that, confidence in the economic situation over the next year jumped six points to -11.

Respondents also adopted a more positive overview of the economy over the last 12 months, with the measure ahead seven points at -32.

The forward-looking personal financial situation measure dipped three points, however, to 4. The major purchase index, meanwhile, rose three points to -23.

Joe Staton, client strategy director at GfK, said: "While June's reading of -14 is the third month in a row that confidence has increased, the headline score remains negative owing to the difficulty so many have experienced, as the unrelenting cost of living crisis batters household budgets.

"Nevertheless, consumer confidence continues its robust long-term upwards trend this month, and has recovered significantly since the record low of -49, in September 2022.

"Consumers like financial certainty, and this has to be the cornerstone if we are to see confidence to break out into positive territory."

Still to come, UK services and manufacturing PMIs for June are due at 0930 BST.

In corporate news, events group Informa said it was on track to deliver earnings at the upper end of guidance as revenues grew by 10.1% in the year to date.

Sales hit £1.4bn in the period, with a further £1bn of subscriptions/exhibitor revenue committed and visible in 2024, and strong events rebooking into 2025, the company said in a statement ahead of its annual general shareholder meeting.

Compass Group announced that it had agreed to repurchase up to $250m of its shares between 21 June and 17 December, as part of the final stage of its $500m share buyback plan.

The company said the purpose of the plan was to reduce its share capital by returning surplus capital to shareholders.