The FTSE 100 opened lower Friday morning despite a boost in retail sales in July, and underperforming against its counterparts in Paris and Frankfurt which traded higher.
The FTSE 100 index opened just 3.93 points lower at 8,343.31. The FTSE 250 was down 14.52 points, or 0.1%, at 21,080.53, and the AIM All-Share was down 0.81 points, or 0.1%, at 773.98.
The Cboe UK 100 was up 0.1% at 834.20, the Cboe UK 250 was fractionally higher at 18,477.50, and the Cboe Small Companies was unchanged at 16,869.67.
According to the Office for National Statistics, retail sales in the UK rose in July.
Retail sales volumes are estimated to have climbed 0.5% monthly in July after a decline of 0.9% in June from May. The June estimate was upwardly revised from a previously reported 1.2% fall. On-year, retail sales growth was 1.4% in July, as the ONS noted that comparably poor weather hurt sales in July 2023.
‘Department stores and sports equipment stores reported a boost following summer discounts and sporting events,’ the ONS highlighted. Sales volumes were up 1.1% in the three months to July compared to the three months to April.
‘Department stores and sports equipment grew particularly strongly, boosted by summer discounts and the European football championship. Online spending was all strong across the board. Labour’s landslide election victory, the recent interest rate cut and falling mortgage costs have likely all played their part to support UK consumer spending,’ commented Wealth Club’s Charlie Huggins.
‘Overall, the UK economy appears to be chugging along, with little sign that consumers are significantly cutting back. With inflation moderating, paving the way for further interest rate cuts, retailers can look ahead to the rest of the year with a degree of optimism.’
In European equities on Friday, the CAC 40 in Paris was up 1.2%, while the DAX 40 in Frankfurt was up 1.6%.
The pound was quoted at $1.2875 early on Friday in London, higher than $1.2866 at the equities close on Thursday. The euro stood at $1.0982, against $1.0988. Against the yen, the dollar was trading at JP¥149.03, up compared to JP¥148.89.
In the FTSE 100, GSK fell 0.3%, after a court ruling in Florida found in its favour.
According to the London-based company, the court’s judgement found in favour of GSK, thus excluding plaintiff’s experts’ general and specific causation testimony that ranitidine, known as Zantac, was a significant risk for Wilson’s prostate cancer.
GSK said it welcomed the Daubert’s ruling and will now seek dismissal of the upcoming Wilson case in Florida, whereby plaintiffs alleged a causal link between ranitidine and prostate cancer.
Zantac was a heartburn drug that was pulled off the market in 2020 at the request of the US Food & Drug Administration, after low levels of a ‘probable carcinogen’ were found in samples. The carcinogen, known as NDMA, is not harmful in very small amounts. However, tests showed that there were excessive quantities of NDMA in ranitidine, otherwise known as Zantac.
Meanwhile, in the FTSE 250, Diversified Energy gave back a little ground.
The firm was fractionally lower on Friday morning, after telling investors that it has completed the acquisition of natural gas properties and related facilities from Crescent Pass Energy for a purchase price of $106 million. The acquisition net purchase price is $101 million after customary purchase price adjustments.
Chief Executive Officer Rusty Hutson said: ‘We are excited to announce the completion of another attractively-priced acquisition of Central Region assets which stands to benefit Diversified as a result of our continued growth in scale and density throughout the asset footprint.’
In Asia on Friday, the Nikkei 225 index in Tokyo was up 3.6%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was up 1.8%. The S&P/ASX 200 in Sydney closed up 1.3%.
In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.4% at 40,563.06, the S&P 500 up 1.6% at 5,543.22 and the Nasdaq Composite up 2.3% at 17,594.50.
Joe Biden and Kamala Harris made an upbeat show of unity Thursday as they held their first joint public event since Harris replaced the president as the Democratic Party’s candidate in November’s election.
Biden announced a major deal to reduce medication prices for retirees on social welfare programs. The drug prices deal will reduce costs for retirees on 10 key medicines, including treatments for diabetes, heart failure and blood clots. But the biggest star was Biden’s vice president.
Harris is set to be crowned as the Democratic nominee at the party convention in Chicago next week. But she made a display of vice presidential deference, delivering only short remarks to introduce Biden, ahead of a speech in North Carolina on Friday, where she is expected to debut her economic policy.
Kamala Harris is expected to take on companies unfairly jacking up prices as she sets out her economic agenda Friday in her first major policy announcement as the Democratic Party’s presidential nominee.
Elsewhere, Donald Trump has said that Americans are struggling with massive price hikes in a news conference at his New Jersey golf club. He blamed these on VP Kamala Harris, looking to saddle his new Democratic rival with the unpopular economic record of President Joe Biden.
A day earlier, he struggled to make a sustained case for his economic policies during a meandering speech that his campaign had billed as a major policy address. The event came one day after the Labour Department announced year-over-year inflation had reached its lowest level in more than three years in July — the latest sign that the worst price spike in four decades is fading.
Brent oil was trading lower at $80.75 a barrel on Friday morning, from $81.30 on Thursday.
‘Crude prices have had something of a choppy week, though the front WTI contract is, just about, set to eke out a second straight weekly gain, for the first time since early-July, as the trading week draws to a close,’ said Pepperstone’s Michael Brown.
‘Receding US recession concerns have come to the aid of crude bulls this week, with better-than-expected retail sales and jobless claims figures allaying fears of a more rapid than expected deterioration in US economic conditions.’
He added: ‘Lingering geopolitical risk is also helping to keep a floor under crude prices, as market participants continue to monitor, and await, a potential Iranian response to the assassination of a Hamas leader in Tehran two weeks ago. While such retaliation has yet to eventuate, the continued threat of such action is likely denting the appetite of participants to take on significant short positions, particularly ahead of the weekend trading break.’
Gold was quoted at $2,455.10 per ounce early Friday, lower than $2,456.75 on Thursday.
Still to come on Friday’s economic calendar, there is trade balance from the eurozone at 1000 BST, followed by building permits and the Michigan consumer sentiment index from the US later in the day.
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