Stock prices in London opened mostly lower on Friday morning as China posted its slowest growth in a year and a half, while UK retail sales performed better than expected last month.
The FTSE 100 index opened down 28.63 points, or 0.3%, at 8,356.50. The FTSE 250 was down 37.28 points, or 0.2%, at 21,063.64, and the AIM All-Share was up 1.39 points, or 0.2%, at 743.78.
London’s FTSE 100 had hit a five-month high on Thursday after a second day of gains, as eurozone interest rates were cut for the second time in a row. The index had risen 56.06 points, or 0.67%, to close at 8,385.13, marking the highest closing level since May 21.
The Cboe UK 100 was down 0.4% at 836.94, the Cboe UK 250 was down 0.2% at 18,640.17, and the Cboe Small Companies was down 0.1% at 16,965.41.
Retail sales in the UK performed better than expected in September, data published by the Office for National Statistics showed Friday.
Retail sales climbed 0.3% monthly in September, slowed from 1.0% in August but beating FXStreet-cited expectations of a 0.3% contraction. Notably, retail sales rose 3.9% on-year in September, the fastest annual rise since February 2022, and beating growth of around 2.3% in August.
September’s on-year growth was also comfortably ahead of expectations of a 3.2% climb.
Sales volumes were still 0.2% lower than in pre-pandemic February 2020. Further, sales volumes in September were at their highest index levels since July 2022, the ONS noted.
‘With peak trading and gifting season approaching, it is encouraging for non-food retailers such as department stores and consumer electronics retailers to see volume increases. This accentuates the recovery trends we have observed in earlier months and comes at a critical point as retail goes into the ’golden quarter’ and towards the winter holidays,’ said McKinsey’s Bogdan Toma.
‘The holiday season often determines the success of many brands. To navigate this critical period, brands are assembling dedicated ’holiday season win rooms,‘ combining marketers, pricing specialists, data scientists, and tech experts. These teams closely track the brand’s performance, keep an eye on competitors, and swiftly implement new strategies,’ Toma added.
In European equities on Friday, the CAC 40 in Paris was down slightly, while the DAX 40 in Frankfurt was up slightly, in an underwhelming start to the day after the European Central Bank lowered its interest rates by 25 basis points on Thursday.
‘Chief Christine Lagarde highlighted that inflation is coming under control, warned that there could be a temporary uptick, but the figures will be sustainably back to target by next year and that the Eurozone will unlikely enter recession. It was rather a dovish cut,’ said Swissquote Bank’s Ipek Ozardeskaya.
She added: ‘Note that the bank said that it will maintain its meeting-by-meeting data-dependent approach in place and is not committed to a particular rate pattern, but the bank‘s confidence that inflation is being tamed, and the morose economic data boost the probabilities of further rate cuts from the ECB in the coming meetings. The expectation now is that the ECB will cut its rates at every policy meeting until March. Next stop: December.’
The pound was quoted at $1.3059 early on Friday in London, up compared to $1.3014 at the equities close on Thursday. The euro stood at $1.0839, higher against $1.0838. Against the yen, the dollar was trading at JP¥150.09, up compared to JP¥149.94.
In the FTSE 100, British American Tobacco lost 2.1%.
The company noted a court-appointed mediator’s and monitor’s plan of compromise and arrangement in announcement, regarding outstanding tobacco litigation in Canada.
In response to the filing of the plan, BAT’s Canadian subsidiary, ITCAN, said: ‘Since filing for CCAA protection in 2019, ITCAN has been working in good faith under the direction of the mediator to resolve all tobacco litigation in Canada. The plan resolves all Canadian tobacco litigation and provides a full and comprehensive release to Imperial, BAT and all related entities for all tobacco claims.’
In the FTSE 250, Future dropped 12%, after Chief Executive Officer Jon Steinberg informed the board of his decision to step down later next year, having only joined in April 2023.
Last month, Sharjeel Suleman started his role as chief financial officer of Future, succeeding Penny Ladkin-Brand, who had been CFO for nine years.
Steinberg has resigned in order to relocate back to the US with his family. His notice period is twelve months and the board will now launch a search for his successor, the online magazine publisher and owner of price comparison website Go Compare said.
Chair Richard Huntingford commented: ‘Whilst we are disappointed that he will be departing next year, we respect Jon’s decision to return to the US. The Growth Acceleration Strategy he has implemented is well underway and, as highlighted by the pre-close update announced in September, continues to drive good strategic and financial progress. We will continue to work closely with Jon over the course of his notice period as we look to appoint his successor.’
Elsewhere, boohoo Group lost 0.8%.
The retailer’s CEO John Lyttle also intends to step down, and will support an orderly transition to a new successor.
Further, the group said that revenue fell 15% to £620 million in the six months to August 31, from £729 million a year ago. Gross merchandise value was down 7.3% to £1.18 billion from £1.27 billion. Adjusted earnings before interest, tax, depreciation and amortisation declined 32% to £21 million from £31 million.
The company will publish its half-year results in early November.
Meanwhile, Pulsar Helium says common shares will commence trading on Friday on the AIM market of the London Stock Exchange.
This follows the successful completion of the fundraising of £3.9 million, as announced on October 15. Total gross funds raised by the helium project development company, pursuant to the fundraising and the £1.1 million pre-IPO cornerstone investment, amount to £5 million.
The company’s common shares will continue to be listed and traded on the TSX Venture Exchange in Canada and the OTCQB Venture Market in the US.
In Asia on Friday, the Nikkei 225 index in Tokyo was up 0.2%. In China, the Shanghai Composite was up 2.9%, while the Hang Seng index in Hong Kong was up 3.4%. The S&P/ASX 200 in Sydney closed down 0.9%.
China posted its slowest growth in a year and a half on Friday as authorities come under pressure to follow up a recent slew of stimulus with more action to reignite the world’s number two economy.
Beijing’s National Bureau of Statistics said the economy expanded 4.6% year-on-year in the third quarter, down from 4.7% in the previous three months and the slowest since early 2023, when China was emerging from its strict zero-Covid policy. However, it was slightly better than the 4.5% predicted by analysts surveyed by AFP.
Still, NBS figures showing a forecast-beating rise in September retail sales – a gauge of consumer activity – provided a ray of light after a string of below-par readings on a range of indicators including inflation, investment and trade.
And ahead of the data, state media said the country’s top banks had cut interest rates on yuan deposits for the second time this year as part of a move to boost lending.
Meanwhile, Japanese inflation slowed in September with prices up 2.4% on-year, not including volatile fresh food, official data showed Friday according to AFP.
The core Consumer Price Index eased from 2.8% in August as the pace of increase in electricity and gas prices relented, the internal affairs ministry said. Despite the slowdown, the rate remained above the Bank of Japan’s 2% target, set over a decade ago as part of efforts to boost the stagnant economy.
The target has been surpassed every month since April 2022, although the bank has questioned to what extent that is down to temporary factors such as the Ukraine war.
In the US on Thursday Wall Street ended a mixed bag, with the Dow Jones Industrial Average up 0.4%, the S&P 500 down slightly and the Nasdaq Composite up slightly.
Brent oil was quoted at $74.69 a barrel early in London on Friday, up from $74.25 late Thursday.
Gold was quoted at $2,708.40 an ounce, higher against $2,693.53.
Still to come on Friday’s economic calendar, there is current account and construction output data from the eurozone, and building permits from the US.
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