London stocks were a mixed bag on Friday at midday, as a strong set of UK retail figures for June, falling but slowing from May’s rate, was offset by falling UK consumer confidence in July.
Amid the winners was DWF, though, who agreed to be taken over by Inflexion Private Equity Partners for around £342 million.
The FTSE 100 index was up 8.07 points, 0.1%, at 7,654.12. The FTSE 250 was down 32.58 points, 0.2%, at 7,654.12, and the AIM All-Share was up 1.17 points, 0.2%, at 765.46.
The Cboe UK 100 was up marginally at 763.58, the Cboe UK 250 was up marginally at 16,945.02, and the Cboe Small Companies was up 0.1% at 13,714.25.
On Friday morning, investors focused on a strong UK retail sales print.
The Office for National Statistics said retail sales fell 1.0% annually in June, compared to a revised 2.3% decline in May. The market had been expecting a 1.5% fall, according to FXStreet-cited consensus.
From the previous month, sales rose 0.7% in June, picking up speed from a downwardly revised 0.1% rise in May. June’s reading topped market consensus, which had forecast a 0.2% rise.
‘There’s nothing quite like a long stretch of really glorious weather to improve the mood of the British public and that’s exactly what we got at the start of June (though under today’s grey skies we might be forgiven for wondering if we dreamed it),’ said AJ Bell head of financial analysis Danni Hewson.
‘Consumers rushed to update their summer wardrobes, finding department stores had handily reached for the red pen to soothe any guilt of spending on fripperies when budgets are uncomfortably tight.’
However, it paints something of a mixed picture of the retail climate in the UK, with GfK’s survey data on Friday also pointing to a sudden decline in consumer confidence in June, amid relentless inflation and rising interest rates.
GfK’s Consumer Confidence Index plunged six points in July to minus 30, with concerns for personal finances and the wider UK economy over the coming year down six and eight points respectively. However, the forecast for personal finances over the next 12 months is still 19 points higher than this time last year, while expectations for the general economy remain 24 points better than last July.
In European equities on Friday, the CAC 40 in Paris was up 0.3%, while the DAX 40 in Frankfurt was down 0.4%.
The pound was quoted at $1.2855 at midday on Friday in London, higher compared to $1.2851 at the equities close on Thursday. The euro stood at $1.1126, lower against $1.1144. Against the yen, the dollar was trading at JP¥141.68, higher compared to JP¥140.31.
In the FTSE 100, the index was led by Hargreaves Lansdowne, which was 2.0% higher.
Jefferies raised the digital wealth management service provider to ’buy’ from ’underperform’.
On Wednesday, Hargreaves reported higher net new business in the fourth quarter, though it noted weaker share dealing volumes amid fragile investor confidence.
In the FTSE 250, FirstGroup was up 1.9%.
The Aberdeen, Scotland-based public transport provider said overall trading in the financial year so far has been in line with the expectations it set out with its annual results in early June.
At that time, the company said current trading and outlook for financial 2024 was in line with its own expectations. It had said it expected ‘further sequential progress’ for its First Bus division. In First Rail, it had expected profit from open access and rail additional services to be at least in line with financial 2023.
Amongst London’s small-caps, DWF jumped 13% to 96.00p.
DWF announced that it has agreed a takeover offer with Inflexion Private Equity Partners. Inflexion will pay 100p per share in its cash offer. This values DWF at about £342 million.
Inflexion said it believes private ownership is preferable for DWF given the growth opportunities available to it.
abrdn New Dawn Investment Trust was up 6.6%.
The investor in companies in the Asia-Pacific region agreed a head of terms for a proposed combination with Asia Dragon Trust.
The combination will be effected via a scheme of reconstruction, where abdrn New Dawn is wound up and its assets are transferred to Asia Dragon for shares in the enlarged company.
abrdn Fund Managers, which currently manages both companies, will continue to manage the enlarged group.
It said that shareholders will benefit from ‘the greater economies of scale’ from the enlarged asset base, greater secondary liquidity in Asia Dragon shares, as well as cost efficiencies.
Shares in Asia Dragon Trust were up 0.6%.
On AIM, Renalytix was up 12%.
The London-based kidney health-focused diagnostics company announced a distribution deal with Dubai-based Vector Pharma FZCO for its kidneyintelX.dkd testing in the Middle East.
The prognostic test, used to identify type two diabetes and chronic kidney disease in adults, will be made commercially available in Saudi Arabia, Bahrain, Qatar, Oman, Kuwait, and United Arab Emirates.
Stocks in New York were called higher. The Dow Jones Industrial Average was called up 0.1%, the S&P 500 index up 0.2%, and the Nasdaq Composite up 0.4%.
Brent oil was quoted at $80.61 a barrel at midday in London on Friday, up from $79.33 late Thursday. Gold was quoted at $1,963.82 an ounce, down against $1,969.54.
Looking ahead to next week, there is a packed UK and global corporate calendar. There are also central bank decisions from the US on Wednesday, the EU on Thursday, and Japan on Friday.
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