Stock prices in London were in the green on Friday morning, making tentative gains despite blue-chip equities in mainland Europe starting the day slowly.
The FTSE 100 index traded 8.57 points higher, 0.1%, at 8,281.03. The FTSE 250 was up 22.01 points, 0.1%, at 20,520.73, though the AIM All-Share added 1.85 points, 0.2%, at 774.23.
The Cboe UK 100 rose 0.1% to 823.76, the Cboe UK 250 added 0.2% at 17,883.20, and the Cboe Small Companies was 0.1% higher at 16,822.03.
In European equities on Friday, both the CAC 40 in Paris was flat and the DAX 40 in Frankfurt was down 0.2%.
The pound was quoted at $1.2648 early Friday, down from $1.2675 late Thursday. The euro stood at $1.0696, falling from $1.0713. Against the yen, the dollar was trading at JP¥158.91, up from JP¥158.71.
UK economic data was more robust on Friday. Retail sales increased at a faster pace than expected last month, numbers showed.
According to the Office for National Statistics, UK retail sales volumes surged 2.9% in May from April, topping the FXStreet cited consensus of a 1.5% rise. Sales had declined 1.8% in April from March. April’s outcome was upwardly revised from an initially-reported 2.3% decline.
On May’s reading, the ONS said: ‘Sales volumes rose across most sectors, with clothing retailers and furniture stores rebounding following poor weather in April. More broadly, sales volumes rose by 1.0% in the three months to May 2024 when compared with the previous three months. However, they fell by 0.2% when compared with the three months to May 2023.’
Year-on-year, retail sales rose 1.3% in May, defying expectations of a 0.9% decline, and improving markedly from a 2.3% slide in April.
UK consumer confidence has seen its third monthly increase since March bolstered by increasing optimism about the economy, a survey suggests.
GfK’s long-running consumer confidence index rose by three points in June as it made its slow climb out of negative territory to minus 14.
The increase was driven by a seven-point improvement in confidence in the general economic situation during the last 12 months to minus 32, and a six-point rise in expectations for the economy over the coming year to minus 11.
The data follows what was interpreted as a dovish hold by the Bank of England on Thursday. The left BoE the door ajar open for an August interest rate cut after saying June’s decision to leave bank rate unchanged was ‘finely balanced’.
At its June meeting, the BoE’s Monetary Policy Committee voted 7-2 to keep bank rate at 5.25% for the seventh-successive meeting.
The decision came after numbers on Wednesday showed that inflation returned to the BoE’s target for the first time since July 2021.
According to the Office for National Statistics, the rate of yearly consumer price growth faded to 2.0% in May, from 2.3% in April. The reading was in-line with the FXStreet cited consensus.
XTB analyst Kathleen Brooks noted that the brighter UK economic prospects have not led to a polling boost for the Conservative party, however, as the general election campaign rages on.
‘Interestingly, a boost to the economy and a strong consumer ahead of an election is usually good news for the incumbent party, especially with the prospect of a near-term interest rate cut is thrown in for good measure. Not so for the Tories, who remain in the doldrums polls wise and are expected to see a massive wipe out and a mass loss of seats at this election. The UK electorate are unwilling to ascribe the good economic data to the Conservatives, and this is also weighing on their chances in this election,’ Brooks added.
UK Prime Minister Rishi Sunak said Tory figures who are found to have broken gambling rules ‘should face the full force of the law’, as he is likely to face further questions on the betting scandal engulfing his faltering election campaign.
The prime minister said he was ‘incredibly angry to learn’ of the allegations that a string of people with links to the Conservative Party or Number 10 bet on the timing of the July 4 contest before he announced it.
Concerns over political insiders profiting from the election date could overshadow his campaigning on Friday, when he is at the Welsh Conservative manifesto launch in Kinmel Bay.
In London, shares in Britvic jumped 15% after the soft drinks maker, behind brands such as Robinsons squash and R White’s lemonade, said it rebuffed a takeover approach from brewer Carlsberg Group.
Noting ‘press speculation’ Britvic said it received an unsolicited takeover proposal from Carlsberg earlier this month, at an offer price of 1,250 per share. That would give the FTSE 250 listing an equity value of £3.09 billion. It followed a proposal of 1,200p per share, which valued Britvic at £2.96 billion.
‘The board together with its advisers carefully considered the second proposal, and concluded that it significantly undervalues Britvic, and its current and future prospects,’ Britvic said.
‘The board remains confident in the current and future prospects of Britvic. It recognises its fiduciary duties and will consider any further proposal on its merits.’
The clock for Carlsberg is now ticking, and it has a ’put up or shut up’ deadline of the close of play on July 19.
Carlsberg said: ‘Carlsberg believes that the proposal represents a compelling opportunity for Britvic shareholders to realise their investment in full in cash at an attractive valuation. Carlsberg believes that the potential transaction would enable it to capture appealing long-term growth opportunities from Britvic’s comprehensive portfolio of leading brands in an attractive segment of the beverage market where Carlsberg already has a strong track record.’
Among London’s large-caps, Informa rose 1.3%. The information publisher and events organiser hailed double-digit year-to-date revenue growth, and said it is on track to deliver 2024 results at the upper end of guidance.
‘The Informa group has changed gears and we are now delivering 10%+ growth,’ Chief Executive Stephen Carter said.
Five-month group underlying revenue growth totalled just over 10%, ‘reflecting strong operational performances across all businesses’.
It said revenue delivered to date amounts to £1.4 billion, and it noted a further £1 billion of Subscriptions / Exhibitor revenue is ‘committed and visible’ in 2024. In the B2B Markets offering, it said it is on track for high single digit underlying revenue growth in 2024. In Academic Markets, it believes it is set for over 5% growth.
At group level, it expects high single digit underlying revenue growth and group revenue between £3.45 billion and £3.50 billion.
United Utilities and Severn Trent rose 3.0% and 1.6%, the best FTSE 100 performers. JPMorgan lifted the water utilities to ’overweight’ and ’neutral’, respectively.
Brent oil was quoted at $85.55 a barrel early Friday, largely unmoved from $85.57 late Thursday. Gold rose to $2,357.91 an ounce, flat from $2,357.90.
In Asia on Friday, shares were largely lower. The Shanghai Composite ended down 0.2%, while the Hang Seng in Hong Kong traded 1.4% lower. Tokyo’s Nikkei 225 fell 0.1%, but over in Sydney, the S&P/ASX 200 closed 0.3% higher.
In New York, the Dow Jones Industrial Average rose 0.8% on Thursday. The S&P 500 lost 0.3% and the Nasdaq Composite fell 0.8%.
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