Stock prices were mixed in London at Friday midday as investors digested better than expected UK retail sales data, and a deceleration in China’s economic growth.
The FTSE 100 index was down 20.69 points, or 0.3%, at 8,364.44. The FTSE 250 was up 52.59 points, or 0.3%, at 21,153.51, and the AIM All-Share was flat at 742.40.
The Cboe UK 100 was down 0.3% at 837.57, the Cboe UK 250 was up 0.3% at 18,717.38, and the Cboe Small Companies was down 0.1% at 16,961.81.
According to the Office for National Statistics, 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.
‘Supermarkets might have lost ground over the month but they’re likely to hear their tills ring more frequently in October as households start to splash on festive treats that they can squirrel away at the back of cupboards,’ said AJ Bell’s Danni Hewson.
‘Confidence is going to be crucial and whilst the Budget is currently the focus of many households’ attention, falling inflation and borrowing costs should start to make people feel a little better about their own financial situations.’
Earlier in the day, China posted its slowest growth in a year and a half, 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.
‘It’s been a rocky ride for investors exposed to China but patience is being rewarded,’ said AJ Bell’s Russ Mould.
‘The needle has now moved back to bullish territory despite the latest figures showing economic growth has slowed again. What’s boosted shares is China’s central bank talking about a plan to encourage non-bank financial institutions to invest in the stock market,’ Mould added.
‘It’s the latest attempt to put the Asian country back on top – but as always, the key question is whether these stimulus initiatives will have a long-lasting effect. The real estate sector needs significant repair work, consumer spending needs to improve and businesses need to invest more. That’s a tough ask.’
In European equities on Friday, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.1%.
‘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 $1.3040 at midday on Friday in London, up compared to $1.3014 at the equities close on Thursday.
The euro stood at $1.0844, higher against $1.0838. Against the yen, the dollar was trading at JP¥149.96, up compared to JP¥149.94.
In the FTSE 100, British American Tobacco lost 2.9%.
The company noted a court-appointed mediator’s and monitor’s plan of compromise and arrangement 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 15%, 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 7.2%.
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.
Pulsar Helium shares rose 22% as it started 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.
On AIM, Mothercare jumped 44%.
The Watford-based company specialising in clothes, prams and other children’s essentials saw its shares rise on the announcement of new refinancing deal.
Mothercare has inked a £30 million joint venture for South Asian region with Reliance Brands Ltd, and a related refinancing with GB Europe Management Services Ltd. Accordingly, it receives gross consideration of £16 million from Reliance for participation in join venture, and secures new reduced debt facilities of £8 million.
Additionally, the firm posted pretax profit for the year to March 30 of £2.9 million, up from £2.2 million a year prior. Revenue, however, fell to £56.2 million from £73.1 million the previous year. Cost of sales narrowed to £36.6 million from £52.2 million.
Stocks in New York were called higher. The Dow Jones Industrial Average was seen flat, the S&P 500 index up 0.1%, and the Nasdaq Composite up 0.3%.
Brent oil was quoted at $73.69 a barrel at midday in London on Friday, down from $74.25 late Thursday.
Gold was quoted at $2,712.00 an ounce, up against $2,693.53.
Still to come on Friday’s economic calendar, there will be building permits data from the US.
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