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(Alliance News) - Stock prices in London opened lower on Tuesday, as optimism following a tech rally on Wall Street failed to offset some downbeat UK data.
The FTSE 100 index had opened higher before returning early gains, and edging into the red by 0.29 of a point at 7,693.90. The FTSE 250 was down 85.57 points, 0.4%, at 19,308.23, and the AIM All-Share was down 0.56 of a point, 0.1%, at 750.26.
The Cboe UK 100 was up 0.1% at 768.63, the Cboe UK 250 was down 0.6% at 16,806.55, and the Cboe Small Companies was slightly higher at 14,945.91.
In European equities, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was marginally higher.
Sterling was quoted at USD1.2735 early Tuesday, lower than USD1.2757 at the London equities close on Monday. The euro traded at USD1.0952, lower than USD1.0974. Against the yen, the dollar was quoted at JPY144.14, up versus JPY143.84.
In early local news, UK retail sales growth was weaker in December, according to figures from the British Retail Consortium.
The latest BRC-KPMG tracker for 2023 showed retail sales increased by 3.6% from 2022. Annually, food growth was up 8.1% and non-food declined by 0.1%.
UK total retail sales increased by 1.7% in December, against growth of 6.9% in December a year earlier. This was below the 3-month average growth of 2.3% and below the 12-month average growth of 3.6%. The period covers the five weeks November 26 to December 30.
"Christmas shoppers ditched clothing, jewellery and technology gifts, opting for beauty, health and personal care products, which, along with food and drink drove festive sales this year. Online sales remained in negative territory, although the decline was weaker than seen in recent months with sales down nearly 1% on last year," said Paul Martin, UK head of Retail, KPMG.
interactive investor's Richard Hunter commented: "This in turn could herald a difficult few months for retailers as spending is curtailed following any Christmas excesses, at a time when UK economic growth is increasingly in need of a shot in the arm."
In the FTSE 100, clothing retailers JD Sports and Frasers Group fell 1.9% and 1.1% respectively, though Primark-owner AB Foods edged up 0.2%.
B&M fell 0.6% in early trade.
B&M declared a special dividend of 20.0p as sales rose by 5% on a year before in its "golden quarter", the 13 weeks leading up to Christmas.
The Luxembourg-headquartered variety goods retailer said it is on track to open 76 new stores in the current financial year, including 45 in the UK, 11 in France, and 20 in its Heron Foods arm. B&M currently has 717 stores in the UK, 122 in France, and 331 under the Heron Foods and B&M Express brands. It reiterated its annual guidance for adjusted Ebitda of GBP620 million to GBP630 million, up from GBP573 million in financial 2023.
In the FTSE 250, recruitment firm Hays plunged 15% following a profit warning.
Hays said second-quarter group fees fell 10% annually on a like-for-like basis, with a slowdown seen in December. "It is too early to say if December's weakness reflects a more sustained market slowdown, or shorter-term deferrals of client and candidate decision-making. However, we expect near-term market conditions to remain challenging," the company warned.
It now expects underlying operating profit for its half-year ended December to be around GBP60 million, which is below the GBP73 million pencilled in by analysts, according to company-compiled market consensus.
Jupiter Fund Management plunged 12%, as it warned of around GBP2.2 billion in net outflows for 2023.
Jupiter had initially forecast 'modest net outflows' for 2023, reaffirming this forecast in October. "A delay in the funding of some institutional mandates combined with weaker than anticipated retail sentiment in October and November 2023 has led to an incrementally more negative flow outcome than we had anticipated," the fund explained.
Among London's small-caps, MJ Gleeson tumbled 11%.
The housebuilder and land investor said its Homes division completed 769 home sales in the half-year ended December 31, which was a 14% decrease year-on-year. It blamed weaker conditions across the housing market.
Gross margins are expected to fall below expectations by around 1.5% to 2.0% in its full financial year.
It expects to report net debt of GBP18.7 million at December 31, compared to net cash of GBP5.2 million at the end of June, which reflects the "significant investment in bringing forward a higher proportion of home starts before June 2023". The cash impact of this is expected to unwind over the next two years, it added.
More positively, it pointed to a stronger forward order book of 586 plots at the end of 2023, compared to 319 plots the prior year.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average 0.6%, the S&P 500 2.4% and the Nasdaq Composite up 2.2%.
Nvidia rose 6.4% hitting a new all-time high after revealing three new artificial intelligence chips aimed at running AI from home.
Meanwhile, Boeing shares fell 6.9%, after airlines and safety bodies around the world grounded some versions of the company's 737 MAX 9 jets pending inspections.
More bad news has come for the airplane maker, as United Airlines and Alaska Airlines reported loose hardware had been discovered on some of their Boeing 737 MAX 9 models during preliminary inspections.
In commodities, the latest retreat in oil prices was also helping to boost sentiment, soothing fears of a resurgence of energy-led inflationary pressures. Brent oil was trading at USD76.75 a barrel early Tuesday, higher than USD75.73 late Monday, but down from levels above USD78 in recent days.
"The main catalyst for the slide in energy prices was two-fold. The slide in oil prices came about because of Saudi Aramco cutting selling prices over concern that US producers are stealing market share, as well as slowing demand. Natural gas prices also slid despite colder weather with supplies and inventory remaining at highly elevated levels," explained CMC Markets UK's chief market analyst, Michael Hewson.
Gold was quoted at USD2,034.94 an ounce early Tuesday, edging up from USD2,032.33 on Monday.
In Asia on Tuesday, the Nikkei 225 index in Tokyo closed up 1.2%, hitting a fresh 33-year high. In China, the Shanghai Composite closed up 0.2%, while the Hang Seng index in Hong Kong fell 0.2%. The S&P/ASX 200 in Sydney closed up 0.9%.
Still to come in the economic calendar for Tuesday is an unemployment reading for the eurozone at 0900 GMT.
By Elizabeth Winters, Alliance News deputy news editor
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