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(Alliance News) - Stock prices in London were lower at midday on Tuesday, with the FTSE 100 hurt by share price falls for oil majors, while a less than stellar reading of the UK retail sector kept a lid on sentiment.
"With limited corporate news on the agenda this week to drive trading volumes, it's likely that we could see markets struggle to find direction until we get updates on inflation, jobs and monetary policy," AJ Bell analyst Russ Mould commented.
The FTSE 100 index was down 24.57 points, or 0.3%, at 7,575.42. The FTSE 250 was down 27.50 points, or 0.1%, at 19,086.05, and the AIM All-Share was down 0.81 of a point, or 0.1%, at 791.00.
The Cboe UK 100 was down 0.3% at 756.08, the Cboe UK 250 lost 0.2% at 16,634.78, and the Cboe Small Companies was 0.3% lower at 13,248.15.
UK retail sales increased last month, though the trio of bank holidays failed to boost figures as much as expected.
According to the British Retail Consortium, sales rose 3.9% on-year in May. It compares to a 1.1% fall a year prior. It is also below the three-month average growth of 4.7%.
On a like-for-like basis, sales increased 3.7% year-on-year last month, falling below the three-month average rise of 4.7%.
"With consumer confidence still recovering from record depths, and continued tightening of household incomes, we are unlikely to see substantial sales growth in the coming months," BRC Chief Executive Helen Dickinson said.
The pound was quoted at USD1.2408 at midday on Tuesday in London, lower compared to USD1.2415 at the close on Monday.
In London, oil majors Shell and BP were among the worst blue-chip performers at midday. The stocks were down 2.7% and 1.9%, respectively, as the rally seen in oil prices on Monday, following a production cut by Saudi Arabia, gave way to selling pressure.
Brent oil was quoted at USD75.38 a barrel at midday in London on Tuesday, down from USD77.37 late Monday.
The top performers in the FTSE 100, however, were Ocado, abrdn and Legal & General. The stocks were up 3.7%, 3.1%, and 1.4%.
Also on the up, British American Tobacco added 1.1% after the cigarette maker said it will make no change to strategy under its new chief executive, focusing on non-combustible "reduced-risk products" for smokers.
BAT said it is on track to deliver its revenue goal of GBP5 billion for its New Categories segment in 2025 and added it is eyeing profitability for the segment in 2024.
However, Russ Mould, investment director at AJ Bell, was cautious on the shift: "Tobacco companies are pinning their hopes on mass take-up of next generation products such as vaping, yet they face considerable pushback from regulators, health campaigners and more. Each week there seems to be someone else calling for tougher rules on vaping, in particular, with children's doctors the latest to say the rules have to change."
In the FTSE 250, Warehouse REIT dropped 6.6% as it swung to an annual loss and reported a lower portfolio value.
The industrial warehouse investor swung to a pretax loss of GBP182.9 million from a profit of GBP191.2 million the prior year. This was driven by a fair value loss of GBP193.4 million on investment properties, from a gain of GBP163.7 million gain the prior year.
Warehouse REIT's portfolio valuation was GBP828.8 million, a 19% decline from GBP1.01 billion the previous year. The company explained that this was caused by central bank interest rate hikes.
Chemring jumped 8.3% after it reported a record first-half order intake, with its order book reaching the highest level in over a decade at GBP750 million.
AJ Bell's Mould said the company was benefiting from "stronger prospects" thanks to the Russia-Ukraine war "encouraging governments around the world to spend more on defence".
Elsewhere in London, Zotefoams added 3.5% after the cellular material technology producer extended its exclusivity agreement with sportswear maker Nike to the end of 2029.
On AIM, Barkby soared 70% after its subsidiary, Cambridge Sleep Sciences, was granted a five-year licence to Sleep Sense International for the manufacture of a 'smart pillow' using CSS's 'Sleep Engine' platform.
The commercial property development and investment firm expects the agreement to generate royalty payments of GBP1.3 million in the first year and GBP3.0 million in the second year.
In European equities on Tuesday, the CAC 40 in Paris was down 0.3%, while the DAX 40 in Frankfurt was 0.2% lower.
The Eurozone construction sector fell in May, and at the fastest rate in the year so far to boot. It kept sector firmly in contraction territory, according to figures from S&P Global and Hamburg Commercial Bank.
The HCOB Eurozone construction purchasing managers' index total activity index posted at 44.6 points, down from 45.2 in April.
Remaining below the 50-point no-change mark, it shows the sector remains in contraction. This was due to activity levels falling for the thirteenth month in a row, with surveyed firms continuing to signal weak demand for new projects.
The euro stood at USD1.0686 midday Tuesday, lower against USD1.0711 at the time of the European equities close on Monday.
Stocks in New York are called to open lower. The Dow Jones Industrial Average, the S&P 500 index, and the Nasdaq Composite were all seen 0.1% lower on Tuesday.
On Monday, US equities ended lower as investors mulled the Federal Reserve's next interest rate move and Apple's shares fell after the iPhone maker announced its mixed-reality headset, the Vision Pro.
Susannah Street, head of money and markets at Hargreaves Lansdown, added that the world's largest economy is showing "more signs of heading for a contraction", with growth data in the "mighty services sector" slowing more quickly than expected last month.
Apple shares were 2.6% lower in pre-market dealings. It had risen 1.5% on Monday.
Against the yen, the dollar was trading at JPY139.36 midday Tuesday, lower compared to JPY139.60 at the close on Monday.
Gold was quoted at USD1,964.41 an ounce, higher against USD1,959.00.
By Heather Rydings, Alliance News senior economics reporter
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