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(Alliance News) - The FTSE 100 was see-sawing on Friday morning, while an upbeat update from Marks & Spencer kept the midcap benchmark's losses to a minimum.
"Investors recovered some poise after a bruising few trading sessions which reflected any number of concerns," Richard Hunter, head of Markets at interactive investor, said.
He continued: "In the US, sentiment improved after a strong jobless claims number, while a rotation out of cyclical and back into technology stocks underpinned gains for the Nasdaq and S&P500."
The FTSE 100 index was down 17.65 points, or 0.3%, at 7,041.21 on Friday, after initially opening 0.3% higher. The mid-cap FTSE 250 index was down 19.70 points, or 0.1%, at 23,587.17. The AIM All-Share index was down 0.1% at 1,259.04.
The Cboe UK 100 index was down 0.1% at 700.67. The Cboe 250 was down 0.1% at 21,460.52, and the Cboe Small Companies was also 0.1% lower at 15,290.81.
In mainland Europe, the CAC 40 stock index in Paris was 0.3% lower, while the DAX 30 in Frankfurt was down 0.5%.
"However, some of the hangover from weakness in commodities and oil prices lingered on, with the crackdowns in China adding to the mix. In particular, perceived weakening economic growth is being exacerbated by the tightening of restrictions for both the technology and the luxury goods sectors, while the presence of the Delta variant is also contributing to the general market woes in the region's markets," Hunter added.
China passed a sweeping privacy law aimed at preventing businesses from collecting sensitive personal data, as the country faces an uptick in internet scams, leaks and concerns about tech giants abusing clients' personal information.
Under the new rules passed by China's top legislative body on Friday, state-run and private companies handling personal information will be required to reduce data collection and obtain user consent.
In Tokyo, the Nikkei 225 index closed down 1.0% on Friday. In China, the Shanghai Composite ended 1.1% lower, while the Hang Seng index in Hong Kong was down 2.1% in late trade. The S&P/ASX 200 in Sydney ended down 0.1%.
In London, Wm Morrison Supermarkets was 4.6% higher after Private equity firm Clayton, Dubilier & Rice late Thursday announced a new GBP7 billion bid for the supermarket.
The deal has been unanimously accepted by the board of the grocer and directors have said shareholders should vote in favour of the takeover at a meeting due in early October.
It means the company has withdrawn its recommendation for investors to accept a previous GBP6.7 billion takeover deal from a consortium led by Softbank-based private equity firm Fortress.
Softbank-backed investment manager Fortress hasn't abandoned yet its effort to buy Morrisons, however.
Fortress on Friday asked Morrisons shareholders to take no action on the new CD&R bid, saying it is "considering its options" with respect to the all-cash offer it made at the start of July and increased at the start of August. It said it will make a further announcement "in due course".
Last week, CD&R was given an extended deadline until this afternoon by takeover regulators to say whether it wants to make a new offer for Morrisons, or to walk away.
CD&R had originally been turned down by the Morrisons board over a potential GBP5.5 billion bid. In June, the board said the offer "significantly undervalued Morrisons and its future prospects". Since then CD&R has been pondering whether it should increase its bid for the supermarket chain.
Blue chip peers Sainsbury and Tesco were up 1.8% and 1.1%, respectively. Ocado was gained 1.2%.
Fellow retailer Marks & Spencer was the best performer in the FTSE 250, up 11%, after it has made a strong start to its financial year that began on April 4, with improving sales and profit.
M&S said the easing of restrictions has led to an "encouraging" performance. In the 19 weeks to August 14, total revenue was up 29% from a year ago, and up 4.4% on the same period in financial 2020, meaning two years ago and before the pandemic began.
This has been led by an outperformance in Food sales, which are up 11% on a year ago and up 9.6% on two years ago, with retail park locations trading strongly. Clothing & Home sales are up 92% year-on-year, but are still 2.6% below financial 2020.
Looking ahead, M&S expects adjusted pretax profit at the upper end of its guided range of GBP300 million to GBP350 million.
The positive sentiment around the UK retail sector came in spite of retail sales unexpectedly declined in July, data from the Office of National Statistics showed.
Retail sales volumes fell by 2.5% in July from June, which is significantly below the market consensus cited by FXStreet of a 0.4% gain.
But, the ONS also noted July's sales are up 5.8% on the pre-coronavirus pandemic level in February 2020.
AJ Bell analyst Danni Hewson said: "Given the choice, after months of restrictions, consumers have been spending their cash on fun rather than fripperies. Retail sales in July were down, pretty much across the board as life found it's post lockdown level."
UK online retail investment platform interactive investor has invited several investment banks to propose an initial public offering in London that could value the company at up to GBP2 billion, Sky News reported Thursday.
Sky News reported that the fund supermarket has started pitching a potential 2022 flotation to several banks, although according to bankers a formal decision has yet to be made, and will depend on market conditions. Should a flotation take place, it is likely that the Manchester-based firm would be valued in a range of GBP1.5 billion and GBP2.0 billion.
Sky News described ii as the second largest fund supermarket, beaten only by FTSE 100 constituent Hargreaves Lansdown, however, it operates differently by using a flat-fee subscription model. For the six months ended June 30, ii reported a 19% rise in net revenue year-on-year to GBP76.1 million from GBP63.8 million, with a 33% rise in new clients to 31,667.
HL was down 1.0% in early trading.
The pound was quoted at USD1.3620 early Friday, down from USD1.3666 at the London equities close Thursday. The euro was priced at USD1.1683, flat from USD1.1685.
Against the Japanese yen, the dollar was trading at JPY109.59, soft from JPY109.75.
Brent oil was quoted at USD66.26 a barrel Friday morning, up from USD66.10 late Thursday. Gold was trading at USD1,788.10 an ounce, up against USD1,781.65.
By Paul McGowan; paulmcgowan@alliancenews.com
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