(Alliance News) - European equities were higher midday on Friday, shaking off a cautious start to the session as traders mulled poor economic data across the continent, as well as the latest developments concerning Russia's invasion of Ukraine.
Poor UK consumer confidence figures, compounded by a weaker retail sales reading, weighed on sentiment in London during early dealings. Stocks found decent footing as the morning progressed, however.
The FTSE 100 index was up 24.77 points, or 0.3%, at 7,492.15 midday Friday. The blue-chip index is 1.2% higher so far this week.
The mid-cap FTSE 250 index rose 145.26 points, or 0.7%, to 21,038.45. The AIM All-Share index was up 4.02 points, or 0.4%, at 1,040.38.
The Cboe UK 100 index was up 0.3% at 745.49. The Cboe 250 was 0.6% higher at 18,576.54, and the Cboe Small Companies was up marginally at 15,050.09.
In mainland Europe, the CAC 40 in Paris was up 0.8%, and DAX 40 in Frankfurt was 0.9% higher.
UK consumer confidence has continued to slump as the cost of living crisis deepens, a long-running survey showed. GfK's consumer confidence index fell five points to minus 31 in March as consumers confront a "wall of worry" amid 30-year-high levels of price inflation.
It is the fourth month in a row that the survey's headline figure has dropped, to a level last seen in October and November 2020 when Covid numbers were rising.
In addition, UK retail sales fell on a monthly basis in February, undershooting expectations for an increase. According to the Office for National Statistics, retail sales declined 0.3% month-on-month in February, following a 1.9% hike in January from December.
The figure for February was below FXStreet cited consensus of a 0.6% rise. Annually, retail sales rose 7.0% in February, slowing from growth of 9.4% in January.
"Slowly, very slowly, the cost of simply living day-to-day life has been creeping up and consumers are having to make adjustments. Overall retail sales fell by just 0.3%, but it's where they fell that is beginning to tell the story. Non-essentials are simply becoming less essential as budgets are having to flex to cover increasing costs elsewhere," AJ Bell analyst Danni Hewson commented.
"Non-store sales bore the brunt of the shift and though online retail is still significantly up on where it was pre-pandemic it's clear that the end of Covid restrictions has given a boost to bricks and mortar stores, the scales are levelling off, and a hybrid balance is being found."
London-listed housebuilders were lower following the poor UK consumer confidence data. Barratt Developments was down 3.8% and Taylor Wimpey fell 3.3%.
Retailer Next, at the other end of the large-cap index, was up 2.5%. It had fallen 3.3% on Thursday after cutting annual guidance.
Elsewhere in the retail sector, Wickes rose 7.1%.
The DIY retailer posted double-digit revenue growth, as it benefitted from increased demand for home improvements, driven by the Covid-19 pandemic.
Revenue in the financial year that ended January 1 jumped 14% to GBP1.53 billion from GBP1.35 billion. Pretax profit surged to GBP65.4 million from GBP28.9 million.
Sterling fell as low as USD1.3159 after the UK retail data, before rising to USD1.3198 midday London, up from USD1.3194 at the London equities close on Thursday.
The euro traded at USD1.1016 midday Friday London time, up from USD1.1002 late Thursday. Against the yen, the dollar was quoted at JPY121.68, down from JPY122.16.
It was a largely weaker session so far for the greenback, though the US currency's outlook is bullish, analysts at Dutch bank ING said.
"We think that lingering Russia-related downside risk for sentiment and upside risk for commodity prices continue to warrant a stronger dollar and weaker European currencies," ING analysts explained.
Business sentiment in Germany tanked in March as the war in Ukraine caused a crisis of confidence, according to survey data from Ifo Institute.
According to the Ifo, the business climate index for Germany plummeted by 7.7 points to 90.8 points in March from 98.5 in February.
Ifo said business expectations for Germany had seen a "record collapse" of 13.3 points in March, deeper than the fall of 11.8 points seen at the outbreak of the pandemic in March 2020.
Oil prices weakened. Brent oil was trading at USD117.12 a barrel midday Friday in London, down from USD118.85 at the equities close on Thursday.
Analysts at SP Angel Oil & Gas commented: "Oil prices fell as concerns over a European embargo of Russian crude diminished and exports from the storm-damaged CPC terminal on Russia's Black Sea coast were expected to resume on Friday."
Europe has, however, moved to stem its reliance on Russian oil, with the US and EU announcing a task force aimed at doing so.
The initiative being unveiled by US President Biden and EU chief Ursula von der Leyen will see the US work with partners to strive to supply Europe with an extra 15 billion cubic metres of liquefied natural gas this year, a statement said.
Gold was quoted at USD1,951.66 an ounce midday Friday in London, down from USD1,964.88 late Thursday.
In London, Petropavlovsk fell 11%, steadying after dropping as much as 33% earlier in the session. AJ Bell analyst Russ Mould noted the gold miner may face a "cash flow crisis" soon after being caught in the cross-hairs of sanctions imposed on Russian bank Gazprombank.
Petropavlovsk warned it has a USD200 million term loan and a USD86.7 million revolving credit facility with Gazprombank, which has been sanctioned by the UK, in the wake of Russia's invasion of Ukraine.
A condition of the financing means Gazprombank acts as an off-taker for all of Petropavlovsk's gold output.
The company, which has seen shares fall 92% year-to-date due to Russia's invasion of Ukraine, must now find a new buyer for its gold.
Mould added: "That's going to be difficult in the current environment. Petropavlovsk has bills to pay and it will be tricky to settle up if there is no cash coming in the door."
In New York, stocks were called higher. The Dow Jones Industrial Average was called up 0.2% and the S&P 500 and the Nasdaq Composite both called 0.3% higher.
Big tech stocks were up in pre-market trade despite the threat of regulatory intervention in Europe.
Facebook owner Meta Platforms was up 0.7%, e-commerce company Amazon up 0.2% and Google parent Alphabet's A stock was up 0.3%.
Negotiators from the European Parliament and EU member states have agreed on a landmark law to curb the market dominance of US big tech firms.
Meeting in Brussels, the lawmakers nailed down a long list of do's and don'ts that will single out the world's most iconic web giants as internet "gatekeepers" subject to special rules.
The "Digital Markets Act" has sped through the bloc's legislative procedures and is designed to protect consumers and give rivals a better chance to survive against the world's powerful tech juggernauts.
By Eric Cunha; ericcunha@alliancenews.com
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