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London midday: Markets rise as retail sales surge, but Shell drops

Fri, 17th Jan 2014 11:32

- UK retail sales grow fastest since 2004- Shell issues big profit warning- Insurers gain after data on premiumstechMARK 2,851.71 +0.28%FTSE 100 6,832.59 +0.25%FTSE 250 16,197.26 -0.08%Markets were registering moderate gains by Friday lunchtime as investors reacted to a surprise surge in UK retail sales in December.However, with the FTSE 100 trading at its highest level in eight months, upside in London was limited, especially after a significant profit warning from Royal Dutch Shell and a poorly-received statement from William Hill.The FTSE 100 was trading 0.25% higher at just over 6,830 by midday. The index has not closed above this mark since May 22nd 2013 when it reached 6,840.27 - a level previously not seen since late 1999.Retail sales smash forecastsUK retail sales volumes grew at a whopping 2.6% month-on-month pace in December, according to the Office for National Statistics (ONS), up from a revised 0.1% increase in November and well ahead of the 0.3% growth expected by analysts.On a year-on-year basis, growth accelerated to 5.3%, up from 1.8% and ahead of the 2.5% forecast. This was the fastest annual growth in sales since October 2004."With December's hefty monthly growth in retail sales, the consumer recovery seems to be at full steam," Martin Beck, UK Economist at Capital Economics. "That said, the official data is at odds with other evidence and suggests that the retail sector provided only a modest boost to gross domestic product growth in Q4."Economic data from the States will be in focus this afternoon with the University of Michigan's flashing reading its US consumer sentiment index due out, along with building permits, housing starts and industrial production data.Shell issues profit warningShell was a heavy faller this morning after saying that fourth-quarter earnings excluding one-offs are expected to be just $2.9bn, down from $4.5bn in the third quarter and $7.3bn in the fourth quarter the year before. Market expectations were for a profit of around $4bn.The company said that Upstream earnings were hit by higher exploration expenses and lower volumes in the fourth quarter, as well as the weakening of the Australian dollar.Sector peers BP and BG Group were also under the weather today.High Street bookie William Hill underwhelmed with a 6% increase in fourth-quarter revenue in retail and online. The company said it was a "strong end to the year".Leading the risers was car insurer Admiral after data showed that the decline in average premiums across the sector eased considerably at the end of 2013. Direct Line and ensure were also higher.Elsewhere in the insurance sector, Aviva gained after signing a joint venture agreement with Astra International to form Astra Aviva Life, which will sell and distribute life insurance products in Indonesia.Investors at pharmaceutical group Shire seemed pleased with the company's decision to sell off its loss-making Dermagraft skin treatment assets to US-based Organogenesis Inc, even if it means taking a loss on disposal and one-off impairment charge of $650m.Drinks group Diageo was lower after JPMorgan Cazenove lowered the shares to 'neutral'.FTSE 100 - RisersAdmiral Group (ADM) 1,401.00p +5.66%Glencore Xstrata (GLEN) 339.30p +3.70%Sainsbury (J) (SBRY) 370.80p +2.69%Anglo American (AAL) 1,432.50p +2.50%Rio Tinto (RIO) 3,409.00p +2.23%Marks & Spencer Group (MKS) 488.20p +2.13%Aviva (AV.) 481.00p +1.91%Johnson Matthey (JMAT) 3,397.00p +1.86%Resolution Ltd. (RSL) 359.70p +1.81%RSA Insurance Group (RSA) 103.90p +1.66%FTSE 100 - FallersRoyal Dutch Shell 'B' (RDSB) 2,256.00p -2.17%Royal Dutch Shell 'A' (RDSA) 2,150.50p -2.03%William Hill (WMH) 366.00p -1.80%Aberdeen Asset Management (ADN) 444.70p -1.40%ITV (ITV) 204.40p -1.30%Diageo (DGE) 1,939.50p -1.15%Ashtead Group (AHT) 800.50p -1.05%International Consolidated Airlines Group SA (CDI) (IAG) 429.20p -0.99%Rexam (REX) 505.50p -0.98%Old Mutual (OML) 191.50p -0.98%FTSE 250 - RisersEssar Energy (ESSR) 70.70p +4.97%esure Group (ESUR) 280.00p +4.44%African Barrick Gold (ABG) 199.90p +3.41%Imagination Technologies Group (IMG) 200.40p +3.41%Perform Group (PER) 250.80p +3.04%Partnership Assurance Group (PA.) 345.50p +2.83%Direct Line Insurance Group (DLG) 262.50p +2.78%Vedanta Resources (VED) 922.00p +2.73%Evraz (EVR) 106.90p +2.69%Spirent Communications (SPT) 95.20p +2.64%FTSE 250 - FallersWetherspoon (J.D.) (JDW) 773.00p -4.51%Petra Diamonds Ltd.(DI) (PDL) 120.80p -3.36%Ocado Group (OCDO) 507.00p -3.15%Ladbrokes (LAD) 170.50p -3.12%Rotork (ROR) 2,700.00p -2.17%Keller Group (KLR) 1,171.00p -2.17%Xaar (XAR) 1,044.00p -2.16%Barr (A.G.) (BAG) 576.50p -1.96%Daejan Holdings (DJAN) 4,609.00p -1.94%Redrow (RDW) 326.30p -1.86%BC
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