London close: Stocks finish lower after dire retail sales data

(Sharecast News) - London stocks closed in negative territory on Tuesday, amid ongoing concerns about the Covid-19 pandemic and the potential for tighter restrictions, as investors digested dire UK retail sales figures.
The FTSE 100 ended the session down 0.65% at 6,754.11, and the FTSE 250 was 0.3% lower at 20,712.96.

Sterling was stronger against its major trading pairs, last rising 0.84% on the dollar to $1.3632, and advancing 0.72% against the euro to €1.1204.

"Hopes that Joe Biden's administration will deliver targeted and effective stimulus continue to be the main hope for the next few weeks, but on the flip side the impending start of earnings season will provide a reason to remain cautious, at least until the news from banks and other heavy-hitters are out of the way," said IG chief market analyst Chris Beauchamp.

"After the big gains of November and December, fuelled by vaccine hopes and the success of Joe Biden's campaign, investors are still wondering where the next big catalyst for further upside will come from, and are painfully aware that the Covid crisis remains untamed despite the introduction of vaccination programmes."

Market participants were mulling over industry research showing that UK retail sales slumped to a record low in 2020, after the high street saw little festive cheer in December.

According to the latest BRC-KPMG retail sales monitor, total sales increased 1.8% in December.

That was an improvement on December 2019's 0.2% uptick, and above the 12-month average decline, but it was below the three-month average of growth of 2.5%.

On a like-for-like basis, sales rose 4.8% year-on-year.

The weak December contributed to a 0.3% decline in total sales in 2020, the lowest since records began in 1995.

Food sales rose by 5.4%, but non-food was down 5.0%.

Investors were also digesting a warning from Bank of England governor Andrew Bailey, who said earlier that the UK faced a "very difficult" period following the resurgence of Covid-19.

In a speech to the Scottish Chambers of Commerce on Tuesday, Bailey said: "[We're] in a very difficult period at the moment and there's no question that it's going to delay, probably, the trajectory."

His "best guess" was that economic output in the last three months of 2020 was flat to slightly down, Reuters reported, and that unemployment was probably higher than the current official rate of 4.9%, at around 6.5%.

In equity markets, miniature wargames manufacturer Games Workshop slumped 6.71% even as it reported a better first-half performance than it had been expecting, as the group continued to benefit from Covid-19 restrictions and lockdowns.

"The shares have certainly seen some decent gains since the middle of last summer and made a record close yesterday, so today's declines could be simply a case of locking in profits," said CMC Markets analyst Michael Hewson.

Clarkson was knocked 2.26% lower by a downgrade to 'neutral' at JPMorgan.

Going the other way, B&Q owner Kingfisher rallied 1.82% after saying it expected current year profits to be at the top end of forecasts as fourth quarter like-for-like sales rose 16.9%, driven by people purchasing online.

Current sell-side analyst expectations for full-year adjusted profit before tax is £667m to £742m, according to company-compiled consensus estimates as at 4 January.

Cybersecurity firm Avast rose 0.56% after an initiation at 'buy' at Berenberg.

Playtech advanced 4.34% as the FTSE 250 gambling software company said its 2020 performance was set to be ahead of consensus expectations, with its financials division, Finalto, the standout performer.

Market Movers

techMARK 4,109.37 -1.04%

FTSE 100 6,754.11 -0.65%

FTSE 250 20,712.96 -0.30%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 157.90p +3.30%

Johnson Matthey (JMAT) 2,732.00p +3.25%

InterContinental Hotels Group (IHG) 4,876.00p +2.89%

Whitbread (WTB) 3,095.00p +2.25%

Glencore (GLEN) 276.40p +2.16%

BP (BP.) 305.00p +2.08%

Barclays (BARC) 154.24p +2.01%

Royal Dutch Shell 'A' (RDSA) 1,490.80p +1.94%

Rolls-Royce Holdings (RR.) 107.75p +1.89%

Royal Dutch Shell 'B' (RDSB) 1,433.60p +1.86%

FTSE 100 - Fallers

Fresnillo (FRES) 1,130.00p -4.16%

Experian (EXPN) 2,729.00p -3.67%

Hikma Pharmaceuticals (HIK) 2,562.00p -3.58%

Croda International (CRDA) 6,422.00p -3.02%

Reckitt Benckiser Group (RB.) 6,358.00p -3.02%

Spirax-Sarco Engineering (SPX) 11,295.00p -2.96%

JD Sports Fashion (JD.) 858.00p -2.85%

Smith & Nephew (SN.) 1,533.00p -2.79%

Taylor Wimpey (TW.) 162.85p -2.54%

Intertek Group (ITRK) 5,578.00p -2.52%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 354.40p +52.28%

Petrofac Ltd. (PFC) 172.85p +5.43%

Gamesys Group (GYS) 1,320.00p +5.10%

TI Fluid Systems (TIFS) 238.00p +4.73%

Playtech (PTEC) 468.70p +4.34%

Rank Group (RNK) 145.40p +4.30%

BMO Commercial Property Trust Limited (BCPT) 78.80p +3.41%

Hilton Food Group (HFG) 1,116.00p +3.33%

Hammerson (HMSO) 22.81p +3.12%

Wood Group (John) (WG.) 358.30p +3.02%

FTSE 250 - Fallers

Games Workshop Group (GAW) 10,850.00p -6.71%

Centamin (DI) (CEY) 122.85p -3.31%

AO World (AO.) 404.50p -3.11%

FDM Group (Holdings) (FDM) 1,056.00p -2.94%

BlackRock World Mining Trust (BRWM) 562.00p -2.94%

Countryside Properties (CSP) 429.00p -2.94%

Hochschild Mining (HOC) 203.60p -2.86%

OSB Group (OSB) 425.80p -2.70%

Dechra Pharmaceuticals (DPH) 3,480.00p -2.63%

Provident Financial (PFG) 300.80p -2.46%