LONDON MARKET OPEN: Stocks up despite UK retail sales growth miss

(Alliance News) - Stock prices in London opened higher on Friday, despite weaker-than-expected October retail sales figures for the UK.

The FTSE 100 index opened up 50.90 points, 0.7%, at 7,461.07. The FTSE 250 was up 156.88 points, 0.9%, at 18,508.36, and the AIM All-Share was up 2.87 points, 0.4%, at 716.16

The Cboe UK 100 was up 0.7% at 744.69, the Cboe UK 250 was up 0.9% at 15,997.34, and the Cboe Small Companies was up 0.2% at 13,360.34.

In European equities, the CAC 40 in Paris was up 0.5%, while the DAX 40 in Frankfurt was up 0.4%.

UK retail sales declined last month despite expectations of a month-on-month increase, and declined faster than expected on an annual basis, official numbers on Friday showed.

According to the Office for National Statistics, retail sales volumes declined 2.7% year-on-year in October, quickening from a 1.3% decline in September. The September figure was revised from a previous 1.0% decline.

The October read also came in worse than feared, with market expectations of a 1.5% decline, according to FXStreet-cited consensus.

Retail sales declined 0.3% in October from September, falling short of consensus. A monthly increase of 0.3% was forecast, according to FXStreet. In September, retail sales had fallen 1.1% from August, revised from a previous 0.9% decline.

"The Bank of England's attempts to whittle down inflation back to its target of 2% is perhaps finally feeding through into consumers' pockets with this month's data reinforcing September's cliff-face drop," said Ebury analyst Phil Monkhouse.

"Whilst this may be good news for some, retailers – particularly smaller businesses - are now well on their way to becoming patient zero of sticky interest rates as shoppers turn a blind eye to Christmas festivities and prioritise winter heating costs and mortgage repayments."

The pound was quoted at USD1.2392 early on Friday in London, lower than USD1.2417 at the equities close on Thursday. The euro stood at USD1.0842, lower than USD1.0855. Against the yen, the dollar was trading at JPY150.06, lower than JPY150.54.

In London's FTSE 100, AstraZeneca rose 1.5%.

The pharmaceutical firm said its Truqap treatment for patients with advanced hormone receptor positive breast cancer, in combination with Faslodex, has been approved by the US Food & Drug Administration.

This follows the results from its CapItello-291 phase 3 trial published earlier this year, which showed reduced risk of disease progression or death by 50% compared to Faslodex alone.

AstraZeneca Executive Vice President, Oncology Business Unit Dave Fredrickson commented: "The rapid US approval of Truqap reinforces the important role of the PI3K/AKT pathway in HR-positive breast cancer and the critical need to test patients at the time of diagnosis, as up to fifty per cent have tumours with these alterations. As a first-in-class medicine, this approval provides a critical new option for patients in the US with this specific type of disease and we look forward to bringing Truqap to the many breast cancer patients who can benefit across the globe."

Oil majors were up despite recent falls in oil prices, as oil prices improved slightly. BP rose 1.1%, while Shell was up 0.2%.

Brent oil was quoted at USD77.52 a barrel early in London on Friday, higher than USD77.44 late Thursday.

In London's FTSE 250, FirstGroup rose 3.2%.

The transport company said it agreed to a strategic decarbonisation partnership with Hitachi, forming a new 50:50 joint venture called NextGen AssetCo.

NextGen AssetCo will purchase up to 1,000 electric bus vehicles valued at around GBP100 million as part of First Bus' expanding electric bus fleet.

FirstGroup anticipates this will contribute around GBP3 million annually to its adjust earnings by its financial 2026 before any operational benefits.

FirstGroup CEO Graham Sutherland commented: "The pioneering alliance with Hitachi is a major strategic partnership for the group as we progress towards our ambitious 2035 decarbonisation target for our bus fleet. It will allow us to continue the electrification of our fleet and depots with increased efficiency and greater visibility of our financial commitment, and unlike other possible arrangements, we will retain much of the residual value in the batteries as they are taken off our buses."

Among London's small-caps, Record lost 10%.

In the six months that ended September 30, the currency and derivatives manager said pretax profit fell 16% to GBP6.3 million from GBP7.5 million a year earlier.

This tracked revenue falling 2.7% to GBP21.5 million from GBP22.1 million, although it still upped its interim dividend by 4.9% to 2.15 pence per share from 2.05p.

Record also said CEO Leslie Hill will retire in March after 31 years at the company and four years as CEO. Jan Witte will succeed Hill and be appointed onto the board as CEO-elect on January 1, with the intention of being formally appointed as CEO on April 1.

Witte is currently CEO of two Record subsidiaries Record Currency Management and Record Asset Management.

On AIM, Jersey Oil & Gas surged 14%, after it noted that it and NEO Energy, the owners of the Buchan field licences, have agreed to acquire the Western Isles floating production, storage and offloading vessel, which will be used as the processing facility for the planned redevelopment of the Buchan field.

Jersey Oil & Gas said it will receive a USD9.4 million cash payment from NEO under the terms of its farm-out transaction announced in April regarding a milestone payment on finalisation of the Greater Buchan Area development solution.

In Asia, the Nikkei 225 index in Tokyo closed up 0.5%. In China, the Shanghai Composite closed up 0.1%, while the Hang Seng index in Hong Kong closed down 2.1%. The S&P/ASX 200 in Sydney closed down 0.1%.

In the US on Thursday, Wall Street ended muted, with the Dow Jones Industrial Average down 0.1%, while the S&P 500 and the Nasdaq Composite both ending up 0.1%

Gold was quoted at USD1,986.71 an ounce early in London on Friday from USD1,983.48 late Thursday.

Still to come on Friday's economic calendar, a eurozone inflation reading is released at 1000 GMT.

By Greg Rosenvinge, Alliance News senior reporter

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