London midday: Stocks fall amid Covid worries, after retail sales data

(Sharecast News) - London stocks had fallen into the red by midday 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 was down 0.6% at 6,757.61.

Richard Hunter, head of markets at Interactive Investor, said: "The arguably important psychological level of 7,000 for the FTSE100 remains out of reach for now, as the index has faltered slightly after a sparkling start to the year.

"Even so, the index is still ahead by 5% overall in the first few days of trading this year, although the wider concerns being felt by many economies as another lockdown bites have taken some of the shine off sentiment."

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 faces 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 guest" 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 even as it reported a better first-half performance than it had been expecting, as the group continues to benefit from Covid-19 restrictions and lockdowns.

CMC Markets analyst Michael Hewson said: "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."

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

Going the other way, B&Q owner Kingfisher rallied 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 at January 4.

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

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

Market Movers

FTSE 100 (UKX) 6,757.61 -0.60%
FTSE 250 (MCX) 20,714.91 -0.29%
techMARK (TASX) 4,115.38 -0.89%

FTSE 100 - Risers

Kingfisher (KGF) 287.30p 2.79%
International Consolidated Airlines Group SA (CDI) (IAG) 157.10p 2.78%
Lloyds Banking Group (LLOY) 36.99p 2.27%
Barclays (BARC) 154.02p 1.87%
InterContinental Hotels Group (IHG) 4,824.00p 1.79%
Avast (AVST) 540.50p 1.79%
Whitbread (WTB) 3,074.00p 1.55%
Glencore (GLEN) 274.40p 1.42%
Royal Dutch Shell 'B' (RDSB) 1,426.40p 1.35%
Standard Life Aberdeen (SLA) 302.20p 1.34%

FTSE 100 - Fallers

Fresnillo (FRES) 1,144.00p -2.97%
Hikma Pharmaceuticals (HIK) 2,587.00p -2.63%
Reckitt Benckiser Group (RB.) 6,386.00p -2.59%
Spirax-Sarco Engineering (SPX) 11,340.00p -2.58%
Scottish Mortgage Inv Trust (SMT) 1,211.00p -2.57%
Berkeley Group Holdings (The) (BKG) 4,530.00p -2.31%
Relx plc (REL) 1,827.50p -2.17%
Experian (EXPN) 2,772.00p -2.15%
Unilever (ULVR) 4,321.00p -2.15%
National Grid (NG.) 859.80p -2.03%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 339.80p 46.01%
Gamesys Group (GYS) 1,318.00p 4.94%
TI Fluid Systems (TIFS) 237.60p 4.55%
Playtech (PTEC) 469.60p 4.54%
National Express Group (NEX) 258.80p 3.19%
Rank Group (RNK) 143.80p 3.16%
Hammerson (HMSO) 22.68p 2.53%
Cineworld Group (CINE) 66.50p 2.31%
Hilton Food Group (HFG) 1,104.00p 2.22%
IWG (IWG) 355.80p 2.18%

FTSE 250 - Fallers

Games Workshop Group (GAW) 10,740.00p -7.65%
Clarkson (CKN) 2,790.00p -2.96%
Biffa (BIFF) 232.00p -2.93%
FDM Group (Holdings) (FDM) 1,058.00p -2.76%
AO World (AO.) 407.00p -2.51%
Chemring Group (CHG) 293.50p -2.49%
Countryside Properties (CSP) 431.20p -2.44%
OSB Group (OSB) 427.80p -2.24%
Redrow (RDW) 538.50p -2.18%
IntegraFin Holding (IHP) 542.00p -2.17%