London midday: Stocks in the black after retail sales

(Sharecast News) - London stocks were in the black by midday on Friday as investors digested the latest UK retail sales and borrowing data.
The FTSE 100 was up 0.6% at 6,373.78.

IG said: "Tentative European gains this morning appear to maintain the ongoing consolidation phase, as markets tread water in the wake of the vaccine boost seen over the past two Mondays. From a UK perspective, plenty rides on the outcome of the AstraZeneca vaccine trials given the oversized nature of the pre-order compared with the likes of Pfizer and Moderna.

"Rishi Sunak has taken the first steps in attempting to address the budget imbalances by announcing a freeze on public sector pay. However, with the chancellor having over £200 billion in financial support over the course of the year, there are fears that today's public sector pay freeze is just the tip of the iceberg. UK retail sales provided a timely boost ahead of the impending Black Friday sales, with October sales up 5.8% on those seen a year earlier."

Figures released earlier by the Office for National Statistics showed retail sales rose for the sixth consecutive month in October, underpinned by the online segment, while government borrowing hit its highest level on record for that month but was still lower than expected.

Public sector net borrowing was £22.3bn in October, up £10.8bn from the same month last year and marking the sixth-highest borrowing in any month since records began in 1993, as the government continued to spend amid the pandemic. However, it was lower than the consensus forecast of £37.2bn.

Separate figures from the ONS showed retail sales rose 1.2% on the month in October, down from 1.5% growth in September but ahead of expectations for no growth. On the year, sales were 5.8% higher, coming in ahead of expectations for a 4.2% increase.

Deputy national statistician for Economic Statistics Jonathan Athow said: "Despite the introduction of some local lockdowns in October, retail sales continued its recent run of strong growth.

"Feedback from shops suggested some consumers may have brought forward their Christmas shopping, ahead of potential further restrictions. Online stores also saw strong sales, boosted by widespread offers.

"However, the slow recovery in clothing sales has stalled after five consecutive months of increased sales."

Capital Economics said: "The decent rise in retail sales in October and the smaller increase in government borrowing suggests that the economy held up better than expected when the Covid-19 tiered restrictions were being implemented.

"But the second lockdown that began in November will probably prompt retail sales to fall again and public borrowing to rise faster."

In equity markets, BAE Systems was the standout gainer, boosted by news of a £16.5bn increase in defence spending.

Hargreaves Lansdown was a high riser after Barclays said in a note that it was one of its favoured names in the investment platform sector.

Croda International was lifted by an upgrade to 'buy' at Citi, which said the company has "a good nose for attractive deals" following its recent acquisition of emerging markets focused fragrance player Iberchem.

On the downside, accounting software firm Sage slumped even after it lifted its dividend as it reported an 8.5% rise in organic recurring revenue rose to £1.6bn, driven by growth from existing and new customers, principally in North America and Northern Europe. Micro Focus also lost ground.

Helios Towers tumbled after Millicom Holding sold 52 million shares in the telecommunications company - a 5.2% stake - at 155p each. This represents an 11.6% discount to the closing share price on Thursday.

Johnson Matthey was knocked lower by a downgrade to 'reduce' at AlphaValue.

Market Movers

FTSE 100 (UKX) 6,373.78 0.62%
FTSE 250 (MCX) 19,553.55 0.24%
techMARK (TASX) 3,972.09 0.23%

FTSE 100 - Risers

BAE Systems (BA.) 526.40p 3.66%
Pearson (PSON) 658.40p 3.04%
Antofagasta (ANTO) 1,128.00p 2.83%
Hargreaves Lansdown (HL.) 1,508.50p 2.72%
Taylor Wimpey (TW.) 171.65p 2.48%
Smiths Group (SMIN) 1,567.00p 2.38%
JD Sports Fashion (JD.) 819.60p 2.25%
Rentokil Initial (RTO) 526.80p 2.17%
AstraZeneca (AZN) 8,300.00p 2.15%
Croda International (CRDA) 6,376.00p 2.05%

FTSE 100 - Fallers

Sage Group (SGE) 589.60p -13.27%
Smurfit Kappa Group (SKG) 3,142.00p -2.48%
Intermediate Capital Group (ICP) 1,679.00p -2.38%
BT Group (BT.A) 125.30p -2.11%
Johnson Matthey (JMAT) 2,364.00p -1.83%
British Land Company (BLND) 472.50p -1.58%
Tesco (TSCO) 232.70p -1.44%
Smith (DS) (SMDS) 323.10p -1.19%
Homeserve (HSV) 1,163.00p -1.11%
Imperial Brands (IMB) 1,492.00p -0.86%

FTSE 250 - Risers

Energean (ENOG) 719.90p 6.09%
TUI AG Reg Shs (DI) (TUI) 444.70p 5.30%
Aston Martin Lagonda Global Holdings (AML) 72.90p 4.59%
Cineworld Group (CINE) 46.12p 4.34%
Hill & Smith Holdings (HILS) 1,338.00p 2.92%
Marks & Spencer Group (MKS) 134.55p 2.91%
Redrow (RDW) 564.50p 2.82%
Wood Group (John) (WG.) 274.30p 2.77%
Future (FUTR) 2,005.00p 2.72%
Dixons Carphone (DC.) 114.10p 2.61%

FTSE 250 - Fallers

Helios Towers (HTWS) 155.00p -11.63%
Micro Focus International (MCRO) 332.10p -5.03%
Workspace Group (WKP) 676.00p -3.77%
UK Commercial Property Reit Limited (UKCM) 73.50p -2.78%
Derwent London (DLN) 3,152.00p -2.72%
Shaftesbury (SHB) 530.50p -2.66%
Vivo Energy (VVO) 86.40p -2.59%
Ninety One (N91) 228.00p -2.40%
ITV (ITV) 93.88p -2.23%
Capital & Counties Properties (CAPC) 137.10p -2.07%