London midday: Stocks extend losses after disappointing retail sales; Burberry rallies
By Michele Maatouk
Date: Thursday 14 Nov 2019
(Sharecast News) - London stocks had extended losses by midday on Thursday following the release of disappointing retail sales data, but luxury fashion brand Burberry rallied on the back of well-received interim results.
The FTSE 100 was 0.5% lower at 7,317.60, while the pound was down 0.1% against the dollar at 1.2845 and 0.1% firmer versus the euro at 1.1685.
Figures released earlier by the Office for National Statistics showed that retail sales unexpectedly fell in October.
Retail sales dipped 0.1% on the month following a flat reading in September, missing expectations for a 0.2%.
On the year, sales were up 3.1% in October, in line with the previous month but below expectations for a 3.7% jump.
In the three months to October, retail sales ticked up 0.2% compared to the previous three months, marking the lowest growth since April 2018.
An ONS spokesperson said: "Retail sales increased at a slower rate in the latest three months, with growth the weakest seen since April of last year. All main sectors saw falling sales apart from food shops.
"Department store sales rebounded in October, driven by promotional events and an earlier introduction of Christmas lines. However, their sales still remain significantly down over the longer term."
Thomas Pugh, UK economist at Capital Economics, said: "Admittedly, consumers could just be holding off on purchases ahead of 'Black Friday' discounts in November, which are poorly captured in the ONS seasonal adjustment process. But at least some of last month's weakness may reflect the recent weakness in the labour market with fewer people in employment and wage growth slowing, consumers may feel less flush. Overall, it is increasingly clear that the risks to our forecast for GDP growth of 0.2% q/q in Q4 appear on the downside."
Elsewhere, the latest survey from the Royal Institution of Chartered Surveyors revealed that UK house prices fell in October as buyers and sellers opted to sit tight amid political uncertainty.
The net balance of surveyors reporting that house prices had risen over the last three months slipped to -5 from -3 in September, coming in a touch below consensus expectations for an unchanged reading.
More broadly, investors continued to keen an eye on trade relations between the US and China following reports late on Wednesday that talks between the two nations were stalling because of disagreements over agricultural purchases.
In equity markets, private equity firm 3i Group was the worst performer on the FTSE 100 as it posted a 10% total return for the first half of the year but said it had maintained its "cautious" positioning on new investment.
FirstGroup slumped as it said losses in the first half widened and that the formal sale process for its Greyhound business was "well advanced".
Sainsbury's, GlaxoSmithKline, Royal Dutch Shell, Bunzl and Marks & Spencer were all in the red as their stock went ex-dividend.
On the upside, Burberry was sitting pretty at the top of the FTSE 100 after posting a jump in interim profit and revenue and backing its full-year guidance despite "considerable" disruptions in Hong Kong. Investors also welcomed news that the company had entered into an exclusive partnership with Chinese technology group Tencent to develop "social retail" in China.
Qinetiq gained as the defence technology firm reported an increase in first-half profit and revenue as orders grew, while Premier Oil gushed higher as it said annual production would be at the upper end of its previous guidance.
Market Movers
FTSE 100 (UKX) 7,317.60 -0.46%
FTSE 250 (MCX) 20,278.42 -0.06%
techMARK (TASX) 4,008.67 -0.17%
FTSE 100 - Risers
Burberry Group (BRBY) 2,142.00p 3.98%
Coca-Cola HBC AG (CDI) (CCH) 2,566.00p 2.52%
Hiscox Limited (DI) (HSX) 1,273.00p 1.92%
Land Securities Group (LAND) 898.60p 1.54%
Meggitt (MGGT) 627.80p 1.03%
Carnival (CCL) 3,232.00p 1.00%
Taylor Wimpey (TW.) 168.00p 0.99%
Barratt Developments (BDEV) 646.20p 0.97%
British Land Company (BLND) 560.60p 0.79%
Barclays (BARC) 172.18p 0.76%
FTSE 100 - Fallers
3i Group (III) 1,060.00p -5.78%
Fresnillo (FRES) 630.20p -3.90%
DCC (DCC) 6,620.00p -3.78%
Evraz (EVR) 357.70p -2.27%
Smiths Group (SMIN) 1,631.00p -2.22%
Auto Trader Group (AUTO) 525.40p -2.16%
Croda International (CRDA) 4,804.00p -1.76%
Halma (HLMA) 1,879.00p -1.70%
JD Sports Fashion (JD.) 742.60p -1.69%
Vodafone Group (VOD) 162.26p -1.68%
FTSE 250 - Risers
QinetiQ Group (QQ.) 337.80p 4.91%
Sirius Minerals (SXX) 3.30p 3.45%
Oxford Instruments (OXIG) 1,550.00p 3.33%
Aston Martin Lagonda Global Holdings (AML) 501.00p 3.30%
Premier Oil (PMO) 88.96p 2.63%
Wizz Air Holdings (WIZZ) 3,838.00p 2.35%
Bakkavor Group (BAKK) 125.00p 2.29%
Wood Group (John) (WG.) 368.20p 2.22%
Capital & Counties Properties (CAPC) 257.50p 2.14%
Grafton Group Units (GFTU) 806.00p 2.03%
FTSE 250 - Fallers
FirstGroup (FGP) 104.00p -19.57%
TBC Bank Group (TBCG) 1,322.00p -5.03%
Airtel Africa (AAF) 67.50p -4.26%
Card Factory (CARD) 149.00p -3.87%
Electrocomponents (ECM) 632.00p -2.29%
Go-Ahead Group (GOG) 2,064.00p -2.27%
Syncona Limited NPV (SYNC) 224.50p -2.18%
Spectris (SXS) 2,648.00p -1.85%
BBA Aviation (BBA) 299.80p -1.70%
Greggs (GRG) 2,078.00p -1.70%
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