London midday: Stocks little changed after retail sales; S&N rallies

Thu 20 Feb 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks were little changed by midday on Thursday as worries about the coronavirus crept in, although there was some good news in the form of stronger-than-expected retail sales figures.
The FTSE 100 was up just 0.1% at 7,463.02.

Sentiment got a boost after the People's Bank of China cut the one-year loan prime rate to 4.05% from 4.15% and the five-year rate to 4.75% from 4.80%. However, the potential impact of the coronavirus was never far from investors' minds as Japan reported two deaths and cases in South Korea more than doubled.

On home turf, figures from the Office for National Statistics showed that retail sales rose more than expected in January as shoppers loosened their purse strings after the general election result reduced near-term uncertainty.

Retail volumes rose 0.9% from December boosted mainly by food sales. The average economist's forecast was for a 0.7% increase.

In the three months to January retail purchases fell 0.8% from the previous period with declines across all sectors. The three-month figures include the whole of the Christmas and post-Christmas trading period but the January result appears to reflect a short-term boost caused by the Conservatives' emphatic election victory in December, which allowed Brexit to pass.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the January figure showed retail snapping back after politics-related weakness in the fourth quarter of 2019. Food store sales rose 1.7%, non-food store sales were up 1.3% and non-store sales rose 2.5%. Petrol sales fell 5.7%.

"January's official retail sales figures confirm that the decisive general election has released the handbrake of political uncertainty on consumers' spending," Tombs said.

Despite the upbeat data, sterling continued to lose ground against the dollar, trading down 0.4% at 1.2886. Spreadex analyst Connor Campbell pointed out that tensions between the UK and the EU were showing no signs of abating. "Brussels has accused Boris Johnson of 'below the belt' trade tactics - not great given that negotiations start in March," he said.

In equity markets, Smith & Nephew was the standout gainer as the artificial hip and knee maker said full-year revenue grew 4.4%, at the top end of the guidance range, but that its outlook will depend on the coronavirus.

Lloyds gained even as the bank said underlying profit fell 7% last year as revenue declined in challenging conditions.

BAE Systems was in the green as it reported full-year earnings growth of 7%, in line with its own guidance, and forecast a rise in earnings in 2021 by mid-single digit, excluding the impact of recent US acquisitions.

Price comparison website surged to the top of the FTSE 250 after it posted a rise in full-year profit as solid performance from the home services and insurance businesses offset a weaker showing in the money segment.

Spectris rallied after reporting a jump in full-year operating profit and ?175m special dividend, but saying it was seeing less activity in China due to the coronavirus and expects "challenging" markets in the first half of the current year.

Builders' merchant Travis Perkins was boosted by an upgrade to 'buy' at Citi and gold miner Centamin shone after BMO reinstated the stock at 'outperform'.

On the downside, Imperial Brands, Carnival, Unilever and GlaxoSmithKline were all weaker as their stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 7,463.02 0.08%
FTSE 250 (MCX) 21,909.82 0.27%
techMARK (TASX) 4,176.89 0.23%

FTSE 100 - Risers

Smith & Nephew (SN.) 1,988.00p 7.75%
NMC Health (NMC) 834.80p 6.62%
Lloyds Banking Group (LLOY) 57.80p 3.62%
Smith (DS) (SMDS) 361.10p 2.91%
Johnson Matthey (JMAT) 2,786.00p 2.73%
BAE Systems (BA.) 656.00p 2.50%
Antofagasta (ANTO) 872.40p 2.06%
Anglo American (AAL) 2,126.50p 1.84%
Barclays (BARC) 179.88p 1.78%
Centrica (CNA) 76.10p 1.58%

FTSE 100 - Fallers

Imperial Brands (IMB) 1,733.00p -6.02%
Aveva Group (AVV) 5,100.00p -3.59%
Burberry Group (BRBY) 1,943.00p -3.48%
Meggitt (MGGT) 623.60p -2.13%
Sage Group (SGE) 781.80p -1.61%
GlaxoSmithKline (GSK) 1,651.40p -1.59%
United Utilities Group (UU.) 1,044.50p -1.56%
Coca-Cola HBC AG (CDI) (CCH) 2,818.00p -1.50%
Unilever (ULVR) 4,565.50p -1.29%
National Grid (NG.) 1,055.20p -1.14%

FTSE 250 - Risers Group (MONY) 346.20p 11.75%
TBC Bank Group (TBCG) 1,400.00p 6.87%
Spectris (SXS) 2,892.00p 5.70%
Hochschild Mining (HOC) 191.00p 5.41%
Cineworld Group (CINE) 184.10p 4.22%
Kaz Minerals (KAZ) 529.60p 4.05%
Royal Mail (RMG) 181.25p 4.05%
Ferrexpo (FXPO) 158.35p 3.70%
Vesuvius (VSVS) 456.20p 3.68%
Equiniti Group (EQN) 224.80p 3.59%

FTSE 250 - Fallers

Restaurant Group (RTN) 129.10p -3.08%
BBGI SICAV S.A. (DI) (BBGI) 164.00p -2.09%
Watches of Switzerland Group (WOSG) 370.20p -2.06%
NextEnergy Solar Fund Limited Red (NESF) 117.25p -1.88%
Pennon Group (PNN) 1,180.00p -1.87%
Renishaw (RSW) 4,002.00p -1.77%
4Imprint Group (FOUR) 3,360.00p -1.75%
AJ Bell (AJB) 394.00p -1.75%
Contour Global (GLO) 180.00p -1.64%
Oxford Instruments (OXIG) 1,626.00p -1.33%
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