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London midday: Stocks maintain losses but pound ticks up after retail sales

By Michele Maatouk

Date: Thursday 18 Jul 2019

London midday: Stocks maintain losses but pound ticks up after retail sales

(Sharecast News) - London stocks were still weaker by midday on Thursday amid ongoing worries about Sino-US trade relations, while sterling ticked higher on the back of better-than-expected UK retail sales data.
The FTSE 100 was off lows but still in the red, down 0.3% at 7,513.44, with the downbeat tone attributed in part to a Wall Street Journal article suggesting that US-China trade talks have stalled due to Huawei.

Spreadex analyst Connor Campbell said: "The White House is trying to figure out how to handle Beijing's demands regarding de-black listing the smartphone maker, apparently the key reason why there has been so little movement since the latest truce was announced in Osaka."

Overnight results from Netflix also weighed on sentiment, as the company's quarterly subscriber growth disappointed.

On home turf, there was some good news in the form of solid retail sales figures, which boosted the pound. Sterling rose 0.4% against the dollar to 1.2479 and 0.5% versus the euro to 1.1128 as data from the Office for National Statistics showed retail sales picked up in June.

Sales rose 1% on the month in June, comfortably beating expectations for a 0.3% decline and compared to a 0.6% drop in May. On the year, sales grew 3.8%, up from 2.2% in May and better than expectations for a 2.6% increase.

In the three months to June, sales were up 0.7%, with growth across all sectors except food stores and department. Still, this was a slowdown from the 1.6% growth seen in the previous three-month period.

ONS head of retail sales Rhian Murphy said: "Retail sales growth slowed in the latest three months as food stores saw falling sales for the first time this year and department stores continued their steady decline.

"However, retail as a whole saw a return to growth in the month of June, mainly due to growth in non-food stores with increased sales in second hand goods, including charity shops and antiques."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the figures are a timely reminder that consumers aren't being haunted by the possibility of a no-deal Brexit, but are happy to spend the proceeds from rising growth in the real wages.

"Looking ahead, retail sales should retain their recent momentum. Wage growth hit an 11-year high in May, business surveys suggest the dip in employee numbers in the three months to May was just a blip and mortgage rates are set to fall modestly, thereby freeing up disposable income for homeowners when they refinance their loans."

In equity markets, equipment rental firm Ashtead was in the red after US peer United Rentals cut the top of its guidance range on Wednesday, while software company Sage was down after German software maker SAP's second-quarter profits missed expectations.

InterContinental Hotels and Whitbread were hit by downgrades to 'underperform' at RBC Capital Markets, while Greggs was lower after a downgrade 'reduce' by Peel Hunt.

Amigo Holdings was the worst performer on the FTSE 250 as its stock went ex-dividend.

Outside the FTSE 350, Asos shares tumbled after the online fashion retailer warned that annual pre-tax profit was now expected to come in at between £30m and £35m, down from £102m last year, pointing to issues at its new warehouses in Europe and the US.

On the upside, EI Group saw its shares surge after it agreed to be bought by Slug & Lettuce owner Stonegate for £1.3bn. The rest of the pub sector fizzed higher, with Mitchells & Butlers, Martston's and Greene King all up.

Vodafone rallied after the European Commission approved its €18bn bid for Liberty Global's cable networks in Germany and central Europe.

EasyJet flew higher as the budget airline hailed a "robust" third quarter, with revenue up 11%, while Hochschild Mining shone as it said it was "firmly on track" to meet full-year production.

Market Movers

FTSE 100 (UKX) 7,513.44 -0.29%
FTSE 250 (MCX) 19,553.51 -0.31%
techMARK (TASX) 3,673.49 -0.18%

FTSE 100 - Risers

British American Tobacco (BATS) 3,031.50p 3.64%
Centrica (CNA) 89.56p 1.61%
Vodafone Group (VOD) 127.80p 1.36%
Morrison (Wm) Supermarkets (MRW) 209.80p 1.30%
Severn Trent (SVT) 2,031.00p 1.30%
Associated British Foods (ABF) 2,350.00p 1.29%
Persimmon (PSN) 1,973.50p 1.18%
Imperial Brands (IMB) 2,120.00p 1.12%
SSE (SSE) 1,165.25p 1.06%
Standard Chartered (STAN) 717.60p 0.99%

FTSE 100 - Fallers

Fresnillo (FRES) 848.60p -5.18%
Johnson Matthey (JMAT) 3,081.00p -3.84%
Burberry Group (BRBY) 2,263.00p -3.50%
NMC Health (NMC) 2,238.00p -2.19%
Croda International (CRDA) 4,802.00p -2.00%
TUI AG Reg Shs (DI) (TUI) 766.00p -2.00%
Intertek Group (ITRK) 5,520.00p -1.78%
BP (BP.) 518.90p -1.72%
Ashtead Group (AHT) 2,229.00p -1.63%
Scottish Mortgage Inv Trust (SMT) 549.00p -1.26%

FTSE 250 - Risers

EI Group (EIG) 285.20p 38.58%
Hochschild Mining (HOC) 209.20p 3.16%
NewRiver REIT (NRR) 167.80p 2.69%
Spirent Communications (SPT) 166.20p 2.59%
Mitchells & Butlers (MAB) 305.00p 2.35%
Wetherspoon (J.D.) (JDW) 1,493.00p 1.91%
Dunelm Group (DNLM) 891.50p 1.71%
Marston's (MARS) 121.80p 1.50%
Syncona Limited NPV (SYNC) 237.00p 1.50%
Hilton Food Group (HFG) 954.00p 1.38%

FTSE 250 - Fallers

Amigo Holdings (AMGO) 173.40p -3.56%
Kainos Group (KNOS) 595.68p -3.30% Group (MONY) 389.10p -3.18%
Senior (SNR) 202.80p -2.78%
Avast (AVST) 336.60p -2.66%
Weir Group (WEIR) 1,435.00p -2.21%
Sirius Minerals (SXX) 15.75p -2.11%
Baillie Gifford Japan Trust (BGFD) 793.88p -1.99%
Aggreko (AGK) 800.60p -1.94%
Greggs (GRG) 2,429.04p -1.90%


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