London close: Stocks eke out only slight gains

London stocks managed to eke out only slight gains on Thursday, putting the brakes on a two week sell-off but unable to make any real headway as the pound ticked up on the back of the latest UK retail sales figures.

The FTSE 100 added 0.19% or 14.33 points to end at 7,386.94, while the pound was up 0.2% against the dollar to 1.31967 and 0.4% firmer versus the euro at 1.1210.

Data from the Office for National Statistics showed UK retail sales bounced back more than expected last month, although it also revealed the first annual decline in four and a half years, with the prognosis for the sector remaining grim amid the ongoing squeeze of household budgets.

UK retail sales volumes in October rose 0.3% month-on-month after a sharp fall the previous month that was revised up to 0.7% from 0.8%. The consensus forecast had been for a 0.1% rise at most.

Year on year, October's sales volumes were down 0.3%, against what was a strong month last year. This may have been less bad than the 0.4% drop the market expected but was down from the 1.3% rise this September and the lowest rate of growth since March 2013.

Oanda analyst Craig Erlam said: "UK retail sales data gave the pound a small boost this morning, despite the numbers themselves being far from desirable.

"While the slowdown in consumer spending comes as no surprise given the negative wage growth that has held the economy back since the start of the year, a worrying trend has formed that will likely weigh on economic output in the coming quarters. The pound may well have been given a small lift by today’s numbers but the reality is that the near-term impacts of the Brexit vote are being felt and there’s little to suggest the worst has passed."

The rise in the pound was holding back the FTSE compared to its peers, Erlam said, with European bourses finishing up by an average of 0.6%, while general weakness across the commodity space was another weight on the UK index.

In corporate news, EasyJet was flying highest after Dart Group, the owner of Jet2, posted a rise in first-half revenue and pre-tax profit.
Private equity firm 3i Group was up after it reported “continued progression” in its net asset value per share for the first half, rising to 652p from 604p at the start of the period and on track for year of strong growth.

British Land advanced as its net asset value increased 2.6% in the first half to 939p, which stands at a sizeable premium to its shares.
Merchant bank Close Brothers rallied as it reported a 1.4% rise in its loan book for the first quarter, saying it has made “a good start” to the year with continued strong profitability across all three divisions.

Centrica was boosted by an upgrade to 'buy' from 'reduce' at Kepler, while Aveva was higher after JPMorgan Cazenove lifted the stock to 'overweight' from 'neutral' and FirstGroup rose as RBC Capital upgraded it to 'sector perform' from 'underperform'.

On the downside, GKN suffered the heaviest losses after saying it has parted company with Kevin Cummings, who was due to step up to be chief executive at the aircraft and vehicle parts maker.

Royal Mail gave up early gains even as underlying profits improved in the first half of the year, though the costs of transforming the business saw reported operating profits plummet more than 80%.

Prudential was weaker despite saying that life insurance new business profit rose 17% in the first nine months of the year, reflecting higher sales and more favourable economic conditions.

Virgin Money was in the red despite saying it remains on track to meet financial targets for FY 2017 and announcing the launch of a new SME savings account in January 2018.

Qinetiq fell despite first-half revenues coming in more or less as expected.

TalkTalk was hit by a downgrade to 'sector perform' from 'outperform' at RBC Capital Markets, while funeral services providers Dignity slumped after a downgrade by Berenberg.

Spire Healthcare lost ground as Mediclinic said discussions with the group have continued, but no agreement has yet been reached on any of the key terms of an offer.

Market Movers

FTSE 100 (UKX) 7,386.94 0.19%
FTSE 250 (MCX) 19,850.00 0.80%
techMARK (TASX) 3,458.04 0.98%

FTSE 100 - Risers

Shire Plc (SHP) 3,744.00p 6.05%
Convatec Group (CTEC) 198.50p 4.58%
Paddy Power Betfair (PPB) 8,800.00p 4.58%
British Land Company (BLND) 618.50p 3.69%
easyJet (EZJ) 1,295.00p 3.52%
Micro Focus International (MCRO) 2,702.00p 2.50%
Babcock International Group (BAB) 759.50p 2.50%
Hargreaves Lansdown (HL.) 1,587.00p 2.39%
International Consolidated Airlines Group SA (CDI) (IAG) 601.50p 2.12%
3i Group (III) 916.50p 2.00%

FTSE 100 - Fallers

GKN (GKN) 296.00p -4.76%
Royal Dutch Shell 'A' (RDSA) 2,331.00p -2.94%
Mediclinic International (MDC) 578.50p -2.69%
Royal Dutch Shell 'B' (RDSB) 2,378.50p -2.36%
Experian (EXPN) 1,547.00p -2.34%
Fresnillo (FRES) 1,295.00p -2.26%
Marks & Spencer Group (MKS) 303.60p -1.59%
NMC Health (NMC) 2,718.00p -1.16%
Rolls-Royce Holdings (RR.) 897.00p -1.10%
BT Group (BT.A) 244.85p -0.93%

FTSE 250 - Risers

Hikma Pharmaceuticals (HIK) 1,021.00p 6.47%
Crest Nicholson Holdings (CRST) 525.50p 5.90%
Close Brothers Group (CBG) 1,386.00p 5.32%
Sophos Group (SOPH) 607.00p 4.93%
McCarthy & Stone (MCS) 163.50p 4.41%
Sirius Minerals (SXX) 26.05p 4.20%
Provident Financial (PFG) 900.00p 3.57%
Playtech (PTEC) 831.00p 3.36%
Workspace Group (WKP) 957.00p 3.35%
Nex Group (NXG) 589.50p 3.33%

FTSE 250 - Fallers

Dignity (DTY) 1,965.00p -9.24%
Spire Healthcare Group (SPI) 271.10p -8.60%
QinetiQ Group (QQ.) 204.30p -7.14%
TalkTalk Telecom Group (TALK) 168.20p -5.61%
Virgin Money Holdings (UK) (VM.) 260.60p -5.24%
Coats Group (COA) 82.75p -4.11%
Metro Bank (MTRO) 3,450.00p -3.58%
Polymetal International (POLY) 869.00p -3.28%
The Renewables Infrastructure Group Limited (TRIG) 103.50p -2.63%
Hochschild Mining (HOC) 226.80p -1.73%