London close: Stocks weaker as investors mull economic data

London’s top-flight index ended in the red on Friday, as investors mulled over a raft of economic data, with sterling under the cosh after the EU blamed the UK for deadlocked Brexit talks.

The FTSE 100 ended the session down 0.19% at 6,001.89, while the FTSE 250 was up 0.46% at 17,577.68.

Sterling was weaker against both of its major trading pairs, last falling 0.91% on the dollar to $1.3094, and losing 0.17% against the euro to €1.1123.

Earlier, the EU’s chief Brexit negotiator, Michel Barnier, said a post-Brexit trade deal "seems unlikely" and that he was "concerned" after the latest round of negotiations.

Meanwhile, UK Brexit negotiator David Frost said there had been "little progress".

Investors were also sinking their teeth into a deluge of data releases.

A survey from the Confederation of British Industry showed the downturn in the manufacturing sector eased in the three months to August but orders books remain "severely depressed".

The CBI’s total orders balance came in at -44 in August, up from -46 in July but worse analysts’ expectations for a balance of -34.

Export order books improved slightly from July but remain far below their long-run average.

The survey found that output declined in 16 out of 17 sub-sectors, with the headline drop driven mainly by the mechanical engineering, food, drink & tobacco, and motor vehicles & transport equipment sub-sectors.

“This has been another difficult month for manufacturers,” said CBI deputy chief economist Anna Leach.

“Activity continues to be poor and order books severely depressed, although the worst of the decline seems to be behind us.”

Leach said it was a relief to see the pressure on manufacturers starting to ease.

“As the sector looks to rebuild from the economic shock, the Government must consider additional ways to support this sector to help reinforce a recovery, such as grants and further business rates relief.”

Figures released earlier by the Office for National Statistics showed retail sales rose above pre-pandemic levels in July.

Sales were up 3.6% on the month, down from a 13.9% surge in June and a 12% increase in May but coming in ahead of expectations for a 2% increase.

The ONS said sales are now 3% above pre-pandemic levels in February 2020.

On the year, retail sales rose 1.4% in July following a 1.6% decline in June, versus expectations for a flat reading.

“Retail sales have now regained all the ground lost during the height of the coronavirus restrictions as more stores open for trade and online sales remain at historically high levels,” said ONS deputy national statistician for Economic Statistics, Jonathan Athow.

“While still below their pre-pandemic levels, both fuel and clothing sales continued to recover. Meanwhile, food sales fell back from their recent peaks as people started to venture back into pubs and restaurants.”

Separate data from the ONS showed government debt exceeded £2trn in July for the first time as spending rose due to the pandemic.

Debt at the end of July stood at £2.004bn, up £227.6bn compared to the same month last year.

That debt represented 100.5% of gross domestic product, an increase of 20.4 percentage points compared with this time last year and the first time it has been above 100% since 1961.

Borrowing in July was £26.7bn, up £28.3bn on the year and the fourth highest borrowing in any month since records began in 1993.

Borrowing in April to July was £150.5bn, up £128.4bn compared to the same period last year and marking the highest borrowing in any April to July period on record.

The figure is close to the deficit for the whole of 2009/10 of £158.3bn, which was previously the largest cash deficit in history.

Capital Economics economist Ruth Gregory said that reflected "the extraordinary fiscal support the government has put in place to see the economy through the crisis".

Corporate news was scarce, but AstraZeneca closed 1.31% lower despite saying that Imfinzi has been approved in Japan for the treatment of patients with extensive-stage small cell lung cancer (ES-SCLC), in combination with etoposide plus a choice of platinum chemotherapy.

Oilfield services company Petrofac was 5.65% weaker after a downgrade to ‘market perform’ from ‘outperform’ at Bernstein, while DCC was knocked 1.92% lower by a downgrade to ‘equal weight’ from ‘overweight’ at Barclays.

Precious metals miners Fresnillo, Polymetal and Hochschild fell, by 0.88%, 0.31% and 5.82%, respectively, as gold prices weakened.

Market Movers

FTSE 100 (UKX) 6,001.89 -0.19%
FTSE 250 (MCX) 17,577.68 0.46%
techMARK (TASX) 3,770.99 -0.57%

FTSE 100 - Risers

InterContinental Hotels Group (IHG) 4,280.00p 6.20%
GVC Holdings (GVC) 786.20p 5.05%
Compass Group (CPG) 1,163.50p 2.96%
Whitbread (WTB) 2,398.00p 2.83%
Land Securities Group (LAND) 570.80p 2.29%
Scottish Mortgage Inv Trust (SMT) 930.50p 2.03%
Flutter Entertainment (FLTR) 12,260.00p 1.74%
International Consolidated Airlines Group SA (CDI) (IAG) 193.20p 1.42%
British Land Company (BLND) 360.60p 1.29%
Avast (AVST) 538.50p 1.13%

FTSE 100 - Fallers

Smith & Nephew (SN.) 1,488.00p -2.36%
DCC (DCC) 6,636.00p -1.92%
ITV (ITV) 60.14p -1.89%
Coca-Cola HBC AG (CDI) (CCH) 2,018.00p -1.85%
Hikma Pharmaceuticals (HIK) 2,359.00p -1.51%
Standard Life Aberdeen (SLA) 242.20p -1.38%
Standard Chartered (STAN) 391.90p -1.38%
AstraZeneca (AZN) 8,437.00p -1.31%
Smith (DS) (SMDS) 265.30p -1.27%
BT Group (BT.A) 101.80p -1.26%

FTSE 250 - Risers

HGCapital Trust (HGT) 272.50p 8.78%
Calisen (CLSN) 178.15p 7.61%
Polypipe Group (PLP) 425.00p 7.32%
Bank of Georgia Group (BGEO) 926.00p 7.05%
Watches of Switzerland Group (WOSG) 322.50p 6.97%
National Express Group (NEX) 137.00p 6.45%
Mitchells & Butlers (MAB) 168.80p 5.50%
FirstGroup (FGP) 40.06p 5.42%
Provident Financial (PFG) 189.10p 5.41%
Cineworld Group (CINE) 51.14p 4.95%

FTSE 250 - Fallers

Hochschild Mining (HOC) 236.20p -5.82%
Petrofac Ltd. (PFC) 165.20p -5.65%
Aggreko (AGK) 456.20p -4.32%
Royal Mail (RMG) 188.90p -3.13%
Ferrexpo (FXPO) 186.50p -3.07%
Pets at Home Group (PETS) 282.00p -2.56%
Petropavlovsk (POG) 31.10p -2.51%
Chemring Group (CHG) 234.50p -2.49%
4Imprint Group (FOUR) 2,080.00p -2.35%
Network International Holdings (NETW) 388.20p -2.27%