London open: Stocks rise as markets mull weak data, rate hike expectations
Stocks are holding onto early gains despite the release of data showing a fourth consecutive monthly drop in UK retail sales - their worst stretch since 1996 - which led some economists to question just how soon the Bank of England might be ready to raise interest rates.
Those figures arrived as investors waited on the expiry of quarterly financial derivatives contracts on US indices and individual stocks, an event known as 'quadruple witching', later on Friday, which was often preceded by market volatility in the days and weeks running up to it.
As of 0857 BST, the FTSE 100 was up by 0.35% or 24.77 points at 7,052.40.
The second-tier index meanwhile was near its session highs, climbing 0.53% or 126.27 points to 23,759.06.
Commenting on the mood in markets, Michael Hewson, chief market analyst at CMC Markets UK, told clients: "While European markets managed to post modest gains yesterday it is becoming increasingly apparent that there is little in the way of direction for equity markets at the moment.
"Investors are increasingly looking for a narrative, whether it be positive or negative to drive the next move, and are coming up empty handed.
"That’s not to say there isn’t anything to be concerned about, there are a number of things. Rising prices, debates about whether inflation is transitory, or persistent, whether the global economy is slowing, and whether central banks can look at tapering their bond buying programs, without sending ripples through the market."
Earlier, the Office for National Statistics reported a 0.9% month-on-month drop in UK retail sales volumes, which easily undershot economists' forecasts a rise of 0.5% and left the annual rate of growth at zero.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said "the near-term outlook for households’ spending is overcast".
Combined with a host of other expected headwinds for the UK consumer, those numbers "should" make investors doubt the Monetary Policy Committee's ability to hike Bank Rate as soon as February, he added.
Among the headwinds that Tombs was anticipating were the a jump in CPI inflation to about 4.0%, the closure of the government's furlough scheme, the withdrawal of the £20 uplift to Universal Credit, the increase in National Insurance and still high levels of Covid-19 infections.
Later in the session, the market spotlight was expected to shift towards consumers on the other side of the Pond, with the University of Michigan set to publish the preliminary results of its consumer confidence survey for September.
On the broker front, analysts at Berenberg upgraded their recommendation for shares of InterContinental Hotels from 'hold' to 'buy' and Barclays' theirs for StanChart from 'underweight' to 'equalweight'.
Hurricane Energy stirs up a buying storm
Shares of Hurricane Energy jumped after the oil exploration said in an operational update that, as of 15 September, the Lancaster field was producing at a rate of nearly 10,800 barrels per day from the P6 well alone. It also reported a jump in its net free cash position from $122m as of 31 July to $144m by 31 August.
Martin Sorrell's digital-only advertising group S4 Capital said it was buying technology services company Zemoga for an undisclosed sum. Sorrell, who founded ad giant WPP, said the move was a “significant first step towards building a third practice area around technology services”. Zemoga provides product design, engineering and delivery services to clients including Bridgestone, Sony, Roku and Morningstar, he added.
Virgin Wines UK has entered into a marketing partnership with Moonpig Group to launch a range of products with the UK's leading online greeting card and gifting platform. The UK's largest direct-to-consumer online wine retailer said it woud launch a range of 32 different wines as part of the first of a kind partnership with Moonpig.
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG) 147.50p 3.54%
Informa (INF) 542.40p 2.96%
Rolls-Royce Holdings (RR.) 111.40p 2.15%
HSBC Holdings (HSBA) 376.70p 2.11%
BT Group (BT.A) 157.45p 1.78%
Fresnillo (FRES) 830.60p 1.74%
Antofagasta (ANTO) 1,457.00p 1.64%
Burberry Group (BRBY) 1,813.50p 1.63%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,444.00p 1.54%
Halma (HLMA) 3,086.00p 1.38%
FTSE 100 - Fallers
Anglo American (AAL) 2,721.00p -3.46%
Rio Tinto (RIO) 4,896.00p -2.28%
BHP Group (BHP) 1,935.40p -1.67%
Ashtead Group (AHT) 6,070.00p -1.49%
JD Sports Fashion (JD.) 1,126.00p -1.40%
Mondi (MNDI) 1,952.00p -0.96%
London Stock Exchange Group (LSEG) 8,072.00p -0.84%
Taylor Wimpey (TW.) 169.90p -0.50%
Prudential (PRU) 1,456.00p -0.41%
Smith & Nephew (SN.) 1,345.50p -0.41%
FTSE 250 - Risers
Wickes Group (WIX) 249.00p 4.97%
Virgin Money UK (VMUK) 200.70p 4.02%
Restaurant Group (RTN) 109.60p 3.98%
TUI AG Reg Shs (DI) (TUI) 296.50p 3.82%
C&C Group (CDI) (CCR) 240.20p 3.53%
SSP Group (SSPG) 263.80p 3.45%
Micro Focus International (MCRO) 388.60p 2.75%
Hochschild Mining (HOC) 147.70p 2.29%
Syncona Limited NPV (SYNC) 187.00p 2.19%
Dechra Pharmaceuticals (DPH) 5,080.00p 2.09%
FTSE 250 - Fallers
Trustpilot Group (TRST) 374.60p -3.90%
Harbour Energy (HBR) 365.80p -2.51%
Dr. Martens (DOCS) 394.60p -2.08%
Oxford Biomedica (OXB) 1,508.00p -2.08%
BlackRock World Mining Trust (BRWM) 523.00p -2.06%
Tullow Oil (TLW) 44.80p -1.17%
easyJet (EZJ) 600.60p -0.99%
Britvic (BVIC) 904.50p -0.93%
Lancashire Holdings Limited (LRE) 604.50p -0.90%
Synthomer (SYNT) 505.00p -0.88%