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London open: Stocks tick higher ahead of retail sales; SSE and Unilever drop
London stocks nudged a touch higher on Thursday as the pound remained under pressure but off recent lows, with all eyes on the latest retail sales data and the new Brexit secretary’s first talks in Brussels later.
At 0830 BST, the FTSE 100 was up 0.1% to 7,681.92, while the pound was down 0.3% against the dollar at 1.3033 and 0.1% lower versus the euro at 1.1223, having fallen sharply on Wednesday on the back of stalling inflation.
On the data front, retail sales figures for June are due at 0930 BST.
London Capital Group analyst Lawler said: “With inflation sitting at a one year low and wage growth slipping, traders will be watching closely to see if some encouragement for an August rate hike can be drawn from retail sales data.
“Expectations are not that great, fitting in nicely with the running theme for UK data this week.”
On a monthly basis, retail sales are expected to have increased by 0.2%, compared to April’s 1.3% month-on-month gain. On an annualised basis, sales are expected to have fallen from 4.4% to 3.7%.
New Brexit secretary Dominic Raab, who was appointed when David Davis resigned in protest at Theresa May’s trade and customs plans, will hold his first talks with the EU’s chief negotiator Michel Barnier in Brussels. May will meanwhile make her first visit to the Irish border since the referendum.
In corporate news, SSE dropped after it said first-quarter operating profits would take an £80m hit due to Britain’s hot summer and “persistently high gas prices” combining to cut renewable output, customers using less energy and increased costs. The utility added that fully year results could also be hit.
Unilever was also in the red after it said underlying sales growth slowed in the second quarter due to the impact of a truckers’ strike in Brazil but the company remained confident of hitting full year targets.
Anglo American slipped even as it reported a 6% year-on-year rise in total second-quarter output on a copper equivalent basis, excluding disruption after a leak at its Brazilian Minas-Rio iron ore project.
Babcock tumbled as the defence contractor cut its full-year revenue growth target, while Mike Ashley’s Sports Direct lost ground after it reported a 73% slump in annual profits as it took an £85.4m hit on its Debenhams holding.
WPP fell after French advertising peer Publicis posted an unexpected decline in second-quarter sales.
Vedanta Resources and Tritax Big Box were on the back foot as their stock went ex-dividend.
On the upside, price comparison website Moneysupermarket surged as it posted a rise in interim profit and revenue and announced plans for a new mortgage business.
Big Yellow edged higher as the self-storage group said like-for-like revenues in the first quarter rose by 7.6% to £29.9m.
Hilton Food advanced as it said trading in the 28 weeks to 15 July was in line with its expectations, while Capita rallied after saying it has been awarded a £30m, five-year contract by Southern Water that will see the outsourcer become its new customer services managed service provider.
In broker note action, Shell was lifted to outperform’ at Raymond James while Sports Direct was upgraded to ‘buy’ at Liberum.
