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London open: Stocks fall on retail sales, China disappointment
London stocks fell in early trade on Tuesday, with sentiment hit after China failed to announce any fresh stimulus and following the release of uninspiring UK retail sales figures.
At 0840 GMT, the FTSE 100 was down 0.4% at 7,608.33.
Investors were mulling news that China has set a growth target of “around 5%” for this year. It also announced the issuance of “ultra-long” special bonds for major projects, according to a government work report.
Richard Hunter, head of markets at Interactive Investor, said “the absence of any measures designed to bolster the economy in terms of stimulus was poorly received, putting pressure on the local markets”.
“The weakness in pockets of the economy, most notably the beleaguered property sector, is well-known and it increasingly appears that the authorities are content for natural economic growth to override any shorter term fiscal boosts to repair the economy,” he said.
On home shores, data out earlier showed that retail sales growth slowed last month as volumes were dampened by the wettest February on record.
According to the British Retail Consortium-KPMG Retail Sales Monitor, total sales rose 1.1% year-on-year in February, following 5.2% growth the year before. This was lower than the 1.2% growth seen in January and well below the 12-month average growth rate of 3.1%.
Food sales were up 6% year-on-year over the three months to February, under the 12-month average increase of 7.9%, but non-food sales dropped 2.5%, compared with the 12-month average decline of 0.9%.
“Not even Valentine’s Day lifted customers out of the gloom, and gifting products that typically sell well, like jewellery and watches, failed to deliver,” said Helen Dickinson, chief executive of the BRC.
“On the sunnier side, rainy weather did brighten sales of toys, as parents looked for ways to occupy their children indoors.”
Looking ahead, Linda Ellett, the UK head of consumer markets at KPMG’s Leisure & Retail division, said that a “consumer reluctance to get out there and start spending” will likely remain in the short term.
“With big increases in labour costs and business rates just weeks away, adding to an already stressed cost agenda for retailers, many will be pinning their hopes on some good news in the Chancellors’ Spring Budget this week to help kick start a spending revival on the high street. As inflation continues to slow over the coming months and household finances are expected to improve, there is some light at the end of the tunnel for weary households.”
In equity markets, heavily-weighted miners were among the worst performers amid disappointment over the announcement in China, with Anglo American, Antofagasta and Rio Tinto all in the red.
Equipment rental firm Ashtead slumped as it said that full-year group revenues will expand at the low end of its guidance as a result of the previously-disclosed slowdown in North America.
Inchcape was under the cosh as it reported double-digit organic revenue and profit growth for the 2023 but struck a more cautious note on the outlook for 2024.
Travis Perkins lost ground as it said it’s looking at exiting its French operations after group operating profits more than halved in 2023.
Office space provider IWG fell as it reported a sharp rise in annual profits but held a cautious line on 2024 prospects, despite bringing in record revenues last year.
On the upside, Intertek rallied as it posted a jump in full-year 2023 profit and said it expects a “robust” performance in 2024.
Spirent Communications rocketed after agreeing to be taken over by US communications equipment company Viavi in a £1bn deal.
Hiscox gained as it hailed record pre-tax profit for the year to the end of December 2023 and announced a $150m share buyback.
High street bakery chain Greggs rose as it maintained guidance and said it had made a strong start to the current year after delivering a jump in 2023 profits as customers sought out its sausage rolls and doughnuts amid the cost of living crisis.
Shareholders were also rewarded with a special 40p-a-share dividend on top of the 62p full-year payout.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Intertek Group Plc | +6.23% | +288.00 | 4,909.00 |
| 2 |  |
Fresnillo Plc | +3.40% | +16.20 | 492.30 |
| 3 |  |
Marks And Spencer Group Plc | +2.87% | +6.60 | 236.80 |
| 4 |  |
Hiscox Ltd | +2.05% | +23.00 | 1,144.00 |
| 5 |  |
Rightmove Plc | +1.92% | +10.80 | 574.40 |
| 6 |  |
Glencore Plc | +1.67% | +6.35 | 386.55 |
| 7 |  |
Johnson Matthey Plc | +1.40% | +22.00 | 1,593.00 |
| 8 |  |
Bunzl Plc | +0.78% | +24.00 | 3,090.00 |
| 9 |  |
Schroders Plc | +0.70% | +2.70 | 387.70 |
| 10 |  |
Coca-cola Hbc Ag | +0.69% | +17.00 | 2,488.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ashtead Group Plc | -7.75% | -444.00 | 5,284.00 |
| 2 |  |
Carnival Plc | -1.69% | -19.50 | 1,135.00 |
| 3 |  |
International Consolidated Airlines Group S.a. | -1.66% | -2.40 | 142.40 |
| 4 |  |
Prudential Plc | -1.50% | -11.60 | 761.20 |
| 5 |  |
Itv Plc | -1.39% | -0.84 | 59.70 |
| 6 |  |
Rentokil Initial Plc | -1.28% | -5.50 | 424.30 |
| 7 |  |
Tui Ag | -1.21% | -6.50 | 529.50 |
| 8 |  |
Crh Plc | -1.15% | -76.00 | 6,558.00 |
| 9 |  |
Rio Tinto Plc | -1.06% | -54.00 | 5,036.00 |
| 10 |  |
Shell Plc | -1.04% | -25.50 | 2,435.00 |
US close: S&P 500 and Nasdaq Composite fall from record highs
Wall Street stocks closed lower on Monday as both the S&P 500 and Nasdaq Composite fell from the all-time highs recorded at the end of last week.
At the close, the Dow Jones Industrial Average was down 0.25% at 38,989.83, while the S&P 500 lost 0.012% to 5,130.95 and the Nasdaq Composite saw out the session 0.41% higher at 16,207.51.
The Dow closed 97.55 points lower on Monday, reversing gains recorded in the previous session.
Nvidia continued to trade higher on Monday after rallying sharply at the end of last week, with the stock now trading at a fresh record high, while tech giant Apple traded lower after being levelled with a $1.84bn antitrust fine by the European Union.
No major data points were released on Monday but kater in the week, market participants will turn their attention to ADP’s employment survey and job openings data on Wednesday, while Friday will mark the release of both manufacturing and nonfarm payrolls data. Fed chairman Jerome Powell will also testify in front of both the House of Representatives and the Senate on Wednesday and Thursday, respectively.
No major corporate earnings were scheduled for publication on Monday.
Tuesday newspaper round-up: Mortgage reforms, JLR, Crispin Odey
The UK spends less on low-carbon energy policy than any other major European economy, analysis has shown, despite evidence that such spending could lower household bills and increase economic growth more than the tax cuts the government has planned. Spending on low-carbon measures for the three years from April 2020 to the end of April 2023 was about $33.3bn (£26.2bn) in total for the UK, the lowest out of the top five European economies, according to an analysis by Greenpeace of data from the International Energy Agency. – Guardian
Mortgage reforms introduced after the 2008 banking crisis have “tilted too far” in support of financial stability to the point that first-time buyers are being excluded from the housing market, building societies have warned. A report commissioned by the Building Societies Association has called for an overhaul of affordability and repayment rules, which they say have contributed to a steady decline in first-time buyer mortgages since the mid-2000s. – Guardian
A group of former Twitter executives have launched a legal battle against Elon Musk over claims they are owed $128m (£100m) in severance pay. Those suing the Tesla billionaire, who bought Twitter for $44bn in October 2022 before renaming it X, include ex-chief executive Parag Agrawal and former finance boss Ned Segal. – Telegraph
The Indian owner of Jaguar Land Rover (JLR) is to spin off its car division as it prepares for a future built around electric vehicles (EVs). Tata Motors on Monday said the demerger will see its existing auto business effectively divided between passenger cars and commercial vehicles. The former will focus on EVs while the latter will produce larger vehicles such as trucks and buses. – Telegraph
The boss of Marks & Spencer has branded the inflation-linked increase to commercial property taxes as “economically illiterate” in a last-ditch effort to persuade the government to make a U-turn before this week’s budget. Stuart Machin, chief executive of the food-to-fashion retailer, said the government needed to do more to understand the importance of the retail sector as existing policy “makes being an employer of people and running stores really hard”. – The Times
Crispin Odey has ignited speculation that he may try to stage a return to the investment industry after the implosion of the disgraced hedge fund manager’s firm amid allegations of sexual misconduct. Accounts for Odey Asset Management Group Limited, a holding company that counts Odey, 65, as its only director, said it was “currently exploring alternative business opportunities”. – The Times
