London open: Stocks gain as retail sales disappoint

(Sharecast News) - London stocks gained in early trade on Friday as weaker-than-expected retail sales data underpinned rate cut expectations. At 0830 GMT, the FTSE 100 was up 0.9% at 8,466.87.

Figures released earlier by the Office for National Statistics showed that retail sales fell 0.3% on the month in December following a downwardly-revised 0.1% increase in November. Economists were expecting a 0.4% jump.

ONS senior statistician Hannah Finselbach said: "This was driven by a very poor month for food sales, which sank to their lowest level since 2013, with supermarkets particularly affected."

The ONS said falls in supermarkets were partly offset by a rise in non-food stores, such as clothing retailers, which rebounded from falls in recent months.

For the fourth quarter, sales volumes fell by 0.8% compared with the third quarter, but rose by 1.9% versus the same period a year earlier.

The retail sales figures rounded off a trio of disappointing releases from the ONS this week. On Thursday, data showed the economy grew 0.1% in November following contractions of 0.1% in October and September. This was below expectations of 0.2% growth, however.

On Wednesday, it was revealed that UK inflation unexpectedly eased in December after two months of increases.

Consumer price inflation rose 2.5%, down from 2.6% in November, and versus expectations for it to remain unchanged.

Meanwhile, core inflation - which excludes food and energy - declined to 3.2% from 3.5%, versus expectations for a smaller drop to 3.4%.

Services inflation eased to 4.4% in December from 5% the month before. Economists were expecting 4.8%.

In equity markets, Ladbrokes owner Entain jumped to the top of the FTSE 100 after William Hill and 888 owner Evoke said that FY24 EBITDA was set to be at the high end of guidance and "well above" market expectations after a strong performance in the fourth quarter. Evoke shares surged 10%.

Smiths Group was also a high riser as US activist investor Engine Capital called on the diversified engineer to explore a breakup.

In a letter sent to the board, Engine Capital - which holds a 2% stake in Smiths - said Smiths should launch a strategic review.

""We believe that Smiths has significant value that is currently unrealised due to its conglomerate structure, and that it is time for the board to announce a strategic alternatives process to maximise value for shareholders," it said.

Engine Capital said a sale of the entire company or its four business could deliver a significant premium to the current share price.

Housebuilders were among the best performers again amid rate cut hopes, with Persimmon, Taylor Wimpey, Barratt Redrow and Berkeley all up.

Elsewhere, automated testing company Spirent Communications rose despite saying it expects full-year revenues to be lower after a "challenging" year, as it reported a strong uptick of order growth in the fourth quarter.

Ninety One gained as it said third-quarter assets under management rose to £130.2bn as at the end of the December from £127.4bn at the end of September.

Big Yellow was also in the black even as the self-storage group delivered a cautious outlook on trading reporting a drop in occupancy levels over the third quarter, and said it plans to cut jobs as it deals with higher National Insurance payments to employees from April.

Market Movers

FTSE 100 (UKX) 8,466.87 0.89% FTSE 250 (MCX) 20,566.06 0.19% techMARK (TASX) 4,688.83 0.51%

FTSE 100 - Risers

Entain (ENT) 655.80p 4.10% Smiths Group (SMIN) 1,814.00p 2.78% Persimmon (PSN) 1,211.50p 2.71% Glencore (GLEN) 377.10p 1.91% Antofagasta (ANTO) 1,771.00p 1.90% Spirax Group (SPX) 7,055.00p 1.88% Anglo American (AAL) 2,505.50p 1.85% Taylor Wimpey (TW.) 113.05p 1.80% Barratt Redrow (BTRW) 431.50p 1.72% Diageo (DGE) 2,418.50p 1.70%

FTSE 100 - Fallers

Fresnillo (FRES) 674.50p -0.88% Smurfit Westrock (DI) (SWR) 4,305.00p -0.28% Marks & Spencer Group (MKS) 335.30p -0.21% Vodafone Group (VOD) 69.44p -0.09% Kingfisher (KGF) 238.90p -0.08% Alliance Witan (ALW) 1,288.00p 0.00% RELX FINANCE BV 3.375% GTD NTS 20/03/33 (BW73) 99.72p 0.00% F&C Investment Trust (FCIT) 1,162.00p 0.00% Rightmove (RMV) 654.20p 0.03% Scottish Mortgage Inv Trust (SMT) 1,021.50p 0.05%

FTSE 250 - Risers

Ninety One (N91) 154.80p 5.88% Discoverie Group (DSCV) 690.00p 4.39% Ferrexpo (FXPO) 103.40p 1.97% Mobico Group (MCG) 78.80p 1.94% Pennon Group (PNN) 538.50p 1.89% Bellway (BWY) 2,422.00p 1.85% Big Yellow Group (BYG) 886.00p 1.72% Safestore Holdings (SAFE) 606.50p 1.68% Vistry Group (VTY) 622.00p 1.63% Wood Group (John) (WG.) 67.10p 1.44%

FTSE 250 - Fallers

PayPoint (PAY) 671.00p -4.69% Morgan Sindall Group (MGNS) 3,645.00p -2.80% Fidelity Emerging Markets Limited Ptg NPV (FEML) 684.50p -2.24% Bloomsbury Publishing (BMY) 626.00p -2.19% W.A.G Payment Solutions (WPS) 85.00p -2.07% Future (FUTR) 880.00p -2.00% Telecom Plus (TEP) 1,676.00p -1.99% Foresight Environmental Infrastructure Limited (FGEN) 69.20p -1.84% Worldwide Healthcare Trust (WWH) 320.00p -1.54% Baillie Gifford Japan Trust (BGFD) 706.00p -1.53%