London open: Stocks edge up as investors mull retail sales

Sharecast - At 0845 GMT, the FTSE 100 was up 0.2% at 7,359.23, while sterling was 0.2% firmer versus the dollar at 1.1891.

Figures released earlier by the Office for National Statistics showed that retail sales volumes nudged higher in October, partially reversing September’s fall.

Sales rose 0.6% following a fall of 1.5% - revised down from an initial estimate for 1.4% - in September, when shops and businesses closed for the state funeral of Elizabeth II. Analysts had been expecting a rise of around 0.5%.

Increases were seen across all the main sectors apart from food stores, where volumes fell 1%, or 4.1% when compared to pre-Covid levels in February 2020.

Industry data is increasingly showing that consumers, hit hard by the inflation and the cost-of-living crisis, are switching to cheaper brands and buying less when doing their weekly shops.

Non-food sales volumes rose by 1.1% in October 2022, although they remain 1.7% below February 2020.

Year-on-year, sales fell 6.1%, slightly better than forecasts for a fall of 6.5%, while in the three months to October, sales fell 2.4% against the previous three months.

Darren Morgan, ONS director of economic statistics, said: "Retail sales increased in October, although this is likely a rebound effect after weak sales last month as many retailers closed or operated differently on the extra bank holiday for the Queen’s funeral.

"Looking at the broader picture, retail sales continue their downward trend seen since summer 2021 and are below where they were pre-pandemic."

Capital Economics said: "Sales volumes were probably supported by the reversal of bank holiday effects in October.

"And given that the effect from high inflation that weighed heavily on sales volumes in Q3 is likely to intensify in Q4, we doubt this is the start of a longer lasting improvement in consumer spending."

Investors were also digesting the latest survey from GfK, which showed that UK consumer confidence nudged higher in November.

GfK’s Consumer Confidence Index rose 3 points in November to -44, although it remains close to historic lows. In September the index touched -49, the lowest since the survey began in 1974.

Within November’s overall print, the personal finance situation index for the next 12 months increased 5 points to -29, while expectations for the economy in the coming year improved 3 points to -58. The Major Purchase Index was also ahead, up 3 points at -38.

But Joe Staton, client strategy director at GfK, said: "This month’s fillip is likely to reflect nothing more than a collective sigh of relief as a new prime minster takes charge following the alarming fiscal antics we saw in September.

"This is not the end of the beginning. External factors have changed little and with UK inflation recently hitting a new high, more bad news is inevitable.

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"Household budgets remain shrouded in massive uncertainty, with fresh jumps in food prices, energy still uncomfortably expensive, the prospect of new interest rate rises pressurising mortgages and…squeezed real pay."

In equity markets, Legal & General rallied as it backed its full-year guidance for operating profit growth and capital generation and said its pension risk transfer business had continued to perform strongly.

Bodycote was also in the black as it held full-year guidance and said revenues in the four months to October 30 rose by a third due to price increases and energy cost surcharges.

On the downside, Intertek was knocked lower by a downgrade to ‘sell’ at Stifel, while Mitie was weaker after a downgrade to ‘add’ at Numis.

Market Movers

FTSE 100 (UKX) 7,359.23 0.17%

FTSE 250 (MCX) 19,092.33 -0.16%

techMARK (TASX) 4,326.86 -0.20%

FTSE 100 - Risers

Centrica (LON:CNA) 94.58p 3.14%

Legal & General Group (LGEN) 259.40p 2.29%

Convatec Group (CTEC) 225.60p 1.99%

Frasers Group (FRAS) 792.00p 1.93%

Phoenix Group Holdings (PHNX) 585.40p 1.49%

SSE (LON:SSE) 1,693.50p 1.47%

Burberry Group (LON:BRBY) 2,069.00p 1.27%

BP (LON:BP.) 483.25p 0.96%

Mondi (LON:MNDI) 1,558.00p 0.91%

Airtel Africa (AAF) 117.20p 0.77%

FTSE 100 - Fallers

Intertek Group (LON:ITRK) 3,874.00p -2.15%

Harbour Energy (HBR) 309.00p -1.59%

Dechra Pharmaceuticals (LON:DPH) 2,674.00p -1.47%

Prudential (LON:PRU) 987.20p -1.04%

International Consolidated Airlines Group (LON:ICAG) SA (CDI) (IAG) 130.46p -0.96%

Experian (EXPN) 2,851.00p -0.94%

Rolls-Royce Holdings (LON:RR.) 85.80p -0.92%

Halma (LON:HLMA) 2,227.00p -0.89%

British Land Company (BLND) 396.30p -0.80%

Spirax-Sarco Engineering (SPX) 11,160.00p -0.80%

FTSE 250 - Risers

Tritax Big Box Reit (BBOX) 152.30p 2.49%

Syncona Limited NPV (SYNC) 182.00p 2.25%

Moonpig Group (MOON) 168.50p 2.12%

Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 315.00p 1.45%

Edinburgh Inv Trust (EDIN) 624.00p 1.30%

AJ Bell (AJB) 344.80p 1.11%

Aston Martin Lagonda Global Holdings (AML) 124.15p 1.10%

Abrdn (ABDN) 198.10p 1.07%

Diversified Energy Company (DEC) 127.00p 0.95%

FirstGroup (FGP (LON:FGP)) 97.85p 0.88%

FTSE 250 - Fallers

Mitie Group (LON:MTO) 73.90p -4.77%

Shaftesbury (SHB) 381.00p -2.41%

SSP Group (SSPG) 206.00p -2.32%

Domino's Pizza Group (DOM) 273.00p -2.01%

Quilter (QLT) 102.50p -2.01%

IP Group (LON:IPO) 64.05p -1.99%

Ninety One (N91) 198.20p -1.88%

888 Holdings (DI) (LON:888) 94.00p -1.88%

Wizz Air Holdings (LON:WIZZ) 2,159.00p -1.82%

WH Smith (LON:SMWH) 1,342.50p -1.68%

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