London stocks managed to close in the green on Friday, with the mood underpinned by better-than-expected UK retail sales data, as investors continued to digest recent central bank moves.
The FTSE 100 ended the session up 0.13% at 7,269.92, and the FTSE 250 was 0.58% firmer at 22,780.38.
Sterling was in a mixed state, last trading 0.47% weaker against the dollar at $1.3261, as it strengthened 0.04% on the euro to €1.1762.
“The FTSE 100 is holding up better than most, despite the energy and financial sector being the worst performers today, as a big slide in oil prices has seen BP and Shell slip back,” said CMC Markets chief market analyst Michael Hewson.
“We’re also seeing the likes of Lloyds and NatWest Group give up some of the gains that we saw yesterday in the wake of the surprise rate hike by the Bank of England.”
Hewson noted that the week’s best performers included Ocado in a year that had seen it languish towards the bottom of the top-flight index, while AstraZeneca was also ahead after it was found that its ‘Evusheld’ antibody cocktail combination worked well in treating symptoms of the Omicron variant of Covid-19.
“The travel and leisure sector is undergoing a bit of an end of week rebound after a bad week, with British Airways owner IAG amongst the best performers today, in a week that has seen the shares come under increasing pressure with the announcement of various travel bans these past few days.”
On the economic front, official data released earlier showed retail sales unexpectedly jumping in November, boosted by strong demand for clothing and a bumper Black Friday.
The Office for National Statistics said retail sales volumes rose by 1.4% in November, following growth of 1.1% in October, which was revised up from 0.8%.
That increase for November was above consensus, with most analysts looking for growth closer to 0.8%.
Year-on-year sales growth strengthened to 4.7%, compared to a 1.5% decline in October, also above consensus, for 4.2%.
Retail sales were now 7.2% higher than February 2020 levels.
“It is clear that plenty of customers used the Black Friday sales as an opportunity to snap up bargains ahead of Christmas,” said Helen Dickinson, chief executive of the British Retail Consortium.
“While traditional sales in TV and other electronics could be found, there has been a clear expansion in clothing and footwear in Black Friday discounts, boosting sales growth in these areas.
“This was bolstered by the cold weather during November.”
Denting that sentiment, however, was a closely-watched survey showing consumer confidence easing, hit by the emergence of the Omicron variant and the rising cost of living.
The GfK consumer confidence index eased one point to -15 in December.
Within that, expectations for the general economic situation over the coming year also fell one point, to -24, while the major purchase index lost three points to -6.
Expectations for personal finances over the next 12 months were also lower, with the index losing one point to 1.
“News about the Omicron variant could not have arrived at a worse time for festive celebrations,” said Joe Staton, client strategy director at GfK.
“While the holiday season has not yet been hijacked, December’s headline score has slipped and the lack of Yuletide cheer is evident.”
On the property front, Halifax predicted flatter house price growth in 2022 following the bumper gains seen this year, but warned there remained “considerable uncertainty” around its forecast.
The mortgage lender said the housing market had continued to “defy expectations” in 2021, with property prices rising by 8.2% despite the pandemic.
It said the average price of a house in the UK was now £272,992 compared to £252,235 a year previously, while quarterly house price growth is 3.4%, the strongest level since 2006.
Looking to 2022, however, Halifax said pressure on household budgets was likely to ramp up, as government support measures ended and interest rates rose.
Russell Galley, managing director, said that suggested house price growth would “slow considerably” in 2022.
“Nevertheless, interest rates will remain low by historic standards and property prices will continue to be supported by the limited supply of available properties.
“We expect, therefore, that house prices will maintain their current strong levels but that growth will be broadly flat during 2022, perhaps somewhere in the range of 0% to 2%.”
In equity markets, Qinetiq jumped 5.47% after an upgrade to ‘buy’ at Citi, while Fresnillo was up 2.72% and Polymetal International added 2% as gold prices rose.
“Gold is taking the news that central banks are tightening monetary policy and tackling inflation head-on very well,” said Oanda analyst Craig Erlam.
“You would be forgiven for thinking this would be a negative development for the yellow metal and, in the longer term, I expect it will be.”
British Airways and Iberia parent IAG ascended 3.95% having said on Thursday that it terminated an agreement to buy rival Air Europa from Spain’s Globalia.
Aston Martin Lagonda was up 5.25% after executive chairman Lawrence Stroll spent almost £5m buying more shares in the luxury car maker.
On Wednesday, Stroll bought 318,500 shares at £12 each, or £3.82m and followed up on Thursday with a further 81,500 at £12.20 apiece, or just over £1m.
He now held around 21.6% of the company.
On the downside, Johnson Matthey reversed earlier gains to close down 1.48%, after announcing it had sold its health business to Altaris Capital Partners for £325m.
HSBC was off 0.62% after the Financial Conduct Authority fined the bank £64m for anti-money laundering failings.
Wood Group slipped 0.7% after a downgrade to ‘equal weight’ at Morgan Stanley, while Royal Dutch Shell and BP gushed 1.93% and 1.53% lower, respectively, as oil prices fell.
Homeware retailer Dunelm Group was down 1.95%, giving up some of Thursday’s gains which came on the back of a bullish note from UBS.
Market Movers
FTSE 100 (UKX) 7,269.92 0.13%
FTSE 250 (MCX) 22,780.38 0.58%
techMARK (TASX) 4,465.19 1.05%
FTSE 100 – Risers
International Consolidated Airlines Group SA (CDI) (IAG) 132.04p 3.95%
Associated British Foods (ABF) 1,952.50p 3.66%
Informa (INF) 502.00p 3.29%
Flutter Entertainment (CDI) (FLTR) 11,195.00p 3.23%
National Grid (NG.) 1,073.80p 2.87%
British American Tobacco (BATS) 2,766.50p 2.86%
Fresnillo (FRES) 914.80p 2.72%
Pearson (PSON) 604.00p 2.62%
Vodafone Group (VOD) 114.26p 2.31%
ITV (ITV) 107.80p 2.23%
FTSE 100 – Fallers
Croda International (CRDA) 9,922.00p -3.15%
Royal Dutch Shell ‘A’ (RDSA) 1,593.00p -2.09%
Spirax-Sarco Engineering (SPX) 15,380.00p -2.04%
Royal Dutch Shell ‘B’ (RDSB) 1,595.80p -1.93%
NATWEST GROUP PLC ORD 100P (NWG) 219.40p -1.88%
Ashtead Group (AHT) 6,032.00p -1.76%
Legal & General Group (LGEN) 287.30p -1.61%
Halma (HLMA) 3,057.00p -1.58%
BP (BP.) 333.75p -1.53%
Johnson Matthey (JMAT) 1,962.50p -1.48%
FTSE 250 – Risers
Cineworld Group (CINE) 33.68p 8.19%
Micro Focus International (MCRO) 359.10p 7.56%
Capita (CPI) 35.98p 7.05%
Syncona Limited NPV (SYNC) 205.00p 6.77%
National Express Group (NEX) 249.20p 6.13%
AO World (AO.) 95.20p 5.78%
QinetiQ Group (QQ.) 258.40p 5.47%
Restaurant Group (RTN) 79.80p 5.42%
Aston Martin Lagonda Global Holdings (AML) 1,252.00p 5.25%
Network International Holdings (NETW) 280.00p 5.18%
FTSE 250 – Fallers
Trustpilot Group (TRST) 316.20p -7.54%
Synthomer (SYNT) 388.80p -2.95%
Weir Group (WEIR) 1,641.50p -2.90%
Kainos Group (KNOS) 1,776.00p -2.52%
Diversified Energy Company (DEC) 101.20p -2.50%
JPMorgan Japanese Inv Trust (JFJ) 663.00p -2.07%
Dunelm Group (DNLM) 1,358.00p -1.95%
Centrica (CNA) 66.50p -1.95%
IMI (IMI) 1,700.00p -1.79%
OSB Group (OSB) 515.00p -1.72%
