London stocks closed in the red on Friday, as investors weighed better-than-expected UK GDP data against slumps for industrial production and retail sales across the pond.
The FTSE 100 ended the session down 0.28% at 7,542.95, and the FTSE 250 was 0.94% weaker at 22,743.35.
Sterling was in a mixed state, last trading down 0.27% on the dollar at $1.3669, while it strengthened 0.06% on the euro to change hands at €1.1973.
“The afternoon session saw indices take a swift dive further into the red, but while most markets are still trading lower, a small recovery off the lows has been witnessed,” said IG chief market analyst Chris Beauchamp.
“Nonetheless the optimistic view has had a hard time prevailing this week, and it looks like investors continue to sell to strengthen, pointing towards a further negative atmosphere as the second half of January gets underway.”
On the economic front, industrial output in the United States underwhelmed at the end of December, amid a decline in automobile manufacturing and in the output of gas utilities due to warmer-than-normal temperatures.
According to the Department of Commerce, industrial production dipped at a month-on-month pace of 0.1% in December.
Economists had pencilled in a rise of 0.3%.
Production of durable consumer goods fell by 1.0% on the month and that of consumer energy products by 3.0%, while non-energy nondurables output was little changed.
Output of business equipment meanwhile declined by 0.5% versus November.
US retail sales, meanwhile, unexpectedly slumped in December amid rising prices, according to figures also from the Commerce Department.
Retail sales fell 1.9% on the month following a 0.2% increase in November, marking the biggest decline in 10 months, and well short of expectations for a flat reading.
Excluding motor vehicles and parts and gasoline stations, retail sales were down 2.5%.
Michael Pearce, senior US economist at Capital Economics, said the plunge appeared to mainly reflect the ongoing impact of higher prices and shortages on consumption, with the Omicron wave having only a modest impact.
“The 1.9% fall in retail sales was mostly driven by a huge 3.1% fall in underlying control group sales – excluding food, gasoline, autos and building materials,” Pearce said.
“The breakdown suggests that had more to do with the ongoing impact of shortages and higher inflation, with furniture sales falling by 5.5% month-on-month, non-store sales down by a barely believable 8.7% and electronics stores sales dropping by 2.9%.
“By contrast, the initial Omicron wave appeared to have only a modest impact, with food services sales declining by a modest 0.8%.”
On home shores, the UK economy recovered to above pre-pandemic levels in November, with figures released by the Office for National Statistics (ONS) showing growth across all industries.
GDP grew 0.9%, up from 0.2% in October and coming in ahead of expectations for 0.4% growth.
That left the economy 0.7% above its level in February 2020, just before the first wave of the pandemic hit.
The jump in GDP was due mostly to a 1.1% rise in manufacturing output month-on-month, a 3.5% increase in construction output and a 2.5% rise in professional/scientific activities.
“The economy grew strongly in the month before Omicron struck with architects, retailers, couriers and accountants having a bumper month,” said ONS chief economist Grant Fitzner.
“Construction also recovered from several weak months, as many raw materials became easier to get hold of.
“This meant that monthly GDP exceeded its pre-pandemic level for the first time in November.”
In equity markets, electricals retailer Currys slid 6.85% after it reported a fall in sales over the peak Christmas period as a tough comparator year, uneven customer demand and supply disruption hit revenues.
Credit-checking firm Experian lost 2.41% even as it reported a 14% rise in third-quarter revenue, driven by growth across all geographical units as it lifted annual guidance.
Discounter B&M European Value Retail was 5.33% weaker after SSA Investments sold 40 million shares in the company – a 4% stake – in a placing.
Housebuilder Berkeley Group reversed earlier gains to close 0.65% lower, despite an upgrade to ‘buy’ from ‘hold’ at Deutsche Bank.
Royal Mail slumped 5.53% after JPMorgan put the stock on its ‘Negative Catalyst Watch’ ahead of earnings in February.
On the upside, Cineworld Group gained 4.02% after saying it had successfully generated positive cash flow in the fourth quarter of 2021, thanks to steady growth in performances and attendances over the period.
Banks were also on the rise, with Standard Chartered up 2.31% and Lloyds Banking Group 1.85% higher.
Countryside Properties leapt 8.02%, partially recovering from its tumble on Thursday when it announced the departure of its chief executive and said first-quarter trading had been below the board’s expectations.
FTSE 100 (UKX) 7,542.95 -0.28%
FTSE 250 (MCX) 22,743.35 -0.94%
techMARK (TASX) 4,458.52 -0.15%
FTSE 100 – Risers
British American Tobacco (BATS) 3,044.00p 2.32%
Standard Chartered (STAN) 523.20p 2.31%
Lloyds Banking Group (LLOY) 54.97p 1.85%
Severn Trent (SVT) 2,891.00p 1.40%
BP (BP.) 388.70p 1.25%
National Grid (NG.) 1,079.80p 1.24%
Compass Group (CPG) 1,718.50p 1.21%
AstraZeneca (AZN) 8,544.00p 1.12%
DCC (CDI) (DCC) 6,246.00p 0.94%
Unilever (ULVR) 3,936.50p 0.86%
FTSE 100 – Fallers
Royal Mail (RMG) 497.10p -5.53%
B&M European Value Retail S.A. (DI) (BME) 564.80p -5.33%
Ocado Group (OCDO) 1,447.00p -4.74%
Rightmove (RMV) 693.80p -4.38%
Halma (HLMA) 2,662.00p -4.24%
Evraz (EVR) 579.80p -4.07%
Antofagasta (ANTO) 1,381.50p -3.73%
Kingfisher (KGF) 328.90p -3.55%
Scottish Mortgage Inv Trust (SMT) 1,140.00p -3.43%
Taylor Wimpey (TW.) 153.95p -3.39%
FTSE 250 – Risers
Countryside Properties (CSP) 352.80p 7.96%
NCC Group (NCC) 229.00p 5.77%
Virgin Money UK (VMUK) 199.70p 4.25%
Cineworld Group (CINE) 40.25p 3.76%
Hammerson (HMSO) 36.10p 2.64%
Renishaw (RSW) 4,674.00p 2.46%
Drax Group (DRX) 603.00p 2.38%
Airtel Africa (AAF) 142.00p 2.08%
CLS Holdings (CLI) 225.00p 2.04%
SSP Group (SSPG) 275.10p 2.04%
FTSE 250 – Fallers
Trustpilot Group (TRST) 243.00p -10.86%
Ferrexpo (FXPO) 277.40p -10.69%
Future (FUTR) 3,208.00p -7.34%
Currys (CURY) 104.80p -6.76%
Watches of Switzerland Group (WOSG) 1,272.00p -6.33%
888 Holdings (888) 268.60p -5.82%
Petropavlovsk (POG) 16.84p -5.82%
Auction Technology Group (ATG) 1,184.00p -4.82%
Dr. Martens (DOCS) 329.60p -4.57%
Bridgepoint Group (Reg S) (BPT) 388.00p -4.55%