London stocks were still in the black by midday on Tuesday as investors picked up some bargains following heavy losses in the previous session.
The FTSE 100 was up 0.6% at 7,259.76.
Russ Mould, investment director at AJ Bell, said: “After yet another miserable session in the US yesterday, Europe and pockets of Asia managed to avoid the rout and push ahead on Tuesday. This is unexpected given market sentiment is weak and the VIX ‘fear’ index yesterday jumped to its second highest closing price in the past 12 months.
“Stocks in general have struggled this year, with investors worrying about inflation, rising interest rates, a slowdown in the world economy, war in Ukraine, new Covid flare-ups in China, weakness in consumer spending and concerns that business investment might take a back seat.
“The narrative has gone from ‘how can I make money?’ to ‘how can I protect my money?’.
“Growth stocks have gone from invincible to un-investable in the eyes of many investors, while commodity producers have also lost their shine of late, depressed by concerns that economic activity is grinding to a halt.
“Investors are increasingly favouring stocks with generous dividends as the trickle of cash payments is at least one form of positive return on an investment. It’s no coincidence that the entire top 10 risers on the FTSE 100 today, as measured by index points, are all mid-to-high yielding stocks including HSBC, Unilever, Glencore and British American Tobacco.”
Meanwhile, a survey out earlier showed that retail sales fell in April as the mounting cost of living crisis started to bite.
According to the latest BRC-KPMG retail sales monitor, like-for-like sales fell 1.7% in the four weeks to 30 April compared to the same period a year previously, when they increased 39.6%. On a total basis, sales decreased 0.3%. It was the first decline in sales for over a year.
Food sales decreased 1.3% in the three months to April, or by 1.8% on a like-for-like basis. Non-food sales increased by 1.8% or 6.9% on a total basis, although that remains well below the 12-month total average for growth of 11.1%.
In addition, the British Retail Consortium noted that as sales figures were not adjusted for inflation, the small drop in sales would have masked “a much larger drop” in volumes once inflation was accounted for.
Helen Dickinson, chief executive of the BRC, said: “The rising cost of living has crushed consumer confidence and put the brakes on consumer spending. Sales growth has been slowing since January, though the real extent of this decline has been masked by rising inflation.”
In equity markets, British Gas owner Centrica rallied after saying that full-year adjusted earnings per share were set to be at the top end of analyst expectations following a strong performance in the first four months of 2022.
Elsewhere, IWG was boosted by an upgrade to ‘buy’ from ‘hold’ at Berenberg.
Precision instrument maker Spectris advanced after announcing the acquisition of US firm Dytran Instruments for $82m (£66m).
Media platform operator Future was also up after it acquired US-based women’s lifestyle publisher WhoWhatWear from Clique Brands for an undisclosed sum.
On the downside, Renishaw lost ground after the engineer cut its annual profit forecast.
Market Movers
FTSE 100 (UKX) 7,259.76 0.60%
FTSE 250 (MCX) 19,478.91 0.89%
techMARK (TASX) 4,235.67 0.49%
FTSE 100 – Risers
Melrose Industries (MRO) 112.50p 4.55%
Aveva Group (AVV) 2,169.00p 4.43%
Croda International (CRDA) 6,914.00p 3.32%
Smurfit Kappa Group (CDI) (SKG) 3,324.00p 3.13%
Imperial Brands (IMB) 1,703.00p 3.06%
Mondi (MNDI) 1,609.00p 3.01%
Persimmon (PSN) 2,093.00p 3.00%
Barratt Developments (BDEV) 472.00p 2.81%
Dechra Pharmaceuticals (DPH) 3,246.00p 2.79%
Phoenix Group Holdings (PHNX) 585.80p 2.56%
FTSE 100 – Fallers
Airtel Africa (AAF) 138.00p -4.23%
Shell (SHEL) 2,191.50p -1.51%
BP (BP.) 400.40p -1.09%
BAE Systems (BA.) 736.60p -1.02%
Entain (ENT) 1,238.50p -0.80%
Avast (AVST) 505.80p -0.71%
Whitbread (WTB) 2,543.00p -0.70%
Glencore (GLEN) 455.40p -0.69%
Rentokil Initial (RTO) 514.20p -0.58%
Burberry Group (BRBY) 1,482.50p -0.47%
FTSE 250 – Risers
Abrdn Private Equity Opportunities Trust (APEO) 480.00p 5.73%
Genus (GNS) 2,344.00p 4.92%
Centrica (CNA) 75.08p 4.36%
Investec (INVP) 434.40p 4.17%
TBC Bank Group (TBCG) 1,230.00p 4.06%
Darktrace (DARK) 428.60p 3.98%
Watches of Switzerland Group (WOSG) 857.50p 3.94%
Ferrexpo (FXPO) 141.60p 3.58%
Discoverie Group (DSCV) 700.00p 3.40%
Urban Logistics Reit (SHED) 172.50p 3.29%
FTSE 250 – Fallers
Polymetal International (POLY) 255.00p -3.77%
Network International Holdings (NETW) 217.00p -3.56%
SSP Group (SSPG) 206.60p -3.10%
Aston Martin Lagonda Global Holdings (AML) 726.20p -2.97%
Energean (ENOG) 1,254.00p -2.94%
QinetiQ Group (QQ.) 349.60p -2.02%
Clarkson (CKN) 3,335.00p -1.91%
Renishaw (RSW) 4,110.00p -1.91%
Oxford Instruments (OXIG) 2,100.00p -1.87%
Lancashire Holdings Limited (LRE) 391.40p -1.51%
