London open: Stocks little changed as investor mull retail sales

Opening Market Report
07:16, 12th January 2021

(Sharecast News) - London stocks were little changed in early trade on Tuesday amid ongoing concerns about the Covid-19 pandemic and the potential for tighter restrictions, as investors digested dire UK retail sales figures.
At 0900 GMT, the FTSE 100 was steady at 6,796.55.

Spreadex analyst Connor Campbell said: "It was another quiet start on Tuesday - though as we saw on Monday, that doesn't mean the markets won't end the session deep in the red."

He said the FTSE's energy was being "sapped by the continued speculation that even tighter lockdown restrictions might be on their way in the UK, and Rishi Sunak's warning that the economy is going to 'get worse before it gets better'".

Market participants were also mulling over industry research showing that UK retail sales slumped to a record low in 2020, after the high street saw little festive cheer in December.

According to the latest BRC-KPMG retail sales monitor, total sales increased 1.8% in December. That was an improvement on December 2019's 0.2% uptick, and above the 12-month average decline. But it was below the three-month average of growth of 2.5%.

On a like-for-like basis, sales rose 4.8% year-on-year.

The weak December contributed to a 0.3% decline in total sales in 2020, the lowest since records began in 1995. Food sales rose by 5.4%, but non-food was down 5.0%.

Paul Martin, UK head of retail at KPMG, said: "In the most important month of the year for the retail industry, there was some positive growth due to the ongoing shift of expenditure from other categories, such as travel and leisure.

"Household retailed and food item purchases were top of Christmas shopping lists, with historic growth rates in contrast to fashion accessories and beauty products, which experienced double-digit declines.

"Further restrictions and the closure of many non-essential shops resulted in a dismal December performance for those retailers on the high street, and conditions will be continue to be challenging as we enter another national lockdown."

In equity markets, Avast was the top performer on the FTSE 100 after an initiation at 'buy' at Berenberg.

B&Q owner Kingfisher rallied after saying it expected current year profits to be at the top end of forecasts as fourth quarter like-for-like sales rose 16.9%, driven by people purchasing online. Current sell-side analyst expectations for full-year adjusted profit before tax is £667m to £742m, according to company-compiled consensus estimates at January 4.

Playtech advanced as the FTSE 250 gambling software company said its FY 2020 performance was set to be ahead of consensus expectations, with its financials division, Finalto, the standout performer.

Housebuilder Vistry was on the front foot after saying it would resume dividend payments as it guided for full-year profits at the upper end of forecasts.

On the downside, miniature wargames manufacturer Games Workshop slumped even as it reported a better first-half performance than it had been expecting, as the group continues to benefit from Covid-19 restrictions and lockdowns.

Market Movers

FTSE 100 (UKX) 6,796.55 -0.03%
FTSE 250 (MCX) 20,750.57 -0.12%
techMARK (TASX) 4,137.83 -0.35%

FTSE 100 - Risers

Avast (AVST) 546.50p 2.92%
Kingfisher (KGF) 287.00p 2.68%
Lloyds Banking Group (LLOY) 36.66p 1.38%
International Consolidated Airlines Group SA (CDI) (IAG) 154.90p 1.34%
Compass Group (CPG) 1,427.00p 1.21%
HSBC Holdings (HSBA) 413.10p 1.20%
British Land Company (BLND) 457.40p 1.19%
Royal Dutch Shell 'B' (RDSB) 1,424.00p 1.18%
Royal Dutch Shell 'A' (RDSA) 1,478.40p 1.09%
Glencore (GLEN) 273.50p 1.09%

FTSE 100 - Fallers

Reckitt Benckiser Group (RB.) 6,462.00p -1.43%
Croda International (CRDA) 6,532.00p -1.36%
JD Sports Fashion (JD.) 871.20p -1.36%
AstraZeneca (AZN) 7,471.00p -1.12%
Fresnillo (FRES) 1,166.00p -1.10%
Spirax-Sarco Engineering (SPX) 11,515.00p -1.07%
Relx plc (REL) 1,849.50p -0.99%
Scottish Mortgage Inv Trust (SMT) 1,231.00p -0.97%
Intertek Group (ITRK) 5,672.00p -0.87%
Hargreaves Lansdown (HL.) 1,614.00p -0.86%

FTSE 250 - Risers

TUI AG Reg Shs (DI) (TUI) 349.90p 50.35%
Gamesys Group (GYS) 1,304.00p 3.82%
TI Fluid Systems (TIFS) 234.45p 3.17%
Playtech (PTEC) 463.40p 3.16%
Aston Martin Lagonda Global Holdings (AML) 1,750.20p 3.01%
Hammerson (HMSO) 22.71p 2.67%
National Express Group (NEX) 257.00p 2.47%
Petrofac Ltd. (PFC) 167.90p 2.41%
Just Group (JUST) 69.35p 2.21%
Ferrexpo (FXPO) 346.00p 2.19%

FTSE 250 - Fallers

Games Workshop Group (GAW) 10,870.00p -6.53%
Apax Global Alpha Limited (APAX) 181.00p -3.72%
Clarkson (CKN) 2,780.00p -3.30%
Safestore Holdings (SAFE) 788.00p -3.13%
Diploma (DPLM) 2,098.00p -3.05%
Network International Holdings (NETW) 338.20p -2.42%
HGCapital Trust (HGT) 313.00p -2.19%
Micro Focus International (MCRO) 389.60p -1.86%
Dunelm Group (DNLM) 1,278.00p -1.69%
FDM Group (Holdings) (FDM) 1,070.00p -1.65%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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