London open: Stocks fall after UK retail sales, borrowing data; US inflation eyed

(Sharecast News) - London stocks fell in early trade on Friday as investors mulled a smaller-than-expected rise in UK retail sales but better-than-expected borrowing figures, ahead of a key US inflation reading. At 0825 GMT, the FTSE 100 was down 0.3% at 8,077.58.

Data released earlier by the Office for National Statistics showed that retail sales ticked up 0.2% in November. This was an improvement on the 0.7% decline seen in October, but was below analysts' expectations of a 0.5% jump.

The ONS said growth in supermarkets and other non-food stores was partly offset by a fall in clothing retailers.

Hannah Finselbach, senior statistician at the ONS, said: "Retail sales increased slightly in November following last month's fall.

"For the first time in three months there was a boost for food store sales, particularly supermarkets. It was also a good month for household goods retailers, most notably furniture shops.

"Clothing store sales dipped sharply once again, as retailers reported tough trading conditions.

"With November's retail sales survey covering the four weeks to the 23 November, Black Friday itself will fall within December's figures. However, our figures account for this shift in timing to give us the best picture of what is happening in the shops."

Separate figures released by the ONS showed that borrowing was £11.2bn in November, comfortably below the consensus forecast of £13bn, and £3.4bn lower than in November 2023. It was also the lowest November borrowing figure in three years.

Jessica Barnaby, deputy director for public sector finance at the ONS, said: "Borrowing this month was over £3bn less than this time last year and the lowest November borrowing for three years.

"Central government tax receipts grew compared with last year, while increased spending on public services and on benefits were offset by lower debt interest payable."

Still to come, the US personal consumption expenditure index for November is due at 1330 GMT.

Derren Nathan, head of equity research at Hargreaves Lansdown, said it was "likely to be the key driver of sentiment".

"The expectation is that this key inflation measure has risen by 0.1 percentage points since October to 2.9%," he said.

"Getting to the 2% target is proving to be harder than expected and if inflation comes in north of consensus, that's likely to set investor nerves further on edge."

Corporate news was thin on the ground as the Christmas lull began to set in, but International Distribution Services was in focus after the UK government cleared the £3.6bn sale of the Royal Mail parent company to Czech billionaire Daniel Kretinsky's EP Group.

EP Group said in a statement that it had met requirements under Britain's National Security and Investment Act to "provide services that are in support of UK national security".

IP Group gained as it said two of its life science portfolio companies, Intelligent Ultrasound Group and Abliva, had received cash offers, resulting in anticipated total cash proceeds of £13.8m.

GSK was a touch weaker despite announcing positive results from a phase III trial of its ovarian cancer treatment, which met its primary endpoint of progression free survival.

Market Movers

FTSE 100 (UKX) 8,077.58 -0.34% FTSE 250 (MCX) 20,287.10 -0.55% techMARK (TASX) 4,579.05 -0.25%

FTSE 100 - Risers

SEGRO (SGRO) 687.80p 0.85% International Consolidated Airlines Group SA (CDI) (IAG) 304.00p 0.66% Smith (DS) (SMDS) 539.00p 0.37% InterContinental Hotels Group (IHG) 9,904.00p 0.36% Rentokil Initial (RTO) 392.80p 0.31% Marks & Spencer Group (MKS) 379.30p 0.29% Haleon (HLN) 381.40p 0.21% Pearson (PSON) 1,268.00p 0.20% Unite Group (UTG) 794.00p 0.13% Land Securities Group (LAND) 560.00p 0.09%

FTSE 100 - Fallers

Smurfit Westrock (DI) (SWR) 4,067.00p -1.72% Barclays (BARC) 256.55p -1.42% CRH (CDI) (CRH) 7,386.00p -1.12% Scottish Mortgage Inv Trust (SMT) 929.40p -1.11% Standard Chartered (STAN) 973.00p -1.08% Intermediate Capital Group (ICG) 2,054.00p -1.06% Anglo American (AAL) 2,314.50p -1.01% 3i Group (III) 3,523.00p -0.98% Rio Tinto (RIO) 4,650.50p -0.91% NATWEST GROUP (NWG) 396.50p -0.88%

FTSE 250 - Risers

Greencoat UK Wind (UKW) 126.50p 2.02% Genus (GNS) 1,536.00p 1.32% Carnival (CCL) 1,838.00p 0.93% Endeavour Mining (EDV) 1,430.00p 0.63% Syncona Limited NPV (SYNC) 100.20p 0.60% Spirent Communications (SPT) 179.00p 0.39% Renewi (RWI) 800.00p 0.38% Edinburgh Worldwide Inv Trust (EWI) 187.40p 0.32% Ithaca Energy (ITH) 104.30p 0.29% Sirius Real Estate Ltd. (SRE) 77.75p 0.26%

FTSE 250 - Fallers

Discoverie Group (DSCV) 686.00p -3.52% Hilton Food Group (HFG) 892.00p -3.46% Bridgepoint Group (Reg S) (BPT) 350.60p -3.20% PZ Cussons (PZC) 80.10p -2.44% Lancashire Holdings Limited (LRE) 645.00p -2.42% Grafton Group Ut (CDI) (GFTU) 932.70p -2.30% IntegraFin Holding (IHP) 344.00p -2.27% Trainline (TRN) 417.60p -2.06% Marshalls (MSLH) 285.00p -2.06% Kier Group (KIE) 145.00p -2.03%