London midday: Stocks fall further as investors eye US inflation reading

(Sharecast News) - London stocks had fallen further by midday on Friday as investors mulled a smaller-than-expected rise in retail sales but better-than-expected borrowing figures, ahead of a key US inflation reading. The FTSE 100 was down 0.9% at 8,030.63.

Figures 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 data 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."

In equity markets, water companies were under the cosh, having gained on Thursday after regulator Ofwat announced its final determination for the five-year period to 2030, saying that average bills would increase by 36% in England and Wales, the equivalent of around £31 per year.

Severn Trent and United Utilities were the worst performers on the FTSE 100, while FTSE 250 listed Pennon also fell.

International Distribution Services was little changed after the UK government cleared the £3.6bn sale of the Royal Mail parent company to Czech billionaire Daniel Kretinsky's EP Group.

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 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) 8,030.63 -0.92% FTSE 250 (MCX) 20,257.90 -0.69% techMARK (TASX) 4,550.53 -0.87%

FTSE 100 - Risers

LondonMetric Property (LMP) 178.20p 1.48% Rentokil Initial (RTO) 396.50p 1.25% SEGRO (SGRO) 688.80p 1.00% British Land Company (BLND) 353.60p 0.57% Land Securities Group (LAND) 562.50p 0.54% Unite Group (UTG) 797.00p 0.50% Frasers Group (FRAS) 612.50p 0.49% Sainsbury (J) (SBRY) 272.60p 0.44% Hikma Pharmaceuticals (HIK) 1,941.00p 0.31% National Grid (NG.) 924.00p 0.26%

FTSE 100 - Fallers

Severn Trent (SVT) 2,509.00p -2.53% United Utilities Group (UU.) 1,037.50p -2.49% Smurfit Westrock (DI) (SWR) 4,037.00p -2.44% Rolls-Royce Holdings (RR.) 566.20p -2.31% Intermediate Capital Group (ICG) 2,036.00p -1.93% Anglo American (AAL) 2,293.00p -1.92% Melrose Industries (MRO) 538.00p -1.90% Beazley (BEZ) 797.00p -1.85% NATWEST GROUP (NWG) 392.70p -1.83% Standard Chartered (STAN) 966.00p -1.79%

FTSE 250 - Risers

Ocado Group (OCDO) 303.80p 2.57% Jupiter Fund Management (JUP) 84.80p 2.05% IP Group (IPO) 52.20p 1.75% Raspberry PI Holdings (RPI) 515.75p 1.53% HarbourVest Global Private Equity Limited A Shs (HVPE) 2,525.00p 1.20% Supermarket Income Reit (SUPR) 67.70p 1.20% W.A.G Payment Solutions (WPS) 79.80p 1.01% NCC Group (NCC) 145.80p 0.97% Asia Dragon Trust (DGN) 422.00p 0.96% SThree (STEM) 268.50p 0.94%

FTSE 250 - Fallers

Hochschild Mining (HOC) 204.50p -5.32% European Opportunities Trust (EOT) 768.00p -3.40% Allianz Technology Trust (ATT) 400.00p -3.26% Mony Group (MONY) 189.00p -2.83% Pennon Group (PNN) 571.00p -2.81% Aston Martin Lagonda Global Holdings (AML) 102.30p -2.76% Foresight Group Holdings Limited NPV (FSG) 397.00p -2.46% Future (FUTR) 938.50p -2.44% Just Group (JUST) 160.60p -2.31% IntegraFin Holding (IHP) 344.00p -2.27%