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09 Feb 2021 | 11:06

London midday: Stocks tread water; BRC retail sales in focus

(Sharecast News) - London stocks were still treading water by midday on Tuesday, with online supermarket Ocado in the red after its full-year results. The FTSE 100 was down 0.1% at 6,520.03, while sterling was trading near three-month highs against the dollar, up 0.3% at 1.3778.

IG market analyst Chris Beauchamp said: "The February rally has finally run into some tougher ground, with European markets on the slide after a week of gains that has, for the most part, put the global equity market back on an upward path.

"The strength of this equity rally continues to take everyone by surprise, but earnings season has delivered enough good news to hold stocks near their current high levels, particularly in the case of market darlings like the tech sector, and with more fiscal stimulus on the way investors seem content to stick with equities even after the bounce from the October low."

Investors were mulling figures released earlier by the British Retail Consortium, which showed retail sales rose in January at the slowest pace since the depths of the first Covid-19 lockdown as non-essential spending was hit by consumer concerns.

Total retail sales fell 1.3% in January as like-for-like sales rose 7.1% from a year earlier. In the three months to January, in-store sales of non-food items dropped 36.5% and by 20% on a like-for-like basis. Food sales rose 7.5% on a like-for-like basis and 7.9% overall.

Helen Dickinson, the BRC's chief executive, said: "January saw retail sales growth decline to its lowest level since May of last year. The current lockdown has hit non-essential retailers harder than in November, with the new variant hampering consumer confidence and leading customers to hold back on spending - especially on clothing and footwear."

In equity markets, Ocado fell despite reporting a 68.8% rise in full-year core earnings.

Spreadex analyst Connor Campbell said "it appears investors have potentially been put off by Ocado's planned £700m in capital expenditure, and a subdued outlook for UK retail growth in the coming 12 months".

Richard Hunter, head of markets at Interactive Investor, said: "While the combination of a grocer benefiting from the current pandemic and a high tech business gives investors two bites at the cherry, the stratospheric rise of the share price may have prompted some to take profits, with the market consensus of the shares having recently slipped to a sell as new developments are awaited."

TUI nudged lower as the travel company slumped to a €699m first-quarter loss as Covid-19 lockdowns continued to hammer demand.

Going the other way, Micro Focus gained after the software firm reinstated its dividend, despite a near $3bn impairment charge pushing it deep into the red.

Electrocomponents rallied after an upgrade to 'overweight' at JPMorgan, while Spirent Communications was boosted by an upgrade to 'buy' at Canaccord.

Bellway rose after the housebuilder hailed record first-half completions amid "robust" demand. Rivals Taylor Wimpey and Berkeley also pushed higher.

Market Movers

FTSE 100 (UKX) 6,520.03 -0.05% FTSE 250 (MCX) 21,181.14 0.45% techMARK (TASX) 4,135.98 0.27%

FTSE 100 - Risers

Taylor Wimpey (TW.) 165.05p 2.04% Whitbread (WTB) 3,264.00p 1.97% Royal Dutch Shell 'A' (RDSA) 1,389.20p 1.73% Royal Dutch Shell 'B' (RDSB) 1,325.40p 1.55% Compass Group (CPG) 1,481.00p 1.51% NATWEST GROUP PLC ORD 100P (NWG) 174.65p 1.19% Berkeley Group Holdings (The) (BKG) 4,357.00p 1.18% M&G (MNG) 184.85p 1.07% BP (BP.) 264.50p 0.97% Persimmon (PSN) 2,792.00p 0.94%

FTSE 100 - Fallers

Ocado Group (OCDO) 2,667.00p -2.88% Experian (EXPN) 2,547.00p -2.79% Smurfit Kappa Group (SKG) 3,462.00p -2.31% Smith (DS) (SMDS) 357.50p -2.27% Evraz (EVR) 511.80p -2.25% Avast (AVST) 492.80p -1.73% Kingfisher (KGF) 272.50p -1.62% Just Eat Takeaway.Com N.V. (CDI) (JET) 7,776.00p -1.62% Relx plc (REL) 1,801.50p -1.53% SSE (SSE) 1,425.00p -1.38%

FTSE 250 - Risers

Spirent Communications (SPT) 244.50p 4.71% Micro Focus International (MCRO) 513.80p 4.49% Electrocomponents (ECM) 980.00p 3.92% Hays (HAS) 149.90p 3.59% Babcock International Group (BAB) 242.90p 3.36% Petrofac Ltd. (PFC) 122.35p 3.03% Capita (CPI) 39.24p 2.99% Bellway (BWY) 3,120.00p 2.97% Network International Holdings (NETW) 348.80p 2.89% Capital & Counties Properties (CAPC) 157.20p 2.61%

FTSE 250 - Fallers

HICL Infrastructure (HICL) 169.80p -2.64% FirstGroup (FGP) 80.50p -2.42% Helios Towers (HTWS) 167.80p -1.99% International Public Partnerships Ltd. (INPP) 170.80p -1.84% PureTech Health (PRTC) 377.00p -1.82% Drax Group (DRX) 384.60p -1.69% Hochschild Mining (HOC) 230.20p -1.62% Just Eat Takeaway.Com N.V. (CDI) (JET) 7,776.00p -1.62% Dixons Carphone (DC.) 112.40p -1.23% IWG (IWG) 355.20p -1.22%
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