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London open: Stocks in the red as consumer confidence slides, retail sales beat
London stocks fell in early trade on Friday as investors mulled a slide in consumer confidence but better-than-expected retail sales data.
At 0840 BST, the FTSE 100 was down 0.6% at 8,279.09.
Figures released earlier by the Office for National Statistics showed that retail sales hit their highest level in more than two years in August, ahead of expectations.
Retail sales volumes rose 1% in August, following an upwardly revised 0.7% uptick in July. Volumes were at their highest levels since July 2022. Analysts had been expecting a 0.4% increase.
Elsewhere, a survey showed UK consumer confidence fell sharply in September despite the more stable economic backdrop, as people nervously wait on next month’s Budget.
The latest GfK consumer confidence index came in at -20, a seven-point slide on August’s reading.
All sub-measures fell. The index for expectations for personal finances in the coming 12 months fell nine points to -3, while the measure of predictions for the economic situation tumbled 12 points to -27.
The major purchase index lost 10 points to -23, while the savings index also fell 10 points, to 23.
Prior to September’s survey, consumer confidence had been improving, boosted by inflation returning to near target, a cut in interest rates earlier in the summer and a new government.
However, economic growth appears to have stalled. Recent data showed GDP stagnated for the second consecutive month in July, disappointing analysts who had been expecting in a 0.2% uplift.
Investors were also mulling news that higher-than-expected borrowing in August pushed public sector net debt to 100% of GDP. According to the ONS , public sector borrowing – the difference between spending and tax revenue -reached £13.7bn in August.
That was £3.3bn more than August 2023 and the third-highest August borrowing since monthly records began in January 1993. Once the impact of the pandemic is stripped out, it is the highest August borrowing on record.
It was also £2.5bn higher than the £11.2bn forecast by the Office for Budget Responsibility, the fiscal watchdog.
Since the start of the financial year in April, borrowing has totalled £64bn, £6.2bn higher than the OBR forecast in March.
Central government tax receipts jumped £15bn in August, but National Insurance contributions fell – due to the reduction in the main rates announced earlier in the year – while benefits rose in line with inflation.
Inflation also pushed up running costs for public services.
As a result, public sector net debt (excluding public sector banks) was provisionally estimated by the ONS at £2.768trn, or around 100% of GDP.
That is 4.3 percentage points more than at the end of August 2023, and means debt remains at levels last seen in the early 1960s.
The figures will make for difficult reading for new chancellor Rachel Reeves, who is preparing for her first Budget next month. Prime minister Keir Starmer has already warned it will be “painful” after a £22bn black hole was identified in the public finances.
In equity markets, luxury fashion brand Burberry was under the cosh ahead of its demotion from the FTSE 100.
Elsewhere, Dr Martens tumbled after the company’s biggest shareholder, IngreGrsy, sold around 70m shares in the iconic boot maker in a placing. According to Bloomberg, the shares were placed at 57.85p each, which is discount of around 9.8% to the last closing share price.
On the upside, Volution gained as it agreed to buy Fantech Group in Australasia from Elta Group for up to AUD280m (£144m).
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Aib Group Plc | +0.76% | +3.50 | 464.00 |
| 2 |  |
National Grid Plc | +0.59% | +6.00 | 1,029.00 |
| 3 |  |
Relx Plc | +0.39% | +14.00 | 3,637.00 |
| 4 |  |
United Utilities Group Plc | +0.19% | +2.00 | 1,057.50 |
| 5 |  |
Severn Trent Plc | +0.04% | +1.00 | 2,650.00 |
| 6 |  |
Smurfit Kappa Group Plc | +0.00% | +0.00 | 3,656.00 |
| 7 |  |
Bp 8%pf | +0.00% | +0.00 | 154.50 |
| 8 |  |
Bp 9% 2nd Prf | +0.00% | +0.00 | 161.00 |
| 9 |  |
Compass Group Plc | +0.00% | +0.00 | 2,421.00 |
| 10 |  |
Gresham House Renewable Energy Vct 1 Plc | +0.00% | +0.00 | 45.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ck Infrastructure Holdings Limited | -4.28% | -24.05 | 537.70 |
| 2 |  |
Kingfisher Plc | -3.04% | -10.10 | 321.70 |
| 3 |  |
Standard Chartered Plc | -2.31% | -18.00 | 761.60 |
| 4 |  |
Jd Sports Fashion Plc | -2.24% | -3.50 | 153.00 |
| 5 |  |
Croda International Plc | -2.19% | -89.00 | 3,976.00 |
| 6 |  |
Wise Plc | -2.16% | -14.50 | 656.00 |
| 7 |  |
Next Plc | -1.92% | -200.00 | 10,190.00 |
| 8 |  |
Ferguson Enterprises Inc. | -1.86% | -290.00 | 15,340.00 |
| 9 |  |
Antofagasta Plc | -1.83% | -34.00 | 1,824.00 |
| 10 |  |
Bp Plc | -1.80% | -7.50 | 409.95 |
US close: Dow Jones rallies more than 520 points to fresh record
Wall Street stocks closed sharply higher on Thursday as traders celebrated the Federal Reserve’s decision to slash interest rates by half a percentage point.
At the close, the Dow Jones Industrial Average was up 1.26% at 42,025.19, while the S&P 500 advanced 1.70% to 5,713.64 and the Nasdaq Composite saw out the session 2.51% firmer at 18,013.98.
The Dow closed 522.09 points higher on Thursday, easily reversing losses recorded in the previous session as the blue-chip index steamed ahead to a fresh record high.
The US central bank cut its overnight lending rate to a range of 4.75% to 5% over night, down from 5.25% to 5.5%, which surprised many investors and analysts with its first rate reduction in four years, most of which were expecting a 0.25% cut.
On the macro front for Thursday, Americans lined up for unemployment benefits at a decelerated pace in the week ended 14 September, according to the Labor Department, beating market expectations. Initial jobless claims fell by 12,000 to 219,000, a four-month low that, while better than market expectations for a reading of 230,000, remained well above the average seen earlier in 2024.
Elsewhere, manufacturing activity in the Philadelphia region unexpectedly expanded in September after contracting sharply the previous month, though current indicators for the industry still remain mixed. According to the Federal Reserve Bank of Philadelphia, the current general activity index for manufacturing jumped from a seven-month low of 7.0 in August to 1.7 last month, surpassing the -1.0 reading expected by economists
Finally, existing US homes sales fell in August despite a fall in mortgage rates during the month, according to data published on Thursday. Sales decreased 2.5% month on month to a 3.86 million, the National Association of Realtors said. House prices continued to rise, with the median on an existing home rising 3.1% to a new record high of $416,700.
Friday newspaper round-up: Workers’ rights, Wimbledon, Glencore execs
Trade union leaders will meet senior ministers on Saturday for crunch talks on the government’s workers’ rights package, as the government looks to head off a potentially damaging row at Labour conference. General secretaries from the 11 unions affiliated to Labour will meet Angela Rayner, the deputy prime minister, and Jonathan Reynolds, the business secretary, on the eve of conference to thrash out details of the package, sources have told the Guardian. – Guardian
It appears to be game, set and match for the All England Lawn Tennis Club (AELTC) in its lengthy battle to build 39 new courts on Wimbledon Park after the Greater London Authority recommended that the project should be approved. The proposals have been deeply controversial, with local residents warning of 10 years of disruption as well as the creation of a huge “tennis industrial complex” that would lie silent for much of the year. However, officers at the GLA recommended on Thursday that the deputy mayor should grant conditional planning permission at a public hearing on Friday 27 September. – Guardian
A US energy giant has chosen South Yorkshire to host a landmark £1.5bn factory building the next generation of nuclear reactors in a major boost for the region. Holtec, a privately owned nuclear company headquartered in Florida, is looking at sites across the county including around the city of Doncaster, where Energy Secretary Ed Miliband has his constituency. – Telegraph
Angela Rayner is facing a European court battle with private equity baron Guy Hands over military housing owned by the financier. Mr Hands’s Annington Homes, which is owned through his private equity firm, Terra Firma, has filed a legal claim against the Housing Secretary with the European Court of Human Rights. The case centres on the Leasehold and Freehold Reform Act, which was introduced by the previous government in May but which now falls under Ms Rayner’s brief. – Telegraph
A senior judge has lifted orders that prevented the naming of five former Glencore executives who investigators have linked to a long-running bribery case. Officials at the Serious Fraud Office had applied for orders originally to protect their investigations into alleged offences by individual executives after the FTSE 100 mining company pleaded guilty two years ago to a corporate charge of paying about £22 million in bribes. – The Times
Journalists at Guardian Media Group have revolted against a planned sale of The Observer over concerns that it could harm the financial security of staff members. Members of the National Union of Journalists have voted in favour of a motion criticising the “flawed analysis” behind a decision to offload the Sunday title to Tortoise Media. – The Times
