Weak UK retail sales drags FTSE 100 lower – CityAM : CityAM
London’s FTSE 100 extended yesterday’s sharp losses into this morning as weak UK retail sales figures weighed on market sentiment.
The capital’s premier index slipped 0.22 per cent to 7,043.22 points during the first two hours of trading on Friday.
The blue-chip index is on track to register its worst week since January.
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Poor retail sales figures released by the Office for National Statistics this morning fed into concerns that the economic rebound from the depths of the Covid crisis may be losing steam. Sales dropped 2.5 per cent between June and July of this year.
Meanwhile, the ONS said government borrowing had come in much lower than official forecasts published by the Office for Budget Responsibility in July. The government borrowed £10.4bn in the month, down £10.1bn in the same month last year, highlighting that the spectre of the Covid crisis over the economy is receding.
FTSE 100’s performance this week (figures may differ due to timing. SOURCE: LSE)
Danni Hewson, financial analyst at AJ Bell, said: “After Thursday’s heavy losses, investors will be relieved to see only a modest drop in the FTSE 100 this morning.”
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“Markets may struggle for direction until the latter part of next week given a dearth of corporate and economic updates with the Jackson Hole summit kicking off next Thursday and giving central bankers and other economic decision makers a chance to outline their plans for the next phase of the pandemic recovery.”
The mid-cap FTSE 250 edged down 0.01 per cent to 23,603.61 points, while AIM shares lost 0.09 per cent to drop to 1,259.53 points.
The pound lost ground on the dollar, weakening 0.18 per cent to $1.3615.
Winners and losers
Despite a decline in retail sales, retail stocks led the table of the biggest risers on the FTSE during morning trading.
Luxury fashion retailer Burberry was the best performer in the morning, climbing 1.88 per cent to 1,846.50p, while supermarket Sainsbury’s added 1.76 per cent to reach 294.30p.
JD Sports was the third biggest riser, up 1.59 per cent to 984.40p.
Miners led losses on among the blue-chip stocks. Antofagasta dropped 2.17 per cent to 1,374.50p.
Brewer Diageo dipped 1.75 per cent to 3,504.50p, while food services group Compass dipped 1.4 per cent to 1,446p.