FTSE down on unexpected retail sales growth dip for August
The UK’s top index looked set to continue a two-day flat line this morning until a report from the Office for National Statistics (ONS) said retail sales growth had unexpectedly fallen in August. The blue-chip index also wasn’t helped by a drop in the value of the pound against the dollar and euro.
Rob Hull
shareprices.com - Thursday, September 16, 2010
The FTSE 100 index is almost 16 points down on Wednesday’s close value, shedding 0.3 per cent to drop to 5,546.58 at 09:47GMT.
Sentiment seemed to be remaining in line with the previous session as little economic and corporate data were not sufficient signal pointers for investors on the state of the economy and individual sectors.
Retailer Next (LON:NXT) was the headline gainer on the top London index yesterday after it retained its full-year forecast after confirming operating profits were meeting targets in the opening half of 2010.
Investors were buoyed by the results and sourced other retail blue-chip groups on Wednesday after the high street fashion outlet had been downgraded on Tuesday by Societe Generate to “sell” from “hold”. However, the data released today claiming a 0.5 per cent fall in last month’s sales volumes and a revision of July’s sales growth down to 0.8 per cent from 1.1 per cent signalling a downturn in retail fortunes at the beginning of the half term.
With retail stock falling out of favour, Kingfisher (LON:KGF) – the biggest home improvement retailer in the UK – beat half year forecasts with a 23 per cent gain in half-year profits.
The parent group of B&Q moved to the peak of the FTSE 100 gainers charts this morning, posting a share price improvement of more than 2.9 per cent.
Along with retailers, British telecoms were brought to the forefront of investor minds following a wide-ranging note on the sector from Goldman Sachs.
The investment bank raised its rating on Cable & Wireless Worldwide (LON:CW) to “buy” from “neutral” edging the stock towards the top of the blue-chip risers with 2.8 per cent gains.
Goldman Sachs also retained it “neutral” rating on BT Group (LON:BT.A), however Morgan Stanley downgraded it on fears the pensions regulator might shorten the firm’s proposed deficit reduction schedule.
This dropped the telecommunications stock to the opposite end of the FTSE 100 performance charts, shedding over three per cent to become the biggest blue-chip loser of the session so far.
The rest of the market appears to be treading water still after hitting a four month high earlier in the week.
Eurasian Natural Resources (LON:ENRC) is the only other real notable FTSE 100 gainer after Credit Suisse said it expects the miner to outperform. The share price grew three per cent as a result.
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