17th Sep 2021 08:42
(Alliance News) - European equities opened higher on Friday, with the FTSE 100 making stellar strides, shaking off a surprising fall in UK retail sales last month.
The retail sector, which has been hit by supply chain worries, also suffered from consumers spending their cash in the hospitality sector as lockdown measures have eased.
The FTSE 100 index was up 30.40 points, or 0.4%, at 7,057.88. The mid-cap FTSE 250 index was up 96.71 points, 0.4%, at 23,729.55. The AIM All-Share index was up 5.97 points, 0.5%, at 1,278.11.
The Cboe UK 100 index was up 0.4% at 701.94. The Cboe 250 also was up 0.4%, at 21,454.30. The Cboe Small Companies was marginally lower at 15,504.69.
In mainland Europe, the CAC 40 stock index in Paris and the DAX 30 in Frankfurt were 0.8% higher.
Focus in equity markets will be on inflation again on Friday, with eurozone consumer price figures released at 1000 BST, after the Bank of England releases consumer inflation expectations at 0930 BST. It follows data earlier this week that showed UK inflation accelerated to 3.2% in August.
"This morning's Bank of England/Kantar update on inflation expectations for the next twelve months may therefore receive more attention than usual," analysts at Lloyds commented.
"UK households' expectations for inflation in the year ahead has continued to drift lower, but it will be interesting to see whether it starts to move higher in the latest survey.
UK retail sales declined in August from the month before, figures on Friday showed, with more consumers going out as lockdown measures have eased, hurting the grocery sector.
Retail sales declined 0.9% in August from July, confounding expectations of 0.5% growth, according to market consensus cited by FXStreet. It was a second straight month of lower sales. In July, they had declined 2.5% from June.
Excluding fuel, UK retail sales declined 1.2% monthly and 0.9% yearly. Fuel sales rose 1.5% in August, though are still 1.2% below pre-virus levels.
"Shoppers and shops were stymied by shortages in August. Keeping the shelves full was a real battle, especially for department stores, which is one reason why we spent less in these stores in August," Hargreaves Lansdown analyst Sarah Coles commented.
The pound was trading at USD1.3797 on Friday morning following the data, up from USD1.3765 late Thursday.
The euro stood at USD1.1779, improved from USD1.1762 late Thursday. Against the yen, the dollar was trading at JPY109.84, up from JPY109.65.
In London, AIM-listed Safestay jumped 22% after it put itself up for sale as part of a strategic review. It now has a market capitalisation of GBP15.8 million.
The London-based hostels operator noted it has received a "very early stage and highly conditional approach" from a potential buyer.
"Individual and group bookings are coming in for the winter and for 2022 and underpin our confidence of returning to pre-Covid levels of trading. We believe strongly in the appeal of the Safestay brand. However, we recognise that this is a natural point, as we relaunch the business post-Covid, to undertake a strategic review, in order to maximise value for all shareholders. This process will reveal whether there is additional value for shareholders compared to the upside we believe we can deliver," Chair Larry Lipman said.
Safestay has appointed PricewaterhouseCoopers as financial adviser for the strategic review and formal sale process.
Airline stocks were on the rise as travelling is set to be made cheaper and more straightforward for doubled-jabbed UK holidaymakers.
The green and amber lists are expected to be merged to form one category of low-risk countries while the number of destinations on the red list will be reduced.
There is also speculation that fully vaccinated arrivals will no longer need to take a pre-departure lateral flow test or a post-arrival PCR test.
This would save travellers around GBP100 per trip.
British Airways parent International Consolidated Airlines Group rose 4.2%, Wizz Air climbed 1.7% and Ryanair was up 1.3%.
Glencore was inched up 0.1% as Morgan Stanley raised the miner to Overweight from Equal Weight. Peer Anglo American was cut to Equal Weight from Overweight, however, and its stock was down 3.6%.
Meanwhile, Barclays double-upgraded HSBC to Overweight from Underweight. It also lifted Standard Chartered to Equal Weight from Underweight. HSBC shares were 1.9% higher, while StanChart rose 1.1%.
Brent oil was quoted at USD75.30 a barrel early Friday, up from USD75.00 at the London equities close on Thursday. Gold was quoted at USD1,763.60 an ounce, up from USD1,756.55.
Stocks were largely higher in Asia. The Nikkei 225 in Tokyo closed up 0.6%. In China, the Shanghai Composite rose 0.2% and the Hang Seng Index in Hong Kong was 0.5% higher in late trade. However, in Sydney, the S&P/ASX 200 ended 0.8% lower.
By Eric Cunha; [email protected]
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