FTSE 100 Gains 0.2%, FTSE 250 Slightly Down; Retail Sales Dip in UK

FTSE 100 Index Gains – Stocks in London opened with mixed performance on Tuesday, ahead of the testimony by US Federal Reserve Chair Jerome Powell. BP and Shell faced declines as BP anticipates a $2 billion impairment charge.

The FTSE 100 index opened 0.2% higher, gaining 18.23 points to reach 8,211.72. Meanwhile, the FTSE 250 dipped 0.1% to 20,782.27, and the AIM All-Share edged down to 774.96.

The Cboe UK 100 rose 0.2% to 818.02, while the Cboe UK 250 fell 0.1% to 18,077.01. The Cboe Small Companies index saw marginal gains, reaching 17,124.36.

Across Europe, the CAC 40 in Paris declined by 0.6%, and the DAX 40 in Frankfurt was down 0.4%.

UK Retail Sales Dip in June Amid Cooler Weather, BRC-KPMG Report Reveals

In the UK, retail sales in June saw a decline due to cooler weather affecting purchases of clothing and footwear. According to the BRC-KPMG retail sales monitor, total retail sales dropped by 0.2% year-on-year, contrasting with a 4.9% growth in June 2023. This was above the 3-month average decline of 1.1% and below the 12-month average growth of 1.5%. May had seen a 0.7% rise following a 4.0% April decline.

Helen Dickinson, Chief Executive of the British Retail Consortium, commented: “Retail sales performed poorly in June as the cooler weather during the first half of the month dulled consumer spending.”

In the US, Wall Street closed with mixed results on Monday: the Dow Jones Industrial Average declined by 0.1%, the S&P 500 increased by 0.1%, and the Nasdaq Composite rose by 0.3%, marking another record closing high for the latter two indices.

Investors are awaiting comments from Federal Reserve officials, particularly Jerome Powell’s testimony to Congress, which may provide insights into potential rate cuts. Ipek Ozkardeskaya from Swissquote Bank noted, “The first day of testimony is crucial for gauging the overall tone and key messages.”

Looking ahead, Thursday’s US consumer price index data will be closely watched to assess progress towards the Fed’s 2% inflation target.

The pound was quoted at $1.2811 early on Tuesday in London, slightly lower compared to Monday’s close at $1.2829. The euro stood at $1.0828, down from $1.0833, while against the yen, the dollar traded at JP¥160.77, up from JP¥160.71.

In the FTSE 100, BP saw a 3.5% decline, expecting a potential $2 billion impairment charge in Q2 due to a refining review in Germany announced in March. Lower refining margins may also impact earnings by $500 million to $700 million.

Shell declined by 0.4% amid broader negative sentiment.

FTSE 250’s Hunting Posts 7.0% Surge on Strong Order Book and H1 Earnings Exceeding Expectations

In the FTSE 250, Hunting surged 7.0% after reporting a robust sales order book of $700 million as of June 30, compared to $565 million at year-end 2023. Earnings before interest, tax, depreciation, and amortization for H1 2024 are expected between $59 million and $61 million, exceeding management’s expectations by 22% annually. The outlook for 2024 and 2025 remains positive, with anticipated stronger performance in H2.

Conversely, PageGroup plummeted by 11% following a profit warning, citing a 12% annual drop in Q2 gross profit to £224.3 million due to reduced activity levels amidst geopolitical and macro-economic uncertainties. Full-year 2024 operating profit expectations have been revised to approximately £60 million.

In London’s small-cap market, Capita surged 21% after announcing the sale of its standalone software business, Capita One, to Orchard Information Systems for £200 million. The move is part of Capita’s strategy to focus on core activities.

In Asia, the Nikkei 225 in Tokyo gained 2.0%, while the Shanghai Composite rose by 1.3%. The Hang Seng in Hong Kong closed marginally lower, and the S&P/ASX 200 in Sydney increased by 0.9%.

Brent oil traded at $85.43 a barrel early on Tuesday in London, down from $86.16 late Monday.

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