Banks, miners drag FTSE 100 lower; retail sales surge

UK stocks flat as banks negate strong retail sales data
UK stocks flat as banks negate strong retail sales data Copyright (c) Copyright Thomson Reuters 2021. Click For Restrictions -
Copyright (c) Copyright Thomson Reuters 2021. Click For Restrictions -
By Reuters
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By Shivani Kumaresan

(Reuters) -London's FTSE 100 fell on Friday and was set to post a weekly loss, as banks and mining stocks declined, while retail sales jumped as the country reopened after months of severe business restrictions.

The blue-chip index slid 0.6%, with banks, including HSBC Holdings, Prudential Plc, and Standard Chartered, being the biggest drag.

Miners Anglo American Plc, Glencore Plc, and Rio Tinto fell between 0.4% and 0.8%. [METL]

Retail sales surged by 9.2% in April, when non-essential shops reopened after months of closure due to COVID-19 restrictions, their biggest jump since a previous reopening in June, official data showed.

"We suspect consumer spending will remain heavily targeted towards online retailers, suggesting traditional high street stores will continue to struggle," said James Smith, developed markets economist at ING.

"Interestingly, April's rebound in various spending categories didn't come at the expense of online shopping; (it is) increasing and still sits some 50% above pre-pandemic levels."

The domestically focussed mid-cap FTSE 250 index fell 0.3%.

The FTSE 100 has gained 8.2% year-to-date on optimism about economic recovery. But the index has been trading in a tight range recently as higher inflation has stoked fears that central banks might pare back their support sooner than expected.

A Reuters poll found that the UK economy will expand 5.9% this year, much stronger than the 5.0% forecast last month, as a fast-moving coronavirus vaccine programme allows businesses to reopen and lifts confidence.

Biffa rose 5.2% to the top of mid-cap index after its proposal to buy the collections business and certain recycling assets from Viridor Waste Management Ltd for 126 million pounds ($178.87 million).

Card Factory slid 13.7% after reporting a marginal drop in like-for-like store sales, compared with 2019, after the UK began reopening stores and eased restrictions in April.

(Reporting by Shivani Kumaresan in Bengaluru; Editing by Subhranshu Sahu and Uttaresh.V)

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