ADVFN Morning London Market Report: Friday 20 November 2020

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London open: Stocks edge higher after retail sales, borrowing figures

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London stocks edged higher in early trade on Friday as investors digested the latest UK retail sales and borrowing data.

At 0900 GMT, the FTSE 100 was up 0.3% at 6,350.32.

Figures released earlier by the Office for National Statistics showed retail sales rose for the sixth consecutive month in October, underpinned by the online segment, while government borrowing hit its highest level on record for that month but was still lower than expected.

Public sector net borrowing was £22.3bn in October, up £10.8bn from the same month last year and marking the sixth-highest borrowing in any month since records began in 1993, as the government continued to spend amid the pandemic. However, it was lower than the consensus forecast of £37.2bn.

Separate figures from the ONS showed retail sales rose 1.2% on the month in October, down from 1.5% growth in September but ahead of expectations for no growth. On the year, sales were 5.8% higher, coming in ahead of expectations for a 4.2% increase.

Deputy national statistician for Economic Statistics Jonathan Athow said: “Despite the introduction of some local lockdowns in October, retail sales continued its recent run of strong growth.

“Feedback from shops suggested some consumers may have brought forward their Christmas shopping, ahead of potential further restrictions. Online stores also saw strong sales, boosted by widespread offers.

“However, the slow recovery in clothing sales has stalled after five consecutive months of increased sales.”

Capital Economics said: “The decent rise in retail sales in October and the smaller increase in government borrowing suggests that the economy held up better than expected when the Covid-19 tiered restrictions were being implemented.

“But the second lockdown that began in November will probably prompt retail sales to fall again and public borrowing to rise faster.”

In equity marketsHargreaves Lansdown was a high riser after Barclays said in a note that it was one of its favoured names in the investment platform sector.

Croda International was boosted by an upgrade to ‘buy’ at Citi, which said the company has “a good nose for attractive deals” following its recent acquisition of emerging markets fragrance player Iberchem.

Gold miner Hochschild Mining shone as it reinstated its dividend and said operating costs in the current financial year would be lower than previous guidance.

Vectura rallied after announcing late on Thursday that GlaxoSmithKline had lost an appeal to overturn an $89.7m verdict a jury handed down after finding that the pharmaceutical giant’s Ellipta inhalers infringed a patent belonging to it.

Accounting software firm Sage slumped even after it lifted its dividend and reported an 8.5% rise in organic recurring revenue rose to £1.6bn, driven by growth from existing and new customers, principally in North America and Northern Europe.

Helios Towers tumbled after Millicom Holding sold 52 million shares in the telecommunications company – a 5.2% stake – at 155p each. This represents an 11.6% discount to the closing share price on Thursday.

 

Top 10 FTSE 100 Risers

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76.4% of retail CFD accounts lose money.

 

# Name Change Pct Change Cur Price
1 Tui Ag +3.91% +16.50 438.80
2 Bae Systems Plc +3.27% +16.60 524.40
3 Carnival Plc +2.39% +28.00 1,200.50
4 Croda International Plc +1.95% +122.00 6,370.00
5 Hargreaves Lansdown Plc +1.94% +28.50 1,497.00
6 Smiths Group Plc +1.76% +27.00 1,557.50
7 Marks And Spencer Group Plc +1.68% +2.20 132.95
8 Rolls-royce Holdings Plc +1.61% +1.59 100.15
9 Bunzl Plc +1.60% +38.00 2,418.00
10 Intertek Group Plc +1.53% +92.00 6,124.00

 

Top 10 FTSE 100 Fallers

Sponsored by
ii
76.4% of retail CFD accounts lose money.

 

# Name Change Pct Change Cur Price
1 Sage Group Plc -10.03% -68.20 611.60
2 Micro Focus International Plc -5.38% -18.80 330.90
3 Smurfit Kappa Group Plc -2.73% -88.00 3,134.00
4 Bt Group Plc -2.46% -3.15 124.85
5 Itv Plc -2.44% -2.34 93.68
6 British Land Company Plc -2.06% -9.90 470.20
7 Smith (ds) Plc -1.87% -6.10 320.90
8 Johnson Matthey Plc -1.83% -44.00 2,364.00
9 Halma Plc -1.36% -33.00 2,390.00
10 Persimmon Plc -1.17% -34.00 2,861.00

 

Friday newspaper round-up: Marks & Spencer, Starling, Hinkley Point B

The fashion chains Peacocks, Jaeger, Austin Reed and Jacques Vert have collapsed into administration, putting nearly 4,800 jobs at risk. The retailers are all part of entrepreneur Philip Day’s Edinburgh Woollen Mill Group (EWM), which warned last month it was on the brink of collapse. The Cardiff-based budget fashion chain Peacocks, which Albert Peacock founded as a penny bazaar in Warrington, Cheshire, in 1884, employs 4,369 staff across its 423 stores. – Guardian

Marks & Spencer will keep 400 stores open until midnight in Christmas week as desperate high street retailers scramble to recoup billions of pounds of sales lost to lockdown restrictions. The UK’s biggest clothing retailer said its “longest-ever” store opening hours would kick in on Monday 21 December, with two-thirds of its 600 shops opening until midnight for a run of three days. Unlike many of its rivals M&S’s shops are currently open; however; government rules means it has been forced to close off its clothing floors. – Guardian

Starling says it has become the first digital challenger bank to be profitable, as its rivals continue to record large losses. The online bank, founded by Anne Boden in 2014 after she spent 30 years working for “boring big banks”, has made a loss every month since its launch but says, on an operating basis, it will post a £0.8m profit for October. – Telegraph

Minimum unit pricing for alcohol is reasonably effective at targeting heavy drinkers but comes at a cost of hindering competition and reducing tax revenues, research suggests. According to the independent Institute for Fiscal Studies, a minimum unit price, combined with a more coherent set of taxes on alcohol, would be just as well targeted at heavy drinkers and would limit the fall in revenue for the exchequer. – The Times

The Hinkley Point B nuclear power station will close by July 2022 at the latest, EDF has announced, triggering renewed calls to invest in replacement reactors. The Somerset plant started generating in 1976 and was due to close in 2016 but in 2012 EDF secured an extension until March 2023. However, the reactor developed cracks in its graphite core, which has limited its operation. – The Times

 

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