UK stocks stagnate as miners block strong retail sales
London’s FTSE 100 was flat on Friday posting a weekly loss as weakness in mining stocks thwarted a larger-than-expected jump in retail sales and trading activity.
The blue chip index was flat, with miners Anglo American Plc, Glencore Plc and Rio Tinto falling between 0.3% and 0.5%.
The major stimulants in the index were oil majors BP and Royal Dutch Shell.
Retail sales jumped 9.2% in April, when non-essential stores reopened after months of closure due to Covid-19 restrictions, official data shows, the Composite Purchasing Managers Index ( UK PMI) to its highest level on record.
“The rise in UK PMIs is the latest indicator to suggest that the economy is already in better shape than after the first wave last summer,” said James Smith, developed markets economist at ING.
“We forecast about 5 percent growth in the second quarter and believe the economy will just be timid or maybe even back to pre-virus levels by the end of the year.” The FTSE 250 mid-cap index focused on the domestic market was also stable.
The FTSE 100 has gained 8.2% year-to-date on optimism about the economic recovery. But the index recently traded in a narrow range as rising inflation fueled fears that central banks would cut back support sooner than expected.
A Reuters poll found the UK economy will grow 5.9% this year, far more than the 5.0% forecast last month, as a rapidly evolving coronavirus vaccine program allows businesses to reopen and build confidence.
Biffa rose 6.0 percent to the top of the mid-cap index after its proposal to buy the collection business and some recycling assets from Viridor Waste Management Ltd for £ 126m (£ 178.87m dollars).
Card Factory slipped 15.1% after reporting a marginal drop in like-for-like store sales, compared to 2019, after the UK began reopening stores and easing restrictions in April.