- FTSE 100 continues gains after closing at six-month highs yesterday
- Retail sales beat expectations and consumer confidence climbs
- LGEN scraps China business licence plan and cuts headcount
- Oil price slides amid ceasefire hopes in GazaOil prices,
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown:
“Upbeat statements in the UK and US helped heave the FTSE 100 up to the next level in Thursday’s trading, with the index closing at six-month highs. Positive momentum has continued with further gains squeezed out at the open. The overall mood remains better than at the start of the week, as Andrew Bailey suggested markets are right to expect more than one interest rate cut this year. His comments included a positive update on the latest inflationary markers, which showed things are remaining less sticky than feared.
The atmosphere in the UK is also being helped along by better-than-expected retail sales in February. The volume of items bought was flat month-on-month, which was better than economist expectations of a 0.3% contraction. It’s good news for the fashion retailers, where clothing sales have bounced back, following what looks like a positive reception to new season collections. On the flipside, food sales were less exciting and that highlights the ongoing pressure faced by the grocers, who are balancing passing on lower prices and convincing customers to buy more items – a hard task when shoppers have only just got used to seeing the checkout-totals reach more sensible levels. Consumer confidence more broadly has stalled, remaining at minus 21, according to data from GfK. Within that though, people seem to have a brighter outlook on their personal finance which could help add a spring in the step of discretionary shopping and services.
Insurer and asset manager stalwart Legal & General has scrapped plans to apply for a Chinese licence, which would allow it to sell offshore products to Chinese investors. The local team has also been cut in a clear sign that the group’s original growth plans for the region have come off the boil amid growing uncertainty. This is by no means something that moves the dial too wildly for the group, but it does add another asset-management voice to the bearish side of the Chinese economy. That said, LGEN isn’t walking away from the region and will be maintaining a presence. It seems it’s not that the group thinks the opportunity is over, but rather the timing isn’t quite right.
The possibility of a ceasefire in Gaza has seen the price of Brent crude slide for three straight sessions, with the cost of a barrel now hovering around $85.3. Comments from the US Secretary of State have alluded to the potential for peace, but of course, this is a very fast-moving situation and a deviation from this trajectory may well inject further price spikes.”
