FTSE 100 Live: Retail sales fall as living costs bite, Twitter shares slide

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U

K retail sales have fallen for the third month in a row as households cut back on discretionary purchases amid the cost of living surge.

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June’s British Retail Consortium-KPMG tracker revealed sales volumes are falling at a rate not seen since the depths of the pandemic.

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Meanwhile, Twitter shares closed 11% lower at $32.65 last night after Tesla boss Elon Musk withdrew his $54.20 a share takeover offer worth $44 billion. Musk cited concerns about the number of fake accounts on the platform, but Twitter vowed to close the deal “on the price and terms agreed yesterday”.

Live updates

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Power firms rally, British Land falls 4%

The surge for Centrica and SSE shares continued today after moves towards a windfall tax on electricity generators were put on hold.

The upheaval in Downing Street means no new policies or fiscal measures are expected, prompting the relief rally for the power firms after former chancellor Rishi Sunak had earlier threatened to target the industry’s “extraordinary profits”.

The possibility of a broader windfall tax that covered more than just the oil and gas industry sent shares spinning in May, particularly as many investors assumed that companies focused on the renewables sector would not be touched.

Centrica and SSE shares rallied 3% yesterday and both lifted another 1.5% today, up 1.2p to 84p and 27.5p to 1773.5p at the top of the FTSE 100 risers board.

Their gains came during another uncertain session for the London market, with investors opting to sit on the sidelines ahead of tomorrow’s US inflation reading.

The FTSE 100 index, which closed flat on Monday after initially falling 1%, dipped 15.01 points to 7181.58 as demand fears continue to depress many stocks in the mining sector.

British Land and Land Securities topped the fallers board after another City firm took a more cautious stance on the landlords.

RBC downgraded its target price on British Land to 375p and LandSec to 675p, leaving the pair down 4% at 443.9p and 650.4p respectively.

The FTSE 250 index fell 113.70 points to 18,723.28, with shopping center firm Hammerson 5% lower.

On a brighter note, contracts-for-difference trading business Plus500 surged 32p to 1594p as it forecast stronger-than-expected half-year revenues and profits. Broker Peel Hunt sees further upside after reiterating a target price of 1,920p.

Shares in Wagamama and Frankie & Benny’s chain Restaurant Group were little changed at 44.3p today, despite its £7 million deal to buy the Mexican food business Barburrito. The 16-strong estate includes a site in Paddington.

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FTSE 100 lower, Plus500 up 5%

The FTSE 100 index is 22 points lower at 7174 amid another difficult session for mining and commodity-focused stocks.

Anglo American and Antofagasta fell 2% in reaction to a fresh decline in the price of copper to a level last seen over 18 months ago.

Selling pressure also impacted retail and office landlords, with British Land and Land Securities down 2% in the FTSE 100 and Hammerson off 5% in the FTSE 250 index.

The top flight risers board featured further gains for power firms Centrica and SSE after the government shelved plans for a windfall tax on power generators.

British Gas owner Centrica rose half a penny to 83.3p and SSE lifted 13.5p to 1759.5p.

The FTSE 250 index stood 55 points lower at 18,781, with trading firm Plus500 the biggest riser after it forecast full-year results ahead of market expectations. Shares in the contracts-for-difference provider jumped 5% or 78p to 1640p.

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Online retailers squeezed as shoppers cut back

Today’s figures from the British Retail Consortium and KPMG show that online shopping sales were down 9% last month, with purchases related to the home suffering the biggest falls.

The Jubilee weekend provided some relief for food and drink retailers as sales grew by nearly 1.5% year-on-year, despite the rising cost across most items.

Retail sales overall fell for the third month in a row, although the 1% decline was against a strong June 2021 and a backdrop of unprecedented price rises.

BRC chief executive Helen Dickinson said: “Retailers are caught between significant rising costs in their supply chains and protecting their customers from price rises.

“The government needs to get creative and find ways to help relieve some of this cost pressure – the upcoming consultation on transitional relief is a golden opportunity to ensure that retailers aren’t overpaying on their business rates bills.

“Government action on transitional relief would make a meaningful difference to retailers’ costs and ease pressure on prices for customers.”

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Markets weaken ahead of US earnings season

Global stock markets remain under pressure as attention turns to the start of the US earnings season.

PepsiCo kicks off proceedings today with the release of quarterly figures ahead of Wall Street’s opening bell, while the banking giants JP Morgan Chase, Morgan Stanley, Citigroup and Wells Fargo are due to follow on Thursday and Friday.

In the meantime, US futures markets are pointing lower after a weak session on Monday saw the S&P 500 fall by more than 1% and the Nasdaq lose over 2%.

Fears over a return of Covid lockdowns in China meant the FTSE 100 index dived 1% in yesterday’s early dealings, before a recovery to finish broadly unchanged. CMC Markets today expects London’s top flight to open 40 points lower at 7156.

Meanwhile, the US dollar continues to strengthen after the greenback recently set a 20-year high against a basket of currencies and neared parity versus the euro. Sterling today stood at $1.185, having fallen by 0.35% overnight.

As well as its safe haven appeal at a time of inflation and economic uncertainty, the dollar has been boosted by expectations of further steep rises in US interest rates. Further movement is expected on Wednesday, when US inflation figures for June are set to show a fresh 40-year high of 8.8%.

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Credit: www.standard.co.uk /

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