The FTSE 100 rose on Friday, helped higher by more good news from the UK’s retail sector and confirmation that the UK managed to carve out gains in the final quarter of 2024.
The UK’s retail industry is having a good week. Next’s results yesterday showed that retailers can grow sales and increase profits despite the gloom around the UK economy.
The feel-good factor for retail shares was compounded by UK retail sales growing 1% in the month to February compared to estimates of a 0.3% decline.
Kingfisher, Sainsbury’s and Marks & Spencer were among the FTSE 100’s top risers at the time of writing on hopes the sector may have an easier ride than previously thought.
“Retail sales volumes came in better than expected in February. The trends from last month effectively reversed with food sales falling after a very strong January and non-food categories rebounding following last month’s weakness,” said Charlie Huggins of Wealth Club.
“These figures, along with yesterday’s better-than-expected results from retail bellwether Next, indicate that consumers are still feeling confident enough to spend despite the gloomy economic headlines.
The positivity created by stronger-than-expected retail sales and GDP helped the FTSE 100 carve out a fragile 0.1% gain. The index has dipped into negative territory a number of times on Friday, and it wouldn’t be a surprise to see it turn negative again before the close.
“A jump in retail sales in February and confirmation the UK economy managed to grow in the final quarter of 2024 were treated as small wins by the market. While not earth-shattering data, investors are taking any nuggets of good news they can get in the current fragile environment,” said Russ Mould, investment director at AJ Bell.
“Both the FTSE 100 and FTSE 250 indices advanced on a day where other major indices in Europe went into reverse. Sainsbury’s, Kingfisher and Marks & Spencer all enjoyed a bounce on the retail sales figures, while utilities were also in demand.”
Interest in United Utilities, National Grid, and SSE reflects an element of caution with considerable uncertainty on the horizon in the form of Donald Trump’s ‘liberation day’ next week, when a raft of tariffs are set to come into force.
Gold hitting an all-time high again on Friday underscored the flight to safety.
Cyclical sectors such as miners and banks were the heaviest hit on Friday with losses in names such as Anglo American, Barclays, and BP offsetting gains for retailers and utilities.