London pre-open: Stocks to edge higher as investors digest BRC survey
London stocks were set for a slightly firmer open on Tuesday following losses in the previous session.
The FTSE 100 was expected to open 10 points higher at 7,706, after hitting a fresh intraday high of 7,733.39 on Monday.
CMC Markets Michael Hewson said: “The FTSE100 slipped back to close lower despite making a new record high yesterday, hindered by a slide in the technology sector and a slightly firmer pound. Recent economic data continues to paint a picture of relative optimism despite the incessant background hum of negativity from certain sections of the body politics.”
There are no major UK data releases due, but earlier, figures from the British Retail Consortium showed retail sales remained lacklustre in the industry's vital festive period, with non-food sales growth the lowest in five years.
Sales increased 0.6% in December, the same as the month before, as price inflation drove a 2.6% rise in food sales that was all but wiped out by a 2.2% fall in non-food retail sales.
High street sales in the three months to December of non-food items declined 4.4% on a like-for-like basis, which is the lowest rate since 2012, when the BRC's records began.
Helen Dickinson, the BRC’s chief executive, said: “With inflation outpacing income growth, shoppers continued to see more of their spending power absorbed by essential items, including food, leaving less left over for buying Christmas gifts.
“That made this year’s festive period all the more nail-biting for non-food retailers, many of whom offered deep discounts in the last weeks before Christmas in the hope of something to celebrate at the end of a year, which has seen, on average, zero growth in non-food sales.”
In corporate news, cigarette maker British American Tobacco said 2018 earnings would get a 6% boost from the recent US tax cuts “supporting our commitment to high single digit earnings growth and increased investment in the roll out of next generation products”.
Supermarket group Morrisons reported on a much stronger than expected Christmas period, boosted by the roll-out of its new wholesale operations.
Like-for-like sales excluding fuel rose 2.8% in the ten weeks to 7 January, with the retail business growing 2.1% and wholesale adding 0.7%.
Housebuilder Persimmon said it expected full year pre-tax profits would be “modestly ahead” of market consensus.
In a trading update, the company said revenues for 2017 of £3.42bn were up 9% year on year with legal completion volumes up 6% to 16,043. The Group's average selling price increased by 3% to around £213,300.