Pranav Kashyap
(Reuters) – Indexes in London fell on Friday after hot UK retail sales data prompted investors to bet any rate cut would be delayed, although the benchmark index was poised to record its first weekly gain in six weeks.
The FTSE 100 index fell 0.3% in morning trade, while the mid-cap index held its ground and was on course for its first weekly gain in four weeks.
UK retail sales rose 2.9% in May, recovering sharply from a revised 1.8% decline in April. A survey of economists predicted sales would rise 1.5%.
The personal goods sector advanced 1%, making it the leader among sectors.
Traders, however, remained on the sidelines awaiting Purchasing Managers’ Index (PMI) data due later in the day.
“It’s a summer Friday and everyone is busy watching football, so you don’t want to gain too much from the morning price action,” said Russ Mold, investment director at AJ Bell.
Investor sentiment in the UK is gradually improving after comments from the Bank of England on Thursday led to a rate cut in August. Markets estimate the probability of a rate cut in August to be 50/50.
The weakening pound was also a major tailwind for growth.
Among individual stocks, United Utilities (OTC:) rose 1.7% after JPMorgan upgraded the stock from Neutral to Overweight.
Britvic shares rose 11.1% after the soft drinks maker rejected a revised, unsolicited, possible cash offer from Carlsberg (CSE:) Group.
B&M shares fell 1.6% after Morgan Stanley downgraded the company from “equal weight” to “underperform”.
Additionally, investors will also be keeping an eye on the US PMI readings, which will decline later in the day.