London open: Stocks edge up as miners rally; borrowing, retail sales in focus

(Sharecast News) - London stocks edged higher in early trade on Friday, underpinned by strength in the mining sector, as investors mulled the latest UK retail sales and borrowing figures.

At 0835 BST, the FTSE 100 was up 0.2% at 10,767.49.

Richard Hunter, head of markets at Interactive Investor, said: "The mining sector was again the saviour which prevented a wider decline, with rising commodity prices underpinning names such as Antofagasta and Fresnillo, given their particular exposure to copper and gold respectively."

Figures released earlier by the Office for National Statistics showed that retail sales fell as expected in July, having been boosted a month earlier by hot weather and promotions. Retail sales declined by 0.5% following a revised 0.7% rise in June. The ONS had previously estimated that sales rose 1% in June.

The ONS said clothing retailers reported earlier promotions bringing sales forward from July into June, as well as hot weather reducing footfall in July.

On the year, retail sales grew 1.6% in July following 3.8% growth in June.

ONS chief economist Grant Fitzner said: "Retail sales increased in the latest three months, with all main sectors, apart from motor fuel, seeing growth.

"Some retailers told us that hot weather and promotions helped sales of outdoor products and items such as fans, with clothing and online sports merchandise also doing well."

Jacqueline Windsor, head of Retail at PwC UK, said: "While successive heatwaves and World Cup celebrations earlier in the month helped grocery sales - of everything from beer to picky bits - the earlier timing of discounting and promotions meant that some large online and fashion retailers in particular pulled forward sales into June that would previously have been in July.

"Higher inflation, notably the higher energy price cap and higher petrol prices later in the month, also meant less money in shoppers' pockets for discretionary spending outside of grocery and fuel."

Separate data from the ONS showed that government borrowing rose in July as spending growth outpaced receipts despite strong self-assessed income tax revenue.

Government borrowing was £1.8bn in July, up £0.7bn on the same month a year earlier and £2.3bn above the Office for Budget Responsibility's forecast.

Borrowing for the financial year to July was £56.7bn, down £6bn on the same period a year earlier, but £2.3bn above the OBR forecast.

ONS chief economist Grant Fitzner said: "Public sector borrowing was lower in the financial year to date than in the same period last year, both in total and as a share of the economy. However, it is above the OBR spring forecast.

"Conversely, borrowing was slightly higher this month than in July last year, with spending growth outpacing higher receipts, including from self-assessed taxes which often feed in more strongly in July."

Elsewhere, a survey released earlier showed UK consumer confidence hit its highest level in two years in August.

In equity markets, miners were the top performers on the FTSE 100 as metals prices rose, with Antofagasta, Fresnillo, Anglo American and Rio Tinto all up. Hochschild and Endeavour Mining also shone.

Precision engineering group Hunting tumbled as it reported lower firsthalf revenues and earnings and trimmed its fullyear underlying earnings guidance.

Market Movers

FTSE 100 (UKX) 10,767.49 0.18%

FTSE 250 (MCX) 24,566.65 0.24%

techMARK (TASX) 6,110.71 -0.46%

FTSE 100 - Risers

Antofagasta (ANTO) 3,866.00p 4.10%

Fresnillo (FRES) 3,285.00p 3.72%

Anglo American (AAL) 4,073.00p 2.42%

JD Sports Fashion (JD.) 82.22p 2.40%

Glencore (GLEN) 596.70p 1.93%

Standard Chartered (STAN) 2,169.00p 1.25%

Lion Finance Group (BGEO) 12,890.00p 1.25%

HSBC Holdings (HSBA) 1,519.60p 1.22%

Rio Tinto (RIO) 7,588.00p 1.05%

Prudential (PRU) 1,023.00p 1.04%

FTSE 100 - Fallers

Smith & Nephew (SN.) 1,051.50p -1.91%

Experian (EXPN) 2,914.00p -1.62%

GSK (GSK) 1,888.50p -1.38%

Relx plc (REL) 2,555.00p -1.28%

Babcock International Group (BAB) 1,107.50p -0.89%

BAE Systems (BA.) 2,121.00p -0.84%

InterContinental Hotels Group (IHG) 158.50p -0.69%

AstraZeneca (AZN) 11,990.00p -0.68%

Bunzl (BNZL) 2,736.00p -0.65%

Computacenter (CCC) 5,015.00p -0.59%

FTSE 250 - Risers

Hochschild Mining (HOC) 624.00p 4.10%

Domino's Pizza Group (DOM) 201.20p 3.59%

Pan African Resources (PAF) 132.80p 3.34%

AEP Plantations (AEP) 192.80p 3.25%

Savills (SVS) 1,050.00p 3.04%

Currys (CURY) 149.10p 2.96%

Endeavour Mining (EDV) 4,621.00p 2.74%

Auction Technology Group (ATG) 450.60p 2.41%

Pacific Horizon Inv Trust (PHI) 1,116.00p 2.39%

Wickes Group (WIX) 198.00p 2.06%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 33.82p -2.20%

Frasers Group (FRAS) 793.50p -1.67%

Barr (A.G.) (BAG) 595.00p -1.33%

Diversified Energy Company (DI) (DEC) 1,078.00p -1.29%

Worldwide Healthcare Trust (WWH) 391.50p -1.26%

Rathbones Group (RAT) 1,696.00p -1.18%

Chemring Group (CHG) 584.50p -1.02%

Workspace Group (WKP) 352.60p -0.96%

CVS Group (CVSG) 1,293.00p -0.92%

International Workplace Group (IWG) 173.70p -0.86%