FTSE Rallies After Solid Retail Sales
Fiona Cincotta November 20, 2020 8:10 PM
European bourses are heading out of the blocks on the front foot despite a mixed session on Wall Street overnight. Better than forecast UK retail sales have given the FTSE a solid leg higher.
European bourses are heading out of the blocks on the front foot despite a mixed session on Wall Street overnight. The markets remain very much stuck balancing vaccine optimism against near term economic fallout that covid and the lockdowns imposed to stem the spread of the virus are causing. Although better than forecast UK retail sales have given the FTSE a solid leg higher.
The FTSE is one of the better performers in Europe following significantly stronger than expected retail sales data. Retail sales +1.2% MoM in October well above the 0% increase expected. Retail has seen a remarkable recovery from the March / April collapse in sales. Even as parts of the UK economy saw lockdown restrictions tighten in October, consumption remained strong, an encouraging sign for retailers. Retail sales are now a solid 7.8% higher than a year earlier, whilst the UK economy still remains 8% below its pre-virus size.
The upbeat data has boosted retailers with the likes of JD Sport, Next and Burberry putting in solid performances.
However, with lockdown 2.0 upon us the question is whether retail sales can produce an equally impressive rebound after this lockdown? The fear is that this latest lockdown will amplify the growing gulf between online stores and bricks and mortar.
Sage dives 10% on margin concerns
Sage is a notable decliner despite lifting its dividend after reporting an 8.5% rise in recurring revenue to £1.6 billion, thanks to a boom in subscriptions growth of 20.5%. However, 2021 recurring revenue forecast is lower at 2% -5% and concerns over declining profit margins, a trend which is set to continue unnerved investors. The stock dived 10% in early trade.
From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.