By Barbara Kollmeyer
More strong economic data came through for the U.K. on Friday, and included in that was a sharp rise in retail sales that boosted the pound.
The pound /zigman2/quotes/210561263/realtime/sampled GBPUSD +0.1944% rose 0.3% against the dollar to $1.4228, a move that kept a lid on gains for the FTSE 100, as many big blue-chips earn revenue overseas. The index /zigman2/quotes/210598409/delayed UK:UKX +0.34% was flat at 7,0165 after rallying 1% on Thursday.
A string of upbeat data showed retail sales surging 9.2% in April, as coronavirus restrictions eased, said the Office for National Statistics. That beat estimates for a rise of 4.5% though, against a year-ago level of 5.4%. Retail sales rose 42.4% on an annual basis, and 37.7% excluding petrol prices for cars.
“With 2020 having seen a massive buildup in savings, we are finally seeing signs that consumers are heading out to draw down those savings to the benefit of U.K. PLC,” said Joshua Mahony, senior market analyst at IG, in a note to clients.
Added to that, U.K. consumer sentiment rose further in May , according to data from market-research firm GfK. Its consumer-confidence barometer registered minus 9 in May, a six-point gain from April, and matched a year-ago reading, before the COVID-19 pandemic plunged the U.K. into lockdowns.
Europe and the U.K. also got flash purchasing managers index readings from IHS Markit. The U.K. manufacturing figure of 66.1 was the highest since January 1992. “The month-on-month nature of this survey means that we are likely to see continued strength as restrictions are withdrawn,” said Mahony.
But retailers weren’t boosting the FTSE 100, which was kept afloat by gains for mining stocks, with shares of Glencore /zigman2/quotes/201400686/delayed UK:GLEN +1.01% , BHP /zigman2/quotes/203323256/delayed UK:BHP +0.68% /zigman2/quotes/208108397/composite BHP +1.87% and Rio Tinto /zigman2/quotes/208934945/delayed UK:RIO +1.05% /zigman2/quotes/202627887/composite RIO +2.19% up just over 0.5% each.
Shares of Travis Perkins /zigman2/quotes/200858511/delayed UK:TPK -0.84% rose over 1%, after the U.K. building-materials retailer said it has sold its plumbing and heating distribution unit to an affiliate of investment firm HIG Capital LLC. for £325 million ($461.1 million) in cash. It will return cash to shareholders.
Shares of Trainline /zigman2/quotes/212885666/delayed UK:TRN +3.45% continued to fall, dropping 2.6% a day after the U.K. government outlined a railroad infrastructure plan that would include operating a rival ticketing app.