A man takes shelter under an umbrella as he walks past the Stock Exchange in London, Britain, August 24, 2015. REUTERS/Suzanne Plunkett/File Photo Purchase license rights
Aug 18 (Reuters) – UK stocks fell on Friday and were pointing to weekly losses, led by falls in retail shares after data showed domestic retail sales fell more than expected in July.
FTSE 100 heavy on exporters (.FTSE) it was down 0.7% at 0819 GMT, hovering around 1-month lows and set for a third straight weekly drop. The pound fell 0.15% to $1.2728 just after the data.
The FTSE 250 mid-cap (.FTMC) it was down 0.8%.
British retail sales volumes last month were 1.2% lower than in June as heavy rains put off buyers, while economists polled by Reuters had forecast a 0.5% decline.
On an annual basis, retail sales were 3.2% lower than a year earlier, compared with economists’ forecasts for a 2.1% decline.
“(Retail sales) It’s a bit of a contrast (vs. inflation, wage growth data) and it can confuse a lot of investors as to what exactly is going on,” said Daniela Hathorn, a senior market analyst at Capital.com.
The retail sales data comes days after inflation and wage growth data showed inflationary pressures persisted, opening the door for further rate hikes by the Bank of England.
“We’re 100% going to have a rate increase (next month) and it’s just a case of whether they stay at 25 basis points (bps) or go up to 50 bps,” Hathorn added.
The recent batch of economic data fueled a relentless sell-off in UK stocks this week, with the blue chip index falling more than 3.5% this week.
Retailers (.FTNMX404010) it fell 1.5%, leading the sector falls after the data. personal property shares (.FTNMX402040) it also fell 1.7%.
Among other main sectoral obstacles, industrial metal miners (.FTNMX551020) it fell 1.7%, on concerns over weak demand prospects from top metals consumer China.
Concerns over China’s debt-laden real estate crisis and weakening economy deepened after embattled developer China Evergrande Group (3333.HK) archived for bankruptcy protection in a US court.
RS Group Shares (RS1R.L) It fell more than 4%, hitting the bottom of the benchmark index, after brokerage UBS downgraded the stock.
Reporting by Siddarth S in Bangalore; Edited by Subhranshu Sahu and Janane Venkatraman
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