Proactive Investors - The FTSE 100 has opened 22 points lower, down 0.3% at 7,480, falling to a new monthly low.
Ocado Group PLC (LON:OCDO), after its rise yesterday, is leading the fallers, ahead of a group of housebuilders, including Berkeley Group Holdings PLC (LON:BKGH) and Persimmon PLC (LON:PSN) as worries about the effect of rising interest rates continue.
GSK PLC (LON:GSK), after its update (see below) on Zantac, is up over 4%.
Richard Hunter, the head of markets at Interactive Investor, was sanguine, seeing markets as "flat to positive, underpinned by a tentative return to high growth momentum stocks".
"The main theme of the week has seen a guarded investor response to the latest central bank actions and outlook comments," he said, noting the Bank of England's rate hike and US Federal Reserve chair Jerome Powell confounding the interest rate speculators who believe that the hiking cycle has definitely ended.
"The position remains finely balanced, with some chinks beginning to appear in what has been a strong labour market, and with some warning signals emanating from the likes of the manufacturing and banking sectors. At the same time, the consumer remains active even though there is an increasing belief that pandemic savings are starting to evaporate, all of which is leading to a consensus for another rate rise in July following the pause this month."
He said the FTSE's moves have "mirrored investor concerns over the general state of inflationary and interest rate positions, drifting lower as investors chose to sit on the sidelines as events continue to unfold", with its gain reduced to 0.4% for the year to date.
UK retail sales rise
UK retail sales volumes, including petrol, rose by 0.3% month-to-month in May, according to new figures from the Office for National Statistics.
This was higher than the consensus forecast, -0.2%.
Year-over-year retail sales were down but less than the previous month, moving to -2.1% in May from -3.4% in April, which was again better than the average forecast of -2.5%.
Sales rising on the month as saw weaker food sales around the bank holiday were offset by stronger online spending, which the ONS put down to the warmer weather.
ONS senior statistician Heather Bovill said online shops did particularly well selling outdoor goods and summer clothes, while May also saw a return to growth for fuel sales after a dip in April.
“Garden centres and DIY stores also saw growth, as the good weather encouraged people to start home and garden improvements," she said.
“These were offset by food sales, which fell back as prices in supermarkets continued to rise, exacerbated by many people ordering takeaways and drinking out more during the extra bank holidays, while jewellery and art also fell back after a strong April.”
Economists at ING said: "Weather seems to have been a key driver of recent month-on-month sales volumes, which otherwise have essentially flatlined in real terms for a number of months now."
Revolution responds to Boohoo criticism
It's pretty quiet in terms of big company news, but in the intriguing battle between two AIM companies, Revolution Beauty (LON:REVB) has fired back at criticisms from major shareholder Boohoo with a show of strength.
First-quarter sales for the cosmetics brand were up 60% on the same time last year and underlying earnings (EBITDA) at constant currency rates flipped from a loss las year to a positive £3.5mln this time, it said in a statement.
Revolution chief executive Bob Holt said: "The excellent trading performance in the first quarter of the year is testament to the quality of our offer and the strength of our leadership team, and shows that we are delivering on our global retailer strategy.”
"This has been achieved at the same time as fixing the historical issues overseen by previous management and putting in place improved cost controls and processes across the business."
Shares in Revolution Beauty have been suspended since September after its auditor refused to sign off on its accounts, which has led to an independent investigation being carried out by a law firm and forensic accountants over various issues, including questionable historical sales and personal loans made by its former chief executive.
The company said it is "on the cusp" of having trading in its shares on AIM restored.
UK consumer confidence improves
GfK’s composite index of consumers’ confidence improved for the fourth month in a row, but remains firmly negative.
It rose to -24 in June, from -27 in May, above the consensus, -26.
Joe Staton, client strategy director, said: "The cost-of-living crisis has been part of our daily financial reality for a long time, with double-digit inflation and record-high food prices. But despite those pressures, May sees an encouraging three-point uptick in consumer confidence."
He noted that the index has now increased from January’s score of -45 and noted that there had also been an improvement in how people view their personal finances in the next 12 months, despite worries about rising interest rates and the chance it will results in a recession.
The headline index score of -27 means we’re "still deep in negative territory and a long way from any ‘sunny uplands’", Staton said.
"However, the overall trajectory this year is positive and might reflect a stronger underlying financial picture across the UK than many would think. But everybody must hold on tight as it could still be a rocky ride out of these tough times."
GSK settles Zantac litigation
Among the early company news, GSK PLC has told shareholders that it has reached a "confidential settlement" with the individual who brought a class action on behalf of users of heartburn drug Zantac.
It said the settlement had been made with James Goetz, and the case he filed in California state court, meaning the trial that was set to begin next month will be dismissed.
"The settlement reflects the company's desire to avoid distraction related to protracted litigation in this case. GSK does not admit any liability in this settlement and will continue to vigorously defend itself based on the facts and the science in all other Zantac cases," the FTSE 100-listed drug giant said in the statement.