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FTSE 100 rises and European stocks mixed as UK consumer confidence hits two-year high

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ftse LONDON, UNITED KINGDOM - JAN 19, 2024 - UK Economy: Retail sales fell by 3.2% in December. Oxford Street shoppers. (Photo credit should read Matthew Chattle/Future Publishing via Getty Images)

The FTSE 100 rose after a new data release showed consumer confidence on the up. (Future Publishing via Getty Images)

The FTSE and European stocks were a mixed bag on Friday, with London’s premier index rising as UK consumer confidence hit a two-year high in January.

The monitor, published by research company GfK, showed people’s views of their finances and broader economic prospects ticked up three points compared to last month, to the highest point since January 2022.

The data coincides with a confidence measure from Europe earlier in the week, which saw a larger-than-expected drop from the bloc.

The FTSE 100 (^FTSE) was 0.7% higher in early trade, while Germany’s DAX (^GDAXI) dipped 0.3% and the CAC (^FCHI) in Paris headed 1.3% into the green.

The pan-European STOXX 600 (^STOXX) was up 0.3% in early trade.

The mixed day in Europe comes after the ECB left interest rates unchanged at 4% on Thursday for a third consecutive meeting.

The move was widely expected by economists as it battles to bring inflation below its 2% target, reiterating its reluctance to start making cuts despite the mounting pressure to do so.

Read more: London rents reach record high of £2,631

The ECB’s deposit rate, which is paid on commercial bank deposits, was last raised in September to 4% — the highest since the euro was launched in 1999.

The rate on its main refinancing operations, which provide the bulk of liquidity to the banking system, remains at 4.5%, while the marginal lending facility, which offers overnight credit to banks, is at 4.75%.

It comes as inflation had been falling consistently in the Eurozone but saw a surprise uptick to 2.9% in December, adding fuel to its relatively hawkish position.

Follow along for live updates throughout the day:

Live6 updates

  • Recession fears plague Germany

    While consumer confidence is up in the UK, it has dipped in Germany compounding fears of a recession. Here’s what GfK said:

    The year 2024 is off to a very disappointing start for consumer sentiment in Germany: both economic and income expectations as well as the propensity to buy are showing noticeable losses. The consumer climate is declining significantly again after the increase in the previous month. It falls to -29.7 points in the forecast for February 2024 – a decrease of 4.3 points compared to the previous month (revised -25.4 points). This is shown by the results of the GfK consumer climate powered by NIM for January 2024. Since October 2023, it has been published jointly by GfK and the Nuremberg Institute for Market Decisions (NIM), founder of GfK.

  • FTSE risers and fallers

    Among the top risers in the FTSE 100 today are:

    Diageo (DGE.L), up 3.8%

    Croda International (CRDA.L), up 3.7%

    Rentokill (RTO.L), up 2.8%

    And the fallers:

    Sainsbury (SBRY.L), 1.5% down

    M&S (MKS.L), 1.1% down

    Tesco (TSCO.L), 0.8% down

  • Trending tickers: WH Smith

    High street darling WH Smith’s (SMWH.L) stock is down 2.6% as of 9.30am despite positive numbers in its latest update.

    The company said it is on track to open 110 shops this financial year as the retailer was boosted by strong UK trade.

    Group revenues increased by 8% over the 20 weeks to 20 January, compared with the same period last year.

    Travel sales grew by 15% over the period, with its UK travel stores benefiting from improving passenger numbers at airports.

    Our other trending tickers today include: Intel, Visa and Paypal.

  • Overnight in Asia

    While US stocks were on the up, Asian stocks were mixed again. The Nikkei (^N225) slipped 0.3% by the close while the Hang Seng (^HSI) fell 1.8% and the SSE Composite (000001.SS) rose 0.1%.

    Japanese stocks pulled back after the Nikkei saw all-time highs this week, which coincided with the Bank of Japan leaving rates on hold. Ever since, hawkish comments by the central bank chief have pulled markets back down to earth.

    The Hang Seng was dragged down by technology names, which knocked the Hang Seng Tech Index down by nearly 4%. Still, it remained on track for a weekly gain of 4%, its best performance in about a month.

  • Overnight in the US

    Globally, it was a mixed night of trade as markets closed higher in the US, and on shakier footing in Asia.

    US stocks rose on Thursday despite downbeat earnings from Tesla (TSLA) and following a hotter-than-expected US economic growth reading.

    Dow Jones Industrial Average (^DJI) rose 0.6% while the S&P 500 (^GSPC) rose 0.5% following the benchmark’s fourth straight record close logged on Wednesday. Stocks in the tech-heavy Nasdaq Composite (^IXIC) rose about 0.2%. The S&P 500 set another closing record high finishing at 4,894.16.

    An advance estimate of fourth quarter US gross domestic product (GDP) released on Thursday morning showed the economy grew at an annualized pace of 3.3% during the period, much faster than the annualized pace of 2% expected by economists.

    Tesla (TSLA) warned of “notably” slower EV production growth in quarterly results that missed on profit, with CEO Elon Musk pointing to the risk that Chinese carmakers will “demolish” rivals in the absence of trade curbs. Shares of the EV maker dropped 12%, further underperforming the other “Magnificent Seven” tech-centered stocks that have driven the S&P 500’s rally.

  • Good morning!

    Good morning from London. Lucy Harley-McKeown reporting here, following what’s moving markets today (but still thinking about what’s going to happen in The Traitors finale). Let us begin.

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