Europe open: Shares up as UK retail sales lift sentiment

16th Feb 2024 08:39

(Sharecast News) - European stocks started higher Friday as investors digested better-than-expected UK retail sales figures and corporate earnings from NatWest Bank.

The Stoxx 600 index was up 0.49% at 490.95, with all major bourses higher. The UK was in focus politically and economically as the embattled ruling Conservative Party suffered two big by-election defeats to the main opposition Labour Party.

It surrendered the seat of Wellingborough after sitting MP Peter Bone was forced out over allegations of misconduct, while Kingswood, vacated by Chris Skidmore, who reigned in protest at the government's decision to issue more oil and gas exploration licences.

The results suggest that the Tories are heading for a heavy defeat at a General Election which must be called by the end of the year. They are currently trailing Labour by 21 points in the polls.

In Britain, retail sales rose, providing some positive news for a beleaguered economy that went into technical recession on Thursday.

Sales rose 3.4% month on month, according to the Office for National Statistics, far higher than estimates of 1.5% growth and a rebound from a record fall in December.

"These green shoots are encouraging, but we're not totally out of the woods yet. Clothing is still a lag, suggesting consumers are still wary about spending on non-essentials," said Hargreaves Lansdown analyst Sophie Lund-Yates.

"The increase in supermarkets is welcome news though, looser buying behaviour in this area indicates that the very worst of penny pinching Is probably over."

In equity news, NatWest gained after the lender beat expectations with a 20% increase in full-year pre-tax operating profit.

Reporting by Frank Prenesti for Sharecast.com