FTSE 100 Live: Stocks flat, Croda sinks, retail sales sag

Proactive Investors –

FTSE 100 subdued, down 7 points
Croda sinks as destocking hurts trading
Retail sales fall in May – BDO
Retail sales fall for first time in two years – BDO

The cost of living crisis is hurting the high street, figures from business advisory firm, BDO showed today.

Total like-for-like retail sales in the four weeks to May 28, combining in-store and online, fell by 1.5% overall compared with last May, turning negative for the first time in more than two years.

Online sales fell by 3.3%, one of the lowest results recorded outside of the pandemic, while in-store sales rose by just 1% across the month.

Total LFL sales were negative in three out of four weeks in May, with low and negative sales across all categories and channels.

BDO suggested the month’s three public holiday weekends may have contributed to reduced spending, as consumers potentially prioritized holiday or experiential spending over retail shopping.

Sticky inflation may have also played a part, the survey reported.

Footfall growth was positive throughout May, exceeding +3.0% growth in every week except for week two, which was possibly affected by festivities marking the Coronation of King Charles III, BDO reported.

Hammerson gains on double upgrade

Hammerson PLC (LON:HMSO) climbed 2.0% boosted by news of a double upgrade by investment bank, Barclays (LON:BARC).

The bank thinks current management “has largely done the right things.”

Post the inherited equity issuance in 2020, it has written down and continued to dispose of assets and looked to conserve cash, Barclays noted.

Barclays explained it was a “painful transition, not helped by Covid,” which supported its previous cautious stance.

But now is the time to turn more constructive, the broker said, upgrading its rating to ‘overweight’ from ‘underweight’ with a 30p price target target.

Shares rose to 26.5p per share and are up 9% year to date.

Windfall tax to be suspended if energy prices drop

Shares in a number of oil and gas producers climbed after news the government has introduced a price floor for the windfall tax on the industry, arguing that it is necessary to support investment and boost the country’s energy security.

The tax rate, which was raised to 75% last year at the peak of the energy crisis, will revert to the pre-crisis level of 40% if oil and gas prices fall below their long-term average under the so-called Energy Security Investment Mechanism.

In a statement, the Treasury said the windfall tax would remain until March 2028 but that the tax rate would fall if the average oil and gas prices fall to, or below, a set level for two consecutive three-month periods.

The floor has been set at $71.40 for crude oil and £0.54 a therm for gas.

Both would need to average below that level for two consecutive quarters to trigger the reduction in the tax rate.

Shares in Harbour Energy (LON:HBR) rose 3.6%, Ithaca Energy firmed 3.5% and Serica Energy gained 2.2%.