Stock prices in London opened higher on Friday after fresh data showed UK retail sales rose unexpectedly in December, offering some encouragement after a choppy end to the year.
The FTSE 100 was up 0.1% in early trade, while the FTSE 250 slipped 0.3%, underperforming its large-cap counterpart.
The Office for National Statistics reported a 0.4% rise in retail sales volumes in December, following a 0.1% decline in November. The figure beat forecasts for a 0.1% fall. Retail sales volumes were also 2.5% higher than a year earlier, well above expectations for a 1.0% increase.
The ONS said non-store retailers drove much of the monthly rise, with online jewellers reporting stronger demand for precious metals. October’s decline was revised slightly higher, while November’s reading was left unchanged. Despite the stronger December, sales volumes fell 0.3% over the final quarter of the year compared with the previous three months.
Energy stocks were among the early risers, with BP (LON:BP) up 1.3% and Shell (LON:SHEL) gaining 0.7% as oil prices recovered from Thursday’s dip. Defence names also pushed higher, with Rolls-Royce (LON:RR) up 0.6% and BAE Systems (LON:BAE) rising 1.0% against a backdrop of ongoing geopolitical tension.
Haleon added 0.8% after Barclays upgraded the stock to overweight and lifted its price target to 420p from 380p.
Babcock International fell 2.5% after announcing that Chief Executive David Lockwood will retire by year-end, to be replaced by nuclear division head Harry Holt. The company said third-quarter trading continued the strong performance seen at the half year and reiterated confidence in meeting full-year expectations, including its 8% margin target.
On the FTSE 250, SSP Group climbed 2.2% after reporting positive trading momentum into the new financial year and confirming unchanged guidance for 2026.
Watches of Switzerland jumped more than 5% after completing the acquisition of US luxury retailer Deutsch & Deutsch, adding four Rolex-anchored showrooms to its American network.
Rank Group dropped 5.8% after Deutsche Bank cut its rating to hold and slashed its price target, while Aura Energy surged 16% after securing $10 million in funding for its Haggan polymetallic project in Sweden.
Overnight, Wall Street closed higher, with the Dow Jones up 0.6%, the S&P 500 rising 0.6% and the Nasdaq gaining 0.9%.