Key developments

Markets pull back following a hit in high global stocks 
- FTSE 100 retreats from a record high close since May 14th
- Imperial Tobacco dominates consumer staples higher

The U.K. stocks receded from a four-week high last week as investors acquired profits following the latest bullishness which sent several of global equity to staggering new record highs. The FTSE 100 was trading 0.3 % lower at 6,852 in earlier trades with the index rising 6,875 last week which was its highest finish since the second quarter when in set a new 14-year closing high of 6,878.49.

Germany’s DAX closed above the 10,000 level for the very first time while the Dow Jones Industrial Average and S&P continued to set record highs in the U.S. respectively. The global stocks, as measured by the FTSE 100 All-World Index rose 0.2 % to a new record high and market volatility remained stable at multi-year lows.

These gains were registered as against a backdrop of central banks that were determined to maintain interest rates relatively low and liquidity liberal as well. Provided that the prevailing sentiment, it remains hard to conceptualise what the catalyst would be to prompt any kind of exchange in the downward correction.

Economic data gathered from China is closely being monitored after a larger-than-expected increase in consumer prices to 2.5 % year-on-year was particularly below the government’s target of 3.5 %. Experts believe the data should alleviate concerns of a disinflationary move, whilst also staying low enough to lead the way for a future stimulus measure.

In Britain, the focus largely remains to be on data releases for the U.K. industrial and manufacturing production which were both expected to gain momentum in the coming months.

Increase in consumer staples

Consumer staples were in high demand as investors were seeking out a defensive strategic approach despite a reduction in risk appetite. Household goods companies were making hefty gains along with tobacco derived commodities. 

Retailers were mainly more focused after a downgrade in sportswear commodities and were prompted along with cash-and-carry groups. The bank, however raised opportunities to help stocks recover after getting beat down by profit warnings coming from the online fashion retailer recently.

Finally, natural gas producers were also being pushed down by ratings budget cuts which resulted in becoming more neutral instead of being the outperformers. Furthermore, AIM-listed firms moved past their average levels after the contamination control and hygiene group hoisted its full-year direction and management after a stronger-than-expected fourth quarter.