European markets were in the green on Friday as stocks in the UK, France and Germany tracked a strong bounce in Asia following sharp global declines in the previous sessions.
Shares in online retail group THG (THG.L) jumped as much as 27% after it rejected a takeover bid and property tycoon Nick Candy expressed an interest. Advertising firm M&C Saatchi (SAA.L) surged 34% after bosses agreed a takeover by Next Fifteen Communications.
It came as retail sales unexpectedly jumped by 1.4% in April from a 1.2% drop the month before, beating economist forecasts of a 0.2% decline. This was despite inflation soaring 9% during the month.
The recovery was driven by a 2.8% surge in food store sales volumes, according to the Office for National Statistics.
However, ONS deputy director for surveys and economic indicators Heather Bovill said the “figures still show a continued longer-term downward trend” as overall sales fell 0.3% over the three months to April.
Separately, consumer confidence dipped to the lowest level since records began in 1974 amid growing concern over the cost of living crisis.
The latest snapshot from GfK shows UK consumers are now gloomier about their personal finance and economic outlook than they were during the financial crisis in 2008 amid fears Britain is headed for a recession. The consumer confidence number fell to a record low of -40 in May.
Richard Hunter, head of markets at interactive investor, said: “Mixed economic messages are adding to the volatility but detracting from the performance of markets, as investors continue to seek refuge from waning prices.”
Across the pond, US benchmarks were spooked by gloomy forecasts from major retailers like Target (TGT), Walmart (WMT) and Khol’s (KKS), with all three indexes on track for weekly losses as the sell-off that saw Wall Street tumble 4% on Wednesday continued on Thursday.
The benchmark S&P 500 (^GSPC) came close to bear market territory after losing 22.89 points, or 0.6%, to 3900.79, while the Dow Jones (^DJI) dipped 0.8% — both closing at their lowest level since March last year. The tech-heavy Nasdaq (^IXIC) retreated 0.3%.
“Yesterday’s [Thursday] price action saw a sea of red for markets in Europe with the most pain being felt by the retail sector after this week’s profit warnings from US retail giants Walmart, Target and Kohl’s,” said Michael Hewson, chief market analyst at CMC Markets.
“At the end of another choppy week for European markets sentiment appears to have become much more fragile, with the moves being seen in bond yields reflecting concern that we are heading for a growth slowdown.”
Asian stocks were in the green overnight after China cut its 5-year loan prime rate by 15 basis points, for the second time this year.