British blue-chip stocks rose slightly on Thursday but lagged European peers, with miners falling and retailer Next slumping as a difficult consumer environment bit into its profits. The FTSE inched up 0.2 percent, while the main German and French indexes both rose more and hit fresh highs. The British index was supported by gains among financial stocks which were led higher by a 2.8 percent surge in HSBC after profits at the major bank beat expectations and its capital position improved.
The bank's common equity tier 1 ratio, a measure of financial strength, was 14.22 percent, up from 11.9 percent in the same period last year. "The stronger CET1 print leaves the group in a stronger position to absorb any regulatory headwinds," said KBW analyst Richard Smith.
Royal Dutch Shell shares inched up 0.3 percent, paring earlier gains driven by a solid earnings update, as oil prices fell to their lowest since November. Concern over rising global crude supply and high inventories effectively wiped out most of the gains made since Opec announced its first supply cut in eight years. Shell more than doubled first-quarter profits as higher crude prices gave a helping hand and refining margins improved.
A difficult environment for UK consumers weighed on clothing and homeware retailer Next, the biggest faller on the FTSE.
Its shares sank 5.1 percent, scoring their worst day since its January profit warning, after it further trimmed its 2017 profit guidance, saying shoppers were cutting back on spending. "This shows just how tough the high street is," said Andrew Jackson, manager of Miton UK Value Opportunities fund. "Disposable incomes are being squeezed, and even the mighty Next has no way of countering these headwinds." The results had a ripple effect on peers Marks & Spencer and Sainsbury, which fell 2.5 and 1.6 percent respectively.
Next adds to growing concerns over a consumer squeeze which also hit carpet retailer Carpetright and Costa coffee owner Whitbread's results last week. Materials sector stocks were the biggest drag to the FTSE, with miners Antofagasta, Anglo American and Glencore all down more than 3 percent as copper fell to five-months lows on rising inventories and worries over demand.
Precious metal miner Randgold Resources inched higher after reporting a 33 percent rise in first-quarter profit, though it said production fell due to labour strikes at two of its mines. Mid-cap bookmaker Ladbrokes Coral slipped 4.3 percent after full-year results revealed weaker UK trading. Retail net revenue, the majority of its business, fell 2 percent. Insurer RSA jumped to a 5-1/2-year high after it reported premiums rose 14 percent in the first quarter.
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