London close: Stocks finish weaker, Deliveroo slumps on debut

London stocks finished below the waterline on Wednesday, with little in the way of corporate news to drive markets, as investors mulled the latest UK GDP reading.

The FTSE 100 ended the session down 0.86% at 6,713.63, and the FTSE 250 was off 0.26% at 21.518.71.

Sterling was in the green against its major trading pairs, last rising 0.49% on the dollar to $1.3808, and advancing 0.19% against the euro to change hands at €1.1750.

“The markets main focus has been directed towards the prospects for an economic reopening and while that prospect is much closer in the US and the UK, there is some anticipation that Europe will get there eventually, though that optimism could well dissipate if we don’t get some progress on vaccinations, as well as evidence of a slowdown in infections,” said CMC Markets chief market analyst Michael Hewson.

“This prospect looks even further away than ever, given reports from the other side of the Channel that suggest France may well have to go into another lockdown, as President Macron gets set to go on French TV tonight, and deliver the bad news.

“While equity markets have had a good quarter, bond markets haven’t, with big falls in the price of longer-term bonds, sending yields sharply higher in the UK and US.”

Figures released earlier by the Office for National Statistics showed the economy grew a little more than initially estimated in the final quarter of last year, but the performance for 2020 as a whole was still the worst on record amid the pandemic.

Fourth-quarter GDP grew by 1.3%, up from an initial estimate of 1.0.% growth.

That left GDP 7.3% below the fourth quarter of 2019, up from a previous estimate of 7.8%.

GDP for the third quarter was revised up by 0.8 percentage points to 16.9% growth, while second-quarter GDP was revised down by 0.5 percentage points to a 19.5% decline.

That meant GDP for 2020 as a whole contracted by 9.8%, revised up a touch from its first estimate but still the worst contraction on record.

The household saving ratio increased to 16.1% in the fourth quarter, up from a revised 14.3% in the third.

Over the year, the ratio rose sharply, reaching a record high of 16.3%, compared with 6.8% in 2019.

“Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year,” said the ONS’ deputy national statistician for economic statistics Jonathan Athow.

“However, these new estimates paint the same overall picture as before, with historically large falls in GDP in the spring, followed by a recovery in the summer and autumn.”

Analysts at Capital Economics said the upward revision to GDP in the second half meant the economy did not have quite as far to recover from the coronavirus crisis as previously expected.

“And the fourth quarter’s high saving rate leaves plenty of scope for a rapid rebound in 2021, spurred and financed by consumers.”

Meanwhile, the latest survey from Nationwide showed house prices unexpectedly dipped in March ahead of the original deadline for the stamp duty holiday.

House prices fell 0.2% on the month following a 0.7% increase in February, and against expectations for a 0.4% rise.

On the year, prices jumped 5.7% in March following a 6.9% jump the month before and compared to expectations of a 6.4% increase.

Corporate news was thin on the ground ahead of the long Easter weekend, with Hikma Pharmaceuticals 3.45% after an upgrade to ‘buy’ at Jefferies, while BT was boosted 0.72% by an upgrade to ‘buy’ at Bank of America Merrill Lynch.

Animal genetics company Genus, meanwhile, was knocked 1.46% lower by a downgrade to ‘hold’ at Stifel.

Investors were also eyeing Deliveroo, which made its stock market debut on Wednesday morning before closing down 13.16%.

The shares tumbled as much as 31% in early trade, with AJ Bell investment director Russ Mould quipping that the company should get used to the nickname ‘Flopperoo’.

“Initially there was a lot of fanfare about the Amazon-backed company making its shares available to the public, including the ability for customers to buy stock in the IPO offer," he said.

“Sadly, the narrative took a turn for the worst when multiple fund managers came out and said they wouldn’t back the business due to concerns about working practices.

“This is likely to have spooked a lot of people who applied for shares in the IPO offer, meaning they are racing to dump them.”

Market Movers

FTSE 100 (UKX) 6,713.63 -0.86%
FTSE 250 (MCX) 21,518.71 -0.26%
techMARK (TASX) 4,222.09 -0.86%

FTSE 100 - Risers

Scottish Mortgage Inv Trust (SMT) 1,137.00p 3.84%
Hikma Pharmaceuticals (HIK) 2,283.00p 3.45%
Polymetal International (POLY) 1,421.00p 2.16%
Admiral Group (ADM) 3,101.00p 2.04%
Aveva Group (AVV) 3,422.00p 1.85%
Schroders (SDR) 3,500.00p 1.60%
SSE (SSE) 1,455.00p 1.43%
Sage Group (SGE) 612.80p 1.09%
Bunzl (BNZL) 2,323.00p 0.91%
United Utilities Group (UU.) 925.80p 0.87%

FTSE 100 - Fallers

British Land Company (BLND) 504.80p -3.30%
Mondi (MNDI) 1,856.00p -3.29%
Rolls-Royce Holdings (RR.) 105.30p -2.99%
WPP (WPP) 920.60p -2.83%
Melrose Industries (MRO) 166.90p -2.82%
Standard Chartered (STAN) 501.00p -2.75%
Kingfisher (KGF) 318.30p -2.60%
Johnson Matthey (JMAT) 3,013.00p -2.55%
Royal Dutch Shell 'B' (RDSB) 1,341.80p -2.46%
Prudential (PRU) 1,540.50p -2.35%

FTSE 250 - Risers

Vectura Group (VEC) 115.60p 4.52%
Sabre Insurance Group (SBRE) 253.00p 4.12%
SSP Group (SSPG) 372.40p 3.85%
Baillie Gifford US Growth Trust (USA) 307.00p 3.72%
Capita (CPI) 43.54p 3.57%
Allianz Technology Trust (ATT) 2,710.00p 3.44%
Indivior (INDV) 127.00p 3.25%
Centrica (CNA) 54.14p 3.12%
Avon Rubber (AVON) 3,170.00p 2.76%
Network International Holdings (NETW) 413.60p 2.58%

FTSE 250 - Fallers

Cineworld Group (CINE) 96.48p -6.60%
Micro Focus International (MCRO) 553.20p -5.85%
ITV (ITV) 120.15p -4.45%
Coats Group (COA) 56.90p -3.89%
Hammerson (HMSO) 34.99p -3.29%
Watches of Switzerland Group (WOSG) 661.00p -3.22%
TBC Bank Group (TBCG) 992.00p -3.15%
Royal Mail (RMG) 504.60p -3.04%
Wizz Air Holdings (WIZZ) 4,822.00p -2.90%
Virgin Money UK (VMUK) 189.05p -2.60%