London open: Stocks fall as dire UK GDP, second wave fears weigh

London stocks fell in early trade on Wednesday as worries about a second wave of coronavirus infections and dire UK GDP data dented sentiment.

At 0830 BST, the FTSE 100 was down 1% at 5,936.03.

Spreadex analyst Connor Campbell said: "The ongoing concerns over a second wave of coronavirus cases in those countries that have started to reopen post-lockdown collided with confirmation that the UK sank into a recession in the first quarter.

"If anything, the morning’s data was far better than anyone had forecast. With pre-release estimates at -2.5% to -3%, it was a surprise that the UK economy ‘only’ contracted 2%. Meanwhile analysts had been expecting a 7.9% collapse for March specifically; instead it came in at -5.8%. That trend persisted across the bulk of Wednesday’s readings, including manufacturing and industrial production.

"That actually means the UK avoided the kind of Q1 contraction seen by its peers - France fell 5.8%, Italy 4.7% and Spain 5.2%. However, and it is a sledgehammer of a however, that is almost purely down to when lockdown was implemented rather than any actual outperformance, meaning even more pain is going to be felt in Q2."

In equity markets, InterContinental Hotels was under the cosh after Citi reiterated its ‘sell’ rating on the stock, while Carnival lost ground following a report the cruise operator was planning to cut about 450 jobs at its UK arm.

Holiday operator TUI was under pressure after saying it would to cut up to 8,000 jobs globally as it called the Covid-19 pandemic the “unquestionably the greatest crisis” the industry has ever faced. The UK’s biggest tour operator posted a wider first half loss of €845.8m compared to €289.1m a year ago.

On the upside, housebuilders were the standout gainers after the government said the property market in England could reopen, with renters and buyers now free to move house and property viewings in person allowed. Barratt Developments, Taylor Wimpey, Persimmon and Berkeley were all firmly in the black.

Taylor Wimpey said it would reopen sales offices and show homes from May 22, initially for pre-booked appointments and with social distancing measures in place. It also said sales rates have remained stable with signs of increased activity and customer interest over the last week.

Market Movers

FTSE 100 (UKX) 5,936.03 -0.98%
FTSE 250 (MCX) 16,000.15 -1.07%
techMARK (TASX) 3,662.33 -0.63%

FTSE 100 - Risers

Taylor Wimpey (TW.) 148.85p 2.06%
Ferguson (FERG) 6,090.00p 2.04%
Barratt Developments (BDEV) 499.40p 1.57%
Berkeley Group Holdings (The) (BKG) 4,155.00p 1.24%
Hikma Pharmaceuticals (HIK) 2,501.00p 0.85%
Just Eat Takeaway.Com N.V. (CDI) (JET) 8,770.00p 0.80%
Sage Group (SGE) 659.20p 0.64%
Rolls-Royce Holdings (RR.) 280.60p 0.57%
Spirax-Sarco Engineering (SPX) 9,300.00p 0.41%
Unilever (ULVR) 4,245.00p 0.38%

FTSE 100 - Fallers

Melrose Industries (MRO) 87.70p -4.72%
InterContinental Hotels Group (IHG) 3,295.00p -4.49%
Carnival (CCL) 899.00p -4.30%
Evraz (EVR) 244.50p -3.97%
easyJet (EZJ) 487.10p -3.93%
Glencore (GLEN) 141.78p -3.84%
BT Group (BT.A) 105.25p -3.26%
JD Sports Fashion (JD.) 522.20p -3.22%
M&G (MNG) 124.75p -3.07%
Legal & General Group (LGEN) 193.85p -2.98%

FTSE 250 - Risers

Crest Nicholson Holdings (CRST) 241.20p 5.33%
Watches of Switzerland Group (WOSG) 234.50p 3.08%
G4S (GFS) 95.58p 2.77%
AJ Bell (AJB) 438.50p 2.69%
Foresight Solar Fund Limited (FSFL) 104.50p 2.45%
Pantheon International (PIN) 1,840.00p 2.34%
TR Property Inv Trust (TRY) 310.00p 2.31%
Oxford Instruments (OXIG) 1,208.00p 2.20%
Impax Environmental Markets (IEM) 292.00p 2.10%
Brewin Dolphin Holdings (BRW) 273.50p 1.67%

FTSE 250 - Fallers

Provident Financial (PFG) 156.90p -5.82%
Hyve Group (HYVE) 12.80p -5.04%
Stagecoach Group (SGC) 58.60p -5.02%
FirstGroup (FGP) 56.00p -4.92%
Virgin Money UK (VMUK) 69.14p -4.92%
National Express Group (NEX) 200.00p -4.76%
Avon Rubber (AVON) 2,655.00p -4.50%
Sirius Real Estate Ltd. (SRE) 65.00p -4.27%
Vesuvius (VSVS) 368.40p -3.81%
Hiscox Limited (DI) (HSX) 708.00p -3.75%