London close: Stocks finish red as investors digest weak GDP data
FTSE 100
8,040.38
16:34 24/04/24
London stocks finished in the red at the close on Friday, with the pound remaining under pressure after it emerged that the UK economy contracted in the second quarter for the first time since 2012.
The FTSE 100 ended the session down 0.44% at 7,253.85, and the broader FTSE 250 was off 0.24% at 19,092.15.
In currencies, sterling was last 0.45% weaker on the dollar at $1.2078, and down 0.74% against the euro at €1.0774.
It came after the latest set of growth figures from the Office for National Statistics sparked fears of a recession.
A weaker pound meant the FTSE was still able to outperform its European counterparts, with Italy's FTSE MIB down 2.48% and the pan-Europe Stoxx 600 index 0.88% lower as London closed, amid political turmoil in Italy where deputy Prime Minister Matteo Salvini called for a snap election.
Back at home, gross domestic product contracted 0.2% quarter-on-quarter in the second quarter, compared to 0.5% growth in the first quarter, which was boosted by Brexit stockpiling.
Analysts had been expecting no growth.
Year-on-year, GDP grew 1.2% in the second quarter, down from 1.8% growth and falling short of expectations of a 1.4% increase.
“GDP contracted in the second quarter for the first time since 2012 after robust growth in the first quarter,” said Rob Kent Smith, head of GDP at the ONS.
“Manufacturing output fell back after a strong start to the year, with production brought forward ahead of the UK’s original departure date from the EU.”
Kent Smith said the construction sector also weakened after a buoyant start to the year, while the “often-dominant” service sector delivered virtually no growth at all.
“The trade deficit narrowed markedly, as imports fell following a sharp rise in the first quarter ahead of the UK’s original departure date from the EU.”
Oanda analyst Craig Erlam that heading into a no-deal Brexit in recession would be a “nightmare scenario” for Boris Johnson's team, adding that it could further drag on the pound at a time when it was already in virtual free-fall.
“The reaction to the data wasn't particularly positive either, with the pound now testing its recent lows and eyeing 1.20 against the dollar.
“Brexiteers may struggle to blame project fear as the PR battle with the People's Vote campaign heats up so we can probably expect plenty of finger-pointing at how badly Europe is performing and how the global slowdown is to blame.”
More broadly, trade tensions were in focus again following a Bloomberg report that the US was planning to delay a decision on granting licenses that would allow US companies to sell to Chinese tech company Huawei.
In equity markets, advertising giant WPP maintained its momentum on the FTSE 100 as its first-half revenue rose 1.6% to £7.6bn, beating expectations of £7.5bn.
The company backed its full-year guidance even as pre-tax profit fell 44% to £478m, and its shares ended the day ip 7.21%.
Hikma Pharmaceuticals was ahead 6.11% over on the 250, as it lifted the full-year sales outlook for its generic drug business and reported a 7% jump in first-half group revenue.
Shares in security services firm G4S lost some of their steam in late trading, but still closed up 0.79% after it announced plans to separate its cash solutions business and said first-half underlying pre-tax profit increased 7.4% to £175m on revenue of £3.7bn, up 4.7% on the year.
William Hill was in the green by 6.47% following interim results that were a slight beat versus expectations.
The gambling group's adjusted first-half operating profit fell 33% to £76.2m as it took a hit from the government's regulatory cap on fixed odds betting terminals and US expansion costs.
Market Movers
FTSE 100 (UKX) 7,253.85 -0.44%
FTSE 250 (MCX) 19,092.15 -0.24%
techMARK (TASX) 3,839.38 -0.33%
FTSE 100 - Risers
WPP (WPP) 981.00p 7.21%
Next (NXT) 6,016.00p 2.70%
AstraZeneca (AZN) 7,351.00p 1.72%
JD Sports Fashion (JD.) 615.60p 1.38%
Hargreaves Lansdown (HL.) 2,075.00p 1.22%
SEGRO (SGRO) 758.20p 1.12%
InterContinental Hotels Group (IHG) 5,341.00p 1.06%
Auto Trader Group (AUTO) 535.20p 0.98%
Rolls-Royce Holdings (RR.) 779.40p 0.75%
Compass Group (CPG) 2,064.00p 0.73%
FTSE 100 - Fallers
Evraz (EVR) 562.80p -8.87%
Antofagasta (ANTO) 829.20p -4.65%
NMC Health (NMC) 2,023.00p -3.44%
ITV (ITV) 107.35p -2.89%
Rio Tinto (RIO) 4,041.50p -2.80%
International Consolidated Airlines Group SA (CDI) (IAG) 452.30p -2.54%
Prudential (PRU) 1,493.50p -2.45%
Coca-Cola HBC AG (CDI) (CCH) 2,734.00p -2.32%
Standard Life Aberdeen (SLA) 250.10p -2.30%
Kingfisher (KGF) 208.00p -2.16%
FTSE 250 - Risers
Funding Circle Holdings (FCH) 123.20p 16.45%
Woodford Patient Capital Trust (WPCT) 44.95p 9.90%
William Hill (WMH) 156.25p 6.47%
Hikma Pharmaceuticals (HIK) 1,953.50p 6.11%
Aston Martin Lagonda Global Holdings (AML) 520.00p 3.79%
Sanne Group (SNN) 554.00p 3.36%
Amigo Holdings (AMGO) 144.60p 2.99%
Centamin (DI) (CEY) 141.55p 2.98%
Provident Financial (PFG) 386.00p 2.96%
Acacia Mining (ACA) 245.20p 2.59%
FTSE 250 - Fallers
Hill & Smith Holdings (HILS) 1,102.00p -5.81%
Intu Properties (INTU) 36.82p -5.05%
Metro Bank (MTRO) 298.80p -4.48%
PayPoint (PAY) 917.00p -4.38%
Grafton Group Units (GFTU) 665.00p -3.76%
Barr (A.G.) (BAG) 647.00p -3.43%
Spectris (SXS) 2,314.00p -2.85%
Equiniti Group (EQN) 207.60p -2.72%
Travis Perkins (TPK) 1,214.50p -2.68%
Investec (INVP) 421.50p -2.68%