London close: Stocks nudge lower as RBS and Just Eat lose ground
London stocks ended the day a touch lower on Friday as investors weighed up a solid update from advertising giant WPP and some better-than-expected US growth figures against disappointing updates from the likes of RBS and Just Eat.
The FTSE 100 finished 0.1% lower at 7,428.19, while the pound was up 0.3% against the dollar at 1.2931 and flat versus the euro at 1.1591.
Across the pond, data from the Department of Commerce showed the US economy grew much more quickly than expected at the start of the year, helped by strong contributions from household spending, exports and non-residential fixed investment.
The annual rate of growth in first quarter gross domestic product hit 3.2% following growth of 2.2% at the tail end of 2018, beating consensus forecasts of 1.8% growth.
On home turf, figures from UK Finance revealed that UK mortgage approvals rose more than expected in March, to their highest level in nine months. Mortgage approvals increased to 39,980 last month from 39,207 in February, coming in above consensus expectations for a level of 38,700.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the rise in mortgage approvals is another sign that Brexit uncertainty has had little adverse impact on households' spending decisions.
The data also showed that lending to consumers grew 4.1% in March, up from 3.5% in February and marking the best rate of growth since June.
Meanwhile, the latest quarterly survey from the Confederation of British Industry showed that factories in the UK have been stockpiling goods at the fastest rate since the 1950s amid Brexit uncertainty. Stocks of raw materials, work in progress, and finished goods all grew at their fastest paces on record in the quarter to April, the CBI said.
However, the total orders balance fell to -5 in April from 1 in March, missing expectations for a reading of 3.
In UK equity markets, online food delivery service Just Eat was under the cosh as it posted a smaller-than-expected jump in first-quarter group orders and said growth in UK orders had slowed.
Russ Mould, investment director at AJ Bell, said: "While a big noise is made about the strength of its international business, UK order growth slowed sharply in the period.
"As you would expect its excuses are made to order and ready to go - the comparison with a strong performance a year before, warm weather in February and Easter coming late.
"What it doesn’t mention is the increasingly competitive landscape for online takeaways with Deliveroo and Uber Eats making plays for market share.
"The company has already responded to the competitive threat with a change of model, investing in delivery services at the expense of short-term profitability. But this alienated some investors who liked the strategy of simply providing an online platform for local takeaways, and thus avoiding having to spend that much cash."
Royal Bank of Scotland fell sharply as it warned that uncertainty over Brexit would make trading more difficult as falling revenue drove a 16% fall in first-quarter profit.
Spreadex analyst Connor Campbell said: "The real kicker appeared to be RBS casting doubts over its ability to meet its full year targets. Though the bank kept its guidance unchanged, it highlighted how the uncertain outcome of the UK-EU divorce, and the impact that has on business borrowing, ‘is likely to make income growth more challenging in the near term’."
Elsewhere, oil giants BP and Shell gushed lower as oil prices slid after US President Trump said he called OPEC and told the cartel to bring oil prices down.
Glencore shares were weaker after it announced late on Thursday that it is being investigated by the US Commodity Futures Trading Commission over possible corrupt practices that may have led to potential violations of some regulations.
Education publisher Pearson slipped as it backed its full-year guidance and reported underlying revenue growth of just 2% for the first quarter.
Ferrexpo tanked after saying that Deloitte LLP has resigned from its office as statutory auditor with immediate effect, while Hastings lost ground as its net revenue slipped 1% in the first quarter. Direct Line and Admiral fell in sympathy.
WPP was a bright spot after the advertising giant backed its 2019 guidance as it posted a rise in first-quarter revenue but a drop in like-for-like revenue due to "significant" client losses last year, particularly in the US.
Computacenter surged as it said it was on track to meet full-year guidance and that revenue and profitability in the first quarter to the end of March 2019 were ahead of the same quarter a year ago.
Stagecoach was also a high riser after shares of the bus and rail operator were upgraded to 'buy' at Citi.
Market Movers
FTSE 100 (UKX) 7,428.19 -0.08%
FTSE 250 (MCX) 19,856.87 -0.07%
techMARK (TASX) 3,602.98 0.57%
FTSE 100 - Risers
WPP (WPP) 955.00p 5.41%
Smurfit Kappa Group (SKG) 2,356.00p 2.70%
Hargreaves Lansdown (HL.) 2,276.00p 2.29%
BT Group (BT.A) 230.00p 2.24%
Melrose Industries (MRO) 201.10p 1.95%
Sainsbury (J) (SBRY) 220.20p 1.94%
ITV (ITV) 139.40p 1.90%
Centrica (CNA) 106.10p 1.87%
Associated British Foods (ABF) 2,566.00p 1.87%
Vodafone Group (VOD) 141.92p 1.65%
FTSE 100 - Fallers
Just Eat (JE.) 714.40p -4.57%
Royal Bank of Scotland Group (RBS) 240.00p -4.00%
Glencore (GLEN) 310.85p -3.30%
BP (BP.) 556.10p -2.32%
AstraZeneca (AZN) 5,781.51p -1.83%
Royal Dutch Shell 'B' (RDSB) 2,451.00p -1.80%
Royal Dutch Shell 'A' (RDSA) 2,437.00p -1.56%
easyJet (EZJ) 1,158.00p -1.49%
Direct Line Insurance Group (DLG) 337.90p -1.20%
Anglo American (AAL) 2,010.50p -1.16%
FTSE 250 - Risers
Computacenter (CCC) 1,275.00p 18.27%
Stagecoach Group (SGC) 133.40p 9.61%
AJ Bell (AJB) 407.00p 7.96%
Bank of Georgia Group (BGEO) 1,737.00p 4.51%
Clarkson (CKN) 2,545.00p 3.88%
Greene King (GNK) 704.40p 3.19%
UDG Healthcare Public Limited Company (UDG) 639.50p 2.81%
SIG (SHI) 151.10p 2.37%
Royal Mail (RMG) 254.30p 2.33%
Merlin Entertainments (MERL) 375.10p 2.32%
FTSE 250 - Fallers
Ferrexpo (FXPO) 192.60p -28.37%
Hastings Group Holdings (HSTG) 191.00p -12.79%
Premier Oil (PMO) 98.22p -6.37%
Hunting (HTG) 592.00p -5.73%
Wood Group (John) (WG.) 490.40p -4.59%
Tullow Oil (TLW) 225.20p -4.09%
Rank Group (RNK) 153.80p -3.88%
Contour Global (GLO) 204.50p -3.31%
Kaz Minerals (KAZ) 650.00p -3.01%
FDM Group (Holdings) (FDM) 966.00p -2.82%