London midday: Stocks a little lower as investors mull GDP
London stocks were still a little weaker by midday on Wednesday, with little in the way of corporate news to drive markets, as investors mulled the latest UK GDP reading.
The FTSE 100 was down 0.3% at 6,749.55.
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. This 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. However, second-quarter GDP was revised down by 0.5 percentage points to a 19.5% decline.
This means GDP for 2020 as a whole contracted by 9.8%, revised up a touch from the first estimate of 9.8% 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.
Deputy national statistician for Economic Statistics Jonathan Athow said: "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.
"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."
Capital Economics said: "The upward revision to GDP in the second half of 2020 means the economy does not have quite as far to recover from the Covid-19 crisis. And Q4’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 versus 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.
As we head towards the long Easter weekend, corporate news was scarce.
Hikma Pharmaceuticals was the standout gainer on the FTSE 100 after an upgrade to ‘buy’ at Jefferies, while BT was boosted by an upgrade to ‘buy’ at Bank of America Merrill Lynch.
Animal genetics company Genus was knocked lower by a downgrade to ‘hold’ at Stifel.
Investors were also eyeing Deliveroo, which made its stock market debut on Wednesday. With the shares tumbling as much as 31% in early trade, AJ Bell investment director Russ Mould joked that the company had better 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) 6,749.55 -0.33%
FTSE 250 (MCX) 21,586.83 0.06%
techMARK (TASX) 4,241.33 -0.41%
FTSE 100 - Risers
Hikma Pharmaceuticals (HIK) 2,276.00p 3.45%
Admiral Group (ADM) 3,125.00p 2.83%
BT Group (BT.A) 156.50p 1.82%
Bunzl (BNZL) 2,335.00p 1.43%
SSE (SSE) 1,455.00p 1.43%
Aveva Group (AVV) 3,406.00p 1.37%
CRH (CDI) (CRH) 3,421.00p 1.24%
Halma (HLMA) 2,382.00p 1.06%
Fresnillo (FRES) 865.40p 0.93%
Pearson (PSON) 782.00p 0.90%
FTSE 100 - Fallers
Standard Chartered (STAN) 502.60p -2.14%
Royal Dutch Shell 'B' (RDSB) 1,344.60p -1.75%
Royal Dutch Shell 'A' (RDSA) 1,421.60p -1.69%
Rolls-Royce Holdings (RR.) 106.85p -1.57%
Prudential (PRU) 1,553.00p -1.55%
Burberry Group (BRBY) 1,906.50p -1.52%
BAE Systems (BA.) 505.40p -1.48%
Mondi (MNDI) 1,886.00p -1.41%
BP (BP.) 297.25p -1.41%
Legal & General Group (LGEN) 281.80p -1.33%
FTSE 250 - Risers
Capita (CPI) 44.40p 5.61%
Sabre Insurance Group (SBRE) 254.50p 4.73%
IP Group (IPO) 126.00p 3.96%
Provident Financial (PFG) 218.60p 3.02%
Vectura Group (VEC) 113.80p 2.89%
ICG Enterprise Trust (ICGT) 1,010.00p 2.64%
SSP Group (SSPG) 367.00p 2.34%
Avon Rubber (AVON) 3,145.00p 2.28%
Airtel Africa (AAF) 81.50p 2.26%
Hiscox Limited (DI) (HSX) 866.60p 2.07%
FTSE 250 - Fallers
Cineworld Group (CINE) 100.00p -3.19%
Micro Focus International (MCRO) 569.00p -3.17%
Genus (GNS) 4,780.00p -3.04%
ITV (ITV) 122.55p -2.54%
Mediclinic International (MDC) 285.60p -2.33%
Watches of Switzerland Group (WOSG) 670.00p -1.90%
TBC Bank Group (TBCG) 998.00p -1.77%
Wood Group (John) (WG.) 271.90p -1.77%
Meggitt (MGGT) 479.90p -1.58%
Cairn Energy (CNE) 169.20p -1.57%