London midday: Stocks in the red as investors take profits
London stocks were a little weaker by midday on Thursday as investors took some profits following eight consecutive days of gains, amid a raft of corporate news and the latest UK GDP reading.
The FTSE 100 was down 0.4% at 6,359.43, having rallied sharply earlier in the week on news that the Covid-19 vaccine being developed by Pfizer and BioNTech had shown 90% efficacy.
IG said: "After days of gains the rally in equities is beginning to slow down, as indices throughout Europe move into the red. As enthusiasm about a vaccine begins to fade the FTSE 100 has lost ground, with a slowdown in the excited buying of hard-hit value names in sectors like travel, airlines, banks and others."
Investors were also mulling over the latest GDP figures from the Office for National Statistics, which showed the economy grew by a record 15.5% in the third quarter as lockdown measures were eased, but slowed in September.
Although the quarterly growth reflects some recovery of activity following the record contraction seen in the second quarter, the economy is still 9.7% below where it was at the end of last year. Analysts had been expecting growth of 15.8% in Q3. Between April and June, GDP contracted 19.8%.
Compared with the same quarter a year ago, GDP fell by 9.6% following a 21.5% contraction in the previous quarter.
Output in the services, production and construction sectors increased by record amounts in the third quarter but remained below levels seen in the fourth quarter of last year, before the pandemic hit.
On the month, GDP growth slowed to just 1.1% in September from a revised 2.2% in August, missing consensus expectations of 1.5% growth.
Analysts warned the economy was set to shrink again as a result of the second lockdown that began earlier this month.
Thomas Pugh, UK economist at Capital Economics, said: "September and Q3 feel not just like old news but like ancient news! We already know that GDP will struggle to rise in October as tighter restrictions were imposed and that it will take a hammering in November as the effects of the second Covid-19 lockdown are felt."
ING economist James Smith said there will be a sharp decline to follow the third-quarter GDP bounceback.
"We expect a 6-7% decline in UK GDP through November, rendering the unprecedented bounce-back we saw in the third quarter 'old news'," he said.
"We expect the latest lockdowns to leave the size of the UK economy some 15% below pre-virus levels, as of November," he added.
In equity markets, Burberry was the standout gainer on the FTSE 100 as it posted a 75% drop in first-half profit driven by the Covid-19 crisis but said it had seen an improvement in sales in the second quarter and that revenue would be affected by fewer markdowns.
Qinetiq and Hill & Smith were also on the front foot after well-received updates.
On the downside, Sainsburys slumped as its shares went ex-dividend, along with Shell.
Legal & General lost ground after saying it planned an unchanged dividend for 2020 and for the payout to increase more slowly than earnings and cash generation over five years. The insurer and asset manager said its "ambition" remained for annual operating profit to be broadly in line with 2019's result of £2.3bn.
Elsewhere, National Express and Vesuvius also fell after trading updates.
Market Movers
FTSE 100 (UKX) 6,359.43 -0.36%
FTSE 250 (MCX) 19,430.43 0.47%
techMARK (TASX) 3,967.20 0.23%
FTSE 100 - Risers
3i Group (III) 1,134.00p 4.61%
Fresnillo (FRES) 1,120.00p 3.27%
DCC (DCC) 5,872.00p 2.87%
Coca-Cola HBC AG (CDI) (CCH) 2,249.00p 2.83%
Polymetal International (POLY) 1,691.50p 2.48%
Avast (AVST) 460.00p 2.27%
InterContinental Hotels Group (IHG) 4,606.00p 2.26%
Bunzl (BNZL) 2,492.00p 2.13%
Ocado Group (OCDO) 2,349.00p 2.04%
Whitbread (WTB) 2,735.00p 1.94%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 94.06p -4.43%
Sainsbury (J) (SBRY) 201.70p -3.63%
HSBC Holdings (HSBA) 376.15p -2.95%
M&G (MNG) 174.00p -2.79%
Standard Chartered (STAN) 416.70p -2.69%
Croda International (CRDA) 6,316.00p -2.53%
Barclays (BARC) 132.28p -2.39%
Legal & General Group (LGEN) 230.90p -2.20%
BP (BP.) 237.80p -2.16%
RSA Insurance Group (RSA) 649.40p -1.90%
FTSE 250 - Risers
QinetiQ Group (QQ.) 321.40p 10.45%
Grafton Group Ut (GFTU) 834.00p 5.97%
AO World (AO.) 423.50p 5.35%
Serco Group (SRP) 119.70p 5.09%
PureTech Health (PRTC) 249.00p 4.84%
Vistry Group (VTY) 795.00p 4.61%
Kainos Group (KNOS) 1,212.00p 4.30%
Marshalls (MSLH) 801.00p 3.96%
XP Power Ltd. (DI) (XPP) 4,360.00p 3.56%
FirstGroup (FGP) 60.15p 3.53%
FTSE 250 - Fallers
Spirent Communications (SPT) 263.00p -7.39%
TBC Bank Group (TBCG) 1,162.00p -3.81%
Airtel Africa (AAF) 76.30p -3.78%
Virgin Money UK (VMUK) 134.30p -3.69%
Rank Group (RNK) 127.00p -3.64%
Watches of Switzerland Group (WOSG) 461.50p -3.45%
Cineworld Group (CINE) 46.58p -3.12%
Hochschild Mining (HOC) 232.00p -3.09%
UK Commercial Property Reit Limited (UKCM) 76.40p -2.80%
Indivior (INDV) 122.50p -2.62%