London open: Stocks fall as investors mull GDP figures
London stocks fell in early trade on Tuesday as sentiment took a hit after California rolled back on its reopening plans and following the release of disappointing UK GDP data.
At 0840 BST, the FTSE 100 was down 1% at 6,117.38, while sterling was 0.3% lower versus the dollar at 1.2519.
Worries about the coronavirus pandemic continued to play on investors' minds after California reimposed restrictions on indoor activities due to a surge in new cases.
CMC Markets analyst Michael Hewson said: "Despite making yet another record high in the Nasdaq yesterday US markets rolled over into the close, closing sharply lower, as concerns that the continued rise in infection cases will prompt more US states to push back their re-opening plans as California followed Texas and Arizona in shutting downs bars, restaurants and cinemas, as hospitalisations soared."
On home shores, figures out earlier from the Office for National Statistics showed the UK economy grew 1.8% on the month in May. This was a big improvement on April’s 20.3% slump but well below consensus expectations of 5.5% growth.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "GDP languished 24.5% below January’s pre-Covid peak in May, as the maintenance of a strict lockdown to curb Covid-19 prevented the economy from recovering meaningfully."
Later in the day, market participants will shift their attention across the pond, with earnings due from the likes of JPMorgan Chase, Citigroup and Wells Fargo.
In equity markets, Halma was under the cosh as it reported record annual profit and revenue underpinned by acquisitions, but warned that adjusted pre-tax profit for FY2021 will fall 5% to 10% on the year.
Online grocer Ocado was in the red even as it posted a rise in half-year revenue as Britons turned to home deliveries during the coronavirus lockdown. The company said revenue for the six months to May 31 increased 27.2% to £1.02bn.
On the upside, AO World rallied after saying it experienced strong demand during the Covid-19 crisis but was cautious about the outlook as it reported a smaller annual loss. The online household appliance retailer's operating loss for the year to the end of March narrowed to £3.8m from £13m as total revenue rose to £1.05bn from £902.5m.
AO said the crisis had converted many customers to online shopping but warned that shrinking economies, fewer housing transactions and a hard Brexit could hit sales.
FTSE 100 - Risers
WPP (WPP) 601.00p 1.28%
BT Group (BT.A) 112.40p 1.17%
ITV (ITV) 68.14p 0.86%
Imperial Brands (IMB) 1,418.00p 0.78%
Royal Dutch Shell 'B' (RDSB) 1,222.80p 0.41%
BP (BP.) 297.55p 0.30%
Royal Dutch Shell 'A' (RDSA) 1,283.00p 0.30%
Morrison (Wm) Supermarkets (MRW) 185.55p 0.16%
Unilever (ULVR) 4,288.00p 0.12%
Flutter Entertainment (FLTR) 10,970.00p 0.00%
FTSE 100 - Fallers
Halma (HLMA) 2,164.00p -5.54%
Avast (AVST) 547.00p -5.45%
Scottish Mortgage Inv Trust (SMT) 914.00p -4.69%
Aveva Group (AVV) 3,960.00p -3.11%
Polymetal International (POLY) 1,563.00p -3.10%
Persimmon (PSN) 2,574.00p -3.09%
JD Sports Fashion (JD.) 626.20p -3.00%
Barratt Developments (BDEV) 526.40p -2.84%
Fresnillo (FRES) 965.60p -2.74%
Rolls-Royce Holdings (RR.) 260.60p -2.69%
FTSE 250 - Risers
AO World (AO.) 171.20p 4.39%
Contour Global (GLO) 209.00p 2.45%
Pantheon International (PIN) 2,190.00p 1.86%
IP Group (IPO) 66.20p 1.85%
Morgan Advanced Materials (MGAM) 234.00p 1.74%
National Express Group (NEX) 165.30p 1.60%
PureTech Health (PRTC) 289.00p 1.40%
Royal Mail (RMG) 173.25p 0.87%
G4S (GFS) 131.55p 0.80%
GCP Infrastructure Investments Ltd (GCP) 115.00p 0.70%
FTSE 250 - Fallers
Avon Rubber (AVON) 3,605.00p -4.25%
Mitchells & Butlers (MAB) 162.80p -4.24%
Vivo Energy (VVO) 74.80p -3.98%
Trainline (TRN) 422.40p -3.83%
Cineworld Group (CINE) 54.46p -3.78%
Aston Martin Lagonda Global Holdings (AML) 47.00p -3.57%
QinetiQ Group (QQ.) 288.80p -3.35%
Greggs (GRG) 1,533.00p -3.34%
Sanne Group (SNN) 616.00p -3.30%
Clarkson (CKN) 2,070.00p -3.27%