London pre-open: Stocks seen lower as investors digest GDP
London stocks were set to open lower on Tuesday following a mostly negative session on Wall Street, as investors digested the latest UK GDP data.
The FTSE 100 was called to open 78 points lower at 6,098.
Data 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 and March’s 6.9% decline 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."
In corporate news, online grocer Ocado reported a rise in half-year revenue as Britons turned to home deliveries during the coronavirus lockdown.
The company on Tuesday said revenue for the six months to May 31 increased 27.2% to £1.02bn. Retail core earnings almost doubled to £45.7m from £24.4 a year earlier.
Group core earnings fell 36% to £19.8m, reflecting increased costs from investment in Ocado’s International Solutions business, which also contributed to a loss before tax of £40.6m, narrowed from £147.4m in 2019.
AO World said 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.