Market overview: Worse-than-estimated UK GDP drags on FTSE

1630 (Close): The FTSE 100 ended down 40.79 points to 6811.61 points after figures showed UK economic growth slowed to just 0.5% in the fourth quarter of 2014 due to contractions in construction and production. Economists had expected growth to come in at 0.6% after a 0.7% increase in the third quarter.

1558: US new home sales advanced 11.6% in December, beating expectations for a 2.7% gain. It followed a 6.7% fall in November.

1500: US consumer confidence increased more than forecast in January. The sentiment index jumped to 102.9 from 93.1 in December, compared to analysts' estimates for a reading of 95.5.

1330: US durable goods unexpectedly fell 3.4% in December following a 2.1% drop a month earlier. Analysts had predicted a 0.3% rise.

1203: US stock futures are lower with the S&P 500 and Dow Jones trading down 0.6% in pre-market trade. With quarterly results from Microsoft underwhelming investors last night, markets are turning nervous ahead of earnings from Apple this evening. Reports that Taiwanese Apple supplier Foxconn is looking to cut jobs on the back of falling sales growth are likely weighing on sentiment.

1100: Martin Beck, an advisor to the EY ITEM Club, said the data was “surprisingly weak”, but there is “little cause for concern”. He said: “The collapse in the oil price over the past few months is unambiguously good news for the UK economy, with inflation set to move into negative territory and consumers enjoying a substantial boost to their spending power.”

0930: UK GDP rose by just 0.5% in the fourth quarter, after 0.7% growth the preceding three months, missing expectations of a slowdown to 0.6%. On a year-on-year basis, growth improved to 2.7% from 2.6% but came in shy of the 2.8% forecast. The FTSE 100 is down nine points at 6,843.58.

0859: Shares in Easyjet have ascended after the British budget airline said it now expects an increase in revenues per seat in the first half. Sector peer IAG also gained after sweetening its offer for Aer Lingus to €2.55 per share, valuing the Dublin-based airline at €1.36bn. The share price of oil group Afren has collapsed 50% after the company said it needs to restructure its debts or receive an equity injection due to the “significant dislocation” in the oil market.

0841: UK stocks have opened flat with gains in the airline and mining sectors offset by falling bank shares, as markets paused at a fresh four-month high. London’s FTSE 100 settled at 6,852.40 on Monday, its best finish since 5 September 2014 when it closed at 6,855.10. Weighing on sentiment early on is the news that industrial profits in China dropped by 8% year-on-year in December, while a measure of small business confidence in Japan weakened in January.