London close: Stocks end slightly lower as investors weigh UK GDP, interims

The FTSE 100 ended slightly lower on Thursday as investors weighed UK economic data and sifted through a batch of corporate interim statements.

The London index fell 0.04% to 7,161.49 at the close.

Jasper Lawler, senior market analyst at London Capital Group, said: “The FTSE 100 has been teetering above 7130, its November peak, for the last three trading sessions. The UK index is caught between rising global sentiment that catapulted every major American equity benchmark to record highs, and a recovery in the pound, which will hurt foreign earnings.”

The pound dipped 0.52% against the dollar to $1.2568 but rose 0.28% versus the euro to €1.1787 at 1616 GMT.

The greenback rebounded from a seven-week low on Thursday as investor appetite improved with higher global bond yields and stable global stock markets, a day after the Dow Jones Industrial Average topped the 20,000 mark for the first time.

Meanwhile, a better-than-expected report on UK economic growth failed to make much of a mark on equities.

The preliminary estimate on fourth quarter gross domestic product from the Office for National Statistics showed 0.6% quarter-on-quarter growth, unchanged from the third quarter and ahead of expectations for a slowdown to 0.5%.

Compared to the same period a year earlier, GDP increased 2.2%, also in line with the previous quarter’s annual gain and compared to forecasts of 2.1%.

The ONS said the growth was driven by the services sector.

It marked the second quarterly GDP release since the Brexit vote and while the latest figures show no signs of being hurt by uncertainty surrounding the referendum, many economists expect economic growth will slow in 2017 as rising inflation hurts household spending.

“It appears that the overreliance on the services sector, which actually grew 0.8% during the fourth quarter, may have spooked investors given that the resilience of consumer spending will be tested by the pressures of rising inflation as 2017 continues,” said Connor Campbell, financial analyst at Spreadex.

In other UK news, MPs will be given five days to debate the bill triggering Article 50, which begins the formal process of Brexit.

Meanwhile, Prime Minister Theresa May is set to meet with Trump in the US on Friday to discuss a potential trade deal once the UK leaves the European Union.

Across the pond, US initial jobless claims increased by 22,000 to 259,000 in the week ended 21 January, which was below the 245,000 expected. Claims for the previous week were revised up to 237,000 from an initial reading of 234,000.

The US goods trade surplus fell 0.5% to $65bn in December, compared to estimates of $64.4bn.

Wholesale inventories rose 1% month-on-month, beating forecasts for a 0.1% gain.

IHS Markit’s services purchasing managers’ index for the US rose to 55.1 in January from 53.9 a month earlier, ahead of expectations for a reading of 54.4.

US new home sales fell 10.4% to 536,000 units in December, a 10-month low. November's sales pace was revised up to 598,000 units from an initial 592,000 units. Analysts had expected a 1.2% drop to 585,000.

Among corporate stocks, Unilever’s shares plunged after it reported lower-than-expected sales in the fourth quarter, as the Anglo-Dutch consumer goods giant was affected by economic woes in Brazil and demonetisation in India, two of its largest markets.

Costa Coffee and Premier Inn owner Whitbread slumped despite reporting that it will meet full-year expectations after third quarter revenue rose as increased sales at Costa Coffee were not matched by its restaurant division.

Paper and packaging group Mondi dipped as it signed off on a €470m investment in modernisation and expansion of its Steti mill, which will increase capital expenditure in the three years to 2019.

Spreadbetting company CMC Markets tumbled after it said activity in the third quarter had improved somewhat from the second, but cautioned over uncertainty from a regulatory clampdown on spread-betting.

Equipment rental group Ashtead was a high riser on positive read-across from US peer United Rentals, whose fourth-quarter earnings on Wednesday beat analysts’ expectations.

Royal Bank of Scotland edged higher as it has confirmed it will take a further £3.1bn provisions to pay off a looming penalty in the US for its sale of residential mortgage-backed securities in the run up to the financial crisis. RBS said on Thursday that it has set aside a total of £6.7bn, which would reduce its tangible net asset value per share at 30 September 2016 by 27p to 311p.

Card Factory rallied as it said that it is confident of delivering full-year underlying pre-tax profit slightly ahead of analyst consensus as it reported a rise in sales for the 11 months to the end of December and announced the departure of its chief financial officer.

IMI gained after Credit Suisse upgraded the group to ‘outperform’ from ‘neutral’ and lifted the price target to 1,220p from 1,020p.

Market Movers

FTSE 100 (UKX) 7,161.49 -0.04%
FTSE 250 (MCX) 18,142.66 0.05%
techMARK (TASX) 3,229.92 -0.19%

FTSE 100 - Risers

Diageo (DGE) 2,218.00p 3.60%
Ashtead Group (AHT) 1,649.00p 3.45%
Smiths Group (SMIN) 1,530.00p 2.55%
Carnival (CCL) 4,340.00p 2.53%
Royal Bank of Scotland Group (RBS) 233.10p 2.46%
Pearson (PSON) 622.00p 1.72%
Aviva (AV.) 486.00p 1.65%
Hargreaves Lansdown (HL.) 1,352.00p 1.58%
Land Securities Group (LAND) 1,006.00p 1.41%
RSA Insurance Group (RSA) 584.00p 1.30%

FTSE 100 - Fallers

Sage Group (SGE) 600.00p -5.29%
Smurfit Kappa Group (SKG) 2,056.00p -4.95%
Unilever (ULVR) 3,191.00p -4.70%
Whitbread (WTB) 3,900.00p -3.92%
Fresnillo (FRES) 1,372.00p -3.38%
Randgold Resources Ltd. (RRS) 6,420.00p -3.17%
Associated British Foods (ABF) 2,392.00p -2.88%
Antofagasta (ANTO) 837.00p -2.39%
Provident Financial (PFG) 2,678.00p -2.33%
Schroders (SDR) 2,938.00p -2.26%

FTSE 250 - Risers

IMI (IMI) 1,176.00p 4.53%
TP ICAP (TCAP) 453.50p 3.19%
Rank Group (RNK) 198.90p 3.11%
Brown (N.) Group (BWNG) 225.10p 2.79%
Paysafe Group (PAYS) 384.50p 2.56%
Vesuvius (VSVS) 466.90p 2.55%
Aberdeen Asset Management (ADN) 274.90p 2.54%
IP Group (IPO) 194.80p 2.53%
Card Factory (CARD) 250.10p 2.50%
Ashmore Group (ASHM) 310.90p 2.44%

FTSE 250 - Fallers

Polymetal International (POLY) 873.50p -6.43%
Ferrexpo (FXPO) 140.20p -4.76%
Renishaw (RSW) 2,795.00p -3.95%
Ted Baker (TED) 2,872.00p -3.82%
Acacia Mining (ACA) 394.10p -3.81%
Hochschild Mining (HOC) 229.70p -3.77%
Halfords Group (HFD) 365.60p -3.28%
Petra Diamonds Ltd.(DI) (PDL) 152.40p -3.12%
Vedanta Resources (VED) 1,035.00p -3.09%
Centamin (DI) (CEY) 143.40p -2.65%