London close: Stocks end week on a down note with US CPI ahead
London stocks were still in the red on Friday as investors failed to find any comfort in news the UK narrowly avoided following into recession last year.
Investors were also looking ahead to the US consumer price report with some economists having warned over recent days of the risk - although not a certainty - of a slower rate of decline in inflation over the next few months, before falling back more quickly again over the spring.
The FTSE 100 was down 0.36% at 7,882.45, while the second-tier index gave back 1.22% to 20,030.07.
In parallel, cable was on the back foot, slipping 0.58% to 1.2051.
"Caught between a strong payrolls report and next week’s US CPI reading, which has been the only piece of economic data worth watching of late, most stock markets have struggled to make headway this week," said IG chief market analyst Chris Beauchamp.
"The FTSE 100, and other European markets, have had a rollicking start to the year, but it looks time to hand back some of those gains as economic pessimism rises again."
Figures released earlier by the Office for National Statistics showed that GDP fell 0.5% in December (consensus: -0.3%) following growth of 0.1% in November and 0.55% in October. December’s print was dragged down by a 0.8% decline in the services sector, which recorded falls in health, education, transport and storage, arts and entertainment.
Nonetheless, it was not enough to push the quarterly data into negative territory, and GDP was 0.0% in the three months to December, as expected, following a decline of 0.3% in November.
The definition of a recession is two consecutive quarters of contraction.
Russ Mould, investment director at AJ Bell, said: "Zero GDP growth is hardly a reason to celebrate, and markets are certainly not jumping for joy."
Investors were also mulling data released in China by the National Bureau of Statistics, which showed that consumer price inflation ticked up January as the country reopened after more than two years of Covid restrictions.
Meanwhile, the producer price index fell 0.8% year-over-year in January following a 0.7% decline the month before. Analysts had been expecting a 0.5% drop.
Aggregate social financing on the other hand jumped by 5.8trn yuan in January (consensus: 5.4trn).
In equity markets, online supermarket Ocado was the standout loser on the FTSE 100.
Standard Chartered slumped right behind after First Abu Dhabi Bank reiterated that it was not evaluating a possible offer for the bank. Shares surged on Thursday after Bloomberg reported that FAB was pressing ahead with a potential offer at between $30bn and $35bn.
JD Sports was under pressure as Adidas slid after it said operating losses could hit €700m in 2023 due to the Yeezy fallout.
Abrdn was knocked lower by a downgrade to ‘reduce’ at HSBC, which said it does not see the wealth manager coming close to its 2020-23 targets in the near term.
Polymer products maker Victrex lost ground as it held full-year guidance but said volumes had been softer during the first quarter, with ongoing weakness in several of its end markets.
On the upside, BP and Shell surged as oil prices rallied after Russia said it will cut oil production in retaliation against Western sanctions.
Saga gained after confirming it is in exclusives discussions with Australia’s Open Insurance Technologies over the potential sales of its underwriting business, Acromas Insurance Company limited.
Market Movers
FTSE 100 (UKX) 7,882.45 -0.36%
FTSE 250 (MCX) 20,030.07 -1.22%
techMARK (TASX) 4,537.00 -0.42%
FTSE 100 - Risers
Shell (SHEL) 2,539.00p 2.96%
BP (BP.) 560.00p 2.62%
BT Group (BT.A) 136.00p 1.57%
Compass Group (CPG) 1,877.50p 1.16%
Imperial Brands (IMB) 2,024.00p 1.00%
British American Tobacco (BATS) 3,045.00p 0.89%
Vodafone Group (VOD) 92.08p 0.89%
BAE Systems (BA.) 849.80p 0.78%
Centrica (CNA) 98.14p 0.74%
Haleon (HLN) 329.65p 0.61%
FTSE 100 - Fallers
Ocado Group (OCDO) 635.20p -11.28%
Standard Chartered (STAN) 729.40p -4.98%
Smurfit Kappa Group (CDI) (SKG) 3,213.00p -4.55%
International Consolidated Airlines Group SA (CDI) (IAG) 160.78p -4.54%
Frasers Group (FRAS) 760.00p -4.28%
InterContinental Hotels Group (IHG) 5,470.00p -4.27%
Abrdn (ABDN) 206.40p -4.04%
Croda International (CRDA) 6,716.00p -3.67%
Endeavour Mining (EDV) 1,858.00p -3.43%
Anglo American (AAL) 3,228.00p -3.43%
FTSE 250 - Risers
Oxford Instruments (OXIG) 2,485.00p 3.97%
Energean (ENOG) 1,240.00p 3.16%
Syncona Limited NPV (SYNC) 172.60p 2.74%
Harbour Energy (HBR) 324.10p 2.27%
Warehouse Reit (WHR) 105.40p 1.93%
Tullow Oil (TLW) 35.90p 1.47%
TP Icap Group (TCAP) 174.10p 1.34%
NB Private Equity Partners Ltd. (NBPE) 1,630.00p 1.24%
Hilton Food Group (HFG) 688.00p 1.18%
Capricorn Energy (CNE) 247.40p 1.07%
FTSE 250 - Fallers
ASOS (ASC) 824.00p -8.95%
Wizz Air Holdings (WIZZ) 2,647.00p -7.54%
Darktrace (DARK) 239.40p -5.79%
Watches of Switzerland Group (WOSG) 845.50p -5.53%
PureTech Health (PRTC) 239.00p -5.16%
Carnival (CCL) 822.00p -5.15%
Just Group (JUST) 82.75p -4.61%
888 Holdings (DI) (888) 67.95p -4.50%
Network International Holdings (NETW) 278.00p -4.40%
easyJet (EZJ) 463.90p -4.21%