London midday: Stocks fall after weak UK data

London stocks slumped as data revealed UK consumer confidence remained low and the UK current account deficit widened in the fourth quarter.

GfK’s consumer confidence index remained at zero in March for the second month, down from January's +4 and from the +4 seen in March last year. Analyst had expected a reading of -1.

“Despite good economic headlines about low inflation, interest rates and prices in the shops, concerns about Brexit and the ongoing euro zone crisis appear to be hitting home," Joe Staton, head of market dynamics at GfK said.

The British current account deficit widened to £32.7bn in the fourth quarter from £20.1bn in the third quarter. Analysts had pencilled in a deficit of £21.2bn, the Office for National Statistics revealed.

Howard Archer, chief UK and European economist at IHS Global Insight, said the widening of the current account deficit was a "particularly uncomfortable development" for the UK economy.

"While the markets have so far taken a relatively relaxed view of the UK’s elevated current account deficits, it could become an increasing problem if the markets lose confidence in the UK economy for any reason – especially given the size of the fourth quarter 2015 shortfall.”

The UK economy is expected to have grown 0.6% quarter-on-quarter in last three months of 2015, according to the final estimate from ONS. It compares to the previous estimate of 0.5% and the third quarter's 0.4%.

Compared to the same period a year earlier, GDP is estimated to have risen 2.1% in the fourth quarter, up from the prior projection of 1.9% and in line with the third quarter's growth.

Consumer demand continued to drive the growth, with household spending rising 0.6% in the fourth quarter, unchanged from the previous three months.

“While today’s GDP figures are nothing to write home about, they are at least steady at a time when a possible Brexit has become a very real concern," said Dennis de Jong, managing director at UFX.com.

Elsewhere, the Eurozone consumer prices index improved in March but remained in negative territory at -0.1%, according a flash estimate by Eurostat that was in line with consensus forecasts. Eurozone CPI was improved from -0.2% in February.

Core CPI, which excludes more volatile prices such as fuel and food, rose to 1.0% from 0.8% the month before and beating predictions for a rise to 0.9%.

Still to come, US initial jobless claims are at 1330 BST and the Chicago purchasing managers’ index is at 1445 BST.

Meanwhile, oil prices reversed gains from the previous session as government and tanker tracking data showed Iranian oil exports to Asia jumped nearly a quarter from a year ago to a two-year high in February.

Iran’s exports increased 24.6% year-on-year to 1.28m barrels per day to its main buyers in China, India, Japan and South Korea.

Brent crude dropped 0.2% to $39.18 per barrel and West Texas Intermediate fell 1.2% to $37.85 per barrel at 1138 BST.

Among corporate stocks, miners Antofagasta, Fresnillo and Randgold Resources advanced as gold and silver prices rose.

Barclays declined following reports its Asia-Pacific co-chief executive Eiji Nakai will leave the bank at the end of June.

TUI’s shares jumped after the travel group informed investors that overall demand and pricing for holidays has remained resilient in the first half of its financial year.

AO World gained after saying that it enjoyed a better fourth quarter than it expected.

Market Movers

FTSE 100 (UKX) 6,160.77 -0.68%
FTSE 250 (MCX) 16,895.39 -0.47%
techMARK (TASX) 3,118.70 -0.45%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 1,073.00p 4.38%
Antofagasta (ANTO) 475.20p 1.17%
Paddy Power Betfair (PPB) 9,680.00p 1.15%
Fresnillo (FRES) 949.00p 1.12%
Randgold Resources Ltd. (RRS) 6,335.00p 0.88%
Babcock International Group (BAB) 952.50p 0.74%
Worldpay Group (WI) (WPG) 273.80p 0.66%
Merlin Entertainments (MERL) 462.00p 0.61%
London Stock Exchange Group (LSE) 2,834.00p 0.50%
Hargreaves Lansdown (HL.) 1,337.00p 0.38%

FTSE 100 - Fallers

Pearson (PSON) 877.00p -3.15%
Old Mutual (OML) 191.70p -2.54%
BHP Billiton (BLT) 778.10p -1.95%
Standard Chartered (STAN) 462.95p -1.94%
Next (NXT) 5,455.00p -1.89%
Barclays (BARC) 148.80p -1.88%
Mondi (MNDI) 1,328.00p -1.63%
Sainsbury (J) (SBRY) 277.00p -1.39%
Wolseley (WOS) 3,941.00p -1.35%
Aviva (AV.) 453.80p -1.35%

FTSE 250 - Risers

AO World (AO.) 181.90p 5.27%
Acacia Mining (ACA) 276.70p 4.34%
Riverstone Energy Limited (RSE) 815.00p 3.03%
Kaz Minerals (KAZ) 170.00p 2.97%
Lancashire Holdings Limited (LRE) 550.50p 2.80%
Fidessa Group (FDSA) 2,481.00p 2.39%
OneSavings Bank (OSB) 335.20p 1.76%
Hastings Group Holdings (HSTG) 172.80p 1.65%
NMC Health (NMC) 1,050.00p 1.65%
Supergroup (SGP) 1,445.00p 1.62%

FTSE 250 - Fallers

Aldermore Group (ALD) 209.40p -4.82%
Interserve (IRV) 437.10p -4.00%
Moneysupermarket.com Group (MONY) 317.30p -3.35%
Allied Minds (ALM) 463.90p -3.23%
Melrose Industries (MRO) 357.30p -3.22%
Ocado Group (OCDO) 286.20p -2.85%
Electrocomponents (ECM) 242.20p -2.42%
Tullow Oil (TLW) 196.40p -2.14%
Morgan Advanced Materials (MGAM) 229.10p -2.09%
Big Yellow Group (BYG) 768.00p -2.04%