London open: Stocks edge lower as investors mull GDP data

London stocks edged lower in early trade on Wednesday following a negative session on Wall Street, as investors mulled the latest UK GDP reading.

At 0905 BST, the FTSE 100 was down 0.3% at 6,754.63.

Figures released earlier by the Office for National Statistics showed the economy grew a little more than initially estimated in the final quarter of last year but the performance for 2020 as a whole was still the worst on record amid the pandemic.

Fourth-quarter GDP grew by 1.3%, up from an initial estimate of 1.0.% growth. This left GDP 7.3% below the fourth quarter of 2019, revised from a previous estimate of 7.8%.

GDP for the third quarter was revised up by 0.8 percentage points to 16.9% growth. However, second-quarter GDP was revised down by 0.5 percentage points to a 19.5% decline.

This means GDP for 2020 as a whole contracted by 9.8%, revised up a touch from the first estimate of 9.8% but still the worst contraction on record.

The household saving ratio increased to 16.1% in the fourth quarter from a revised 14.3% in the third. Over the year, the ratio rose sharply, reaching a record high of 16.3%, compared with 6.8% in 2019.

Deputy national statistician for Economic Statistics Jonathan Athow said: "Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year.

"However, these new estimates paint the same overall picture as before, with historically large falls in GDP in the spring, followed by a recovery in the summer and autumn."

Capital Economics said: "The upward revision to GDP in the second half of 2020 means the economy does not have quite as far to recover from the Covid-19 crisis. And Q4’s high saving rate leaves plenty of scope for a rapid rebound in 2021, spurred and financed by consumers."

Meanwhile, the latest survey from Nationwide showed house prices unexpectedly dipped in March ahead of the original deadline for the stamp duty holiday.

House prices fell 0.2% on the month following a 0.7% increase in February, and versus expectations for a 0.4% rise. On the year, prices jumped 5.7% in March following a 6.9% jump the month before and compared to expectations of a 6.4% increase.

As we head towards the long Easter weekend, corporate news was scarce.

Hikma Pharmaceuticals was the standout gainer on the FTSE 100 after an upgrade to ‘buy’ at Jefferies, while BT was boosted by an upgrade to ‘buy’ at Bank of America Merrill Lynch.

Market Movers

FTSE 100 (UKX) 6,754.63 -0.26%
FTSE 250 (MCX) 21,591.56 0.08%
techMARK (TASX) 4,247.08 -0.27%

FTSE 100 - Risers

Hikma Pharmaceuticals (HIK) 2,273.00p 3.32%
JD Sports Fashion (JD.) 850.00p 1.80%
BT Group (BT.A) 156.20p 1.63%
SSE (SSE) 1,454.00p 1.36%
3i Group (III) 1,180.50p 1.11%
Admiral Group (ADM) 3,069.00p 0.99%
Renishaw (RSW) 6,440.00p 0.94%
Next (NXT) 8,098.00p 0.87%
Evraz (EVR) 578.20p 0.84%
Antofagasta (ANTO) 1,703.50p 0.74%

FTSE 100 - Fallers

Standard Chartered (STAN) 505.40p -1.60%
M&G (MNG) 206.40p -1.43%
Mondi (MNDI) 1,887.00p -1.36%
Taylor Wimpey (TW.) 180.70p -1.28%
BP (BP.) 297.65p -1.28%
Compass Group (CPG) 1,458.50p -1.22%
Burberry Group (BRBY) 1,915.50p -1.06%
HSBC Holdings (HSBA) 426.15p -1.04%
BAE Systems (BA.) 508.20p -0.94%
Royal Dutch Shell 'B' (RDSB) 1,356.60p -0.88%

FTSE 250 - Risers

IP Group (IPO) 128.00p 5.61%
Vectura Group (VEC) 113.80p 2.89%
Tullow Oil (TLW) 48.86p 2.69%
Apax Global Alpha Limited (APAX) 195.00p 2.63%
Playtech (PTEC) 454.80p 2.57%
Avon Rubber (AVON) 3,140.00p 2.11%
Pets at Home Group (PETS) 415.80p 1.96%
Provident Financial (PFG) 216.20p 1.89%
Sabre Insurance Group (SBRE) 247.50p 1.85%
Hochschild Mining (HOC) 198.80p 1.84%

FTSE 250 - Fallers

Micro Focus International (MCRO) 566.80p -3.54%
Genus (GNS) 4,768.00p -3.29%
Cineworld Group (CINE) 100.25p -2.95%
Rank Group (RNK) 186.60p -1.79%
Oxford Instruments (OXIG) 1,916.00p -1.64%
Virgin Money UK (VMUK) 190.95p -1.62%
Watches of Switzerland Group (WOSG) 672.00p -1.61%
ITV (ITV) 123.85p -1.51%
Mediclinic International (MDC) 288.20p -1.44%
Murray Income Trust (MUT) 836.00p -1.42%