London open: Stocks fall after GDP data; Barratt bucks trend

London stocks fell in early trade on Wednesday as investors digested the latest UK GDP reading.

At 0840 BST, the FTSE 100 was down 0.5% at 7,097.55.

Figures released earlier by the Office for National Statistics showed the economy grew less than expected in August despite the easing of Covid measures.

The economy grew 0.4% in August following a 0.1% contraction in July. This was a little weaker than consensus expectations for a 0.5% increase and leaves GDP 0.8% below its pre-pandemic level in February 2020.

July’s contraction was revised down from a previous estimate of 0.1% growth.

The service sector grew by 0.3% in August, while manufacturing was 0.5% higher. Production output rose 0.8%, thanks mainly to the reopening of oil rigs, while construction output shrank 0.2%.

Darren Morgan, director of economic statistics at the ONS, said: "The economy picked up in August as bars, restaurants and festivals benefited from the first full month without Covid-19 restrictions in England.

"This was offset by falls in health activity with fewer people visiting GPs and less testing and tracing.

"However, later and slightly weaker data from a number of industries now mean we estimate the economy fell a little overall in July."

Paul Dales, chief UK economist at Capital Economics, said: "The improvement in August probably had a lot to do with the fading of the restraint from July’s ‘pingdemic’, which at one point meant more than 1m people were self-isolating."

Later in the day, investors will turn their attention to US inflation data and the latest minutes from the Federal Open Market Committee.

In equity markets, house builder Barratt was the standout performer on the FTSE 100 after it said strong demand for its homes had continued into the current fiscal year despite a reduction in government incentives, adding it was on track to deliver full-year medium targets. Peers Taylor Wimpey, Persimmon and Berkeley also pushed higher.

Man Group was the top gainer on the FTSE 250 after it posted a rise in third-quarter assets under management, driven by "strong" net inflows.

On the downside, Just Eat Takeaway fell sharply even as it reported a 25% jump in third-quarter orders and reiterated its full-year guidance.

In broker note action, Britvic was boosted by an upgrade to ‘buy’ at HSBC, while BT was knocked lower by a downgrade to ‘reduce’ by the same outfit.

RHI Magnesita was in the red after a downgrade to ‘sector perform’ at RBC Capital Markets.

Market Movers

FTSE 100 (UKX) 7,097.55 -0.46%
FTSE 250 (MCX) 22,451.41 -0.08%
techMARK (TASX) 4,527.61 -0.23%

FTSE 100 - Risers

Barratt Developments (BDEV) 663.20p 3.02%
Taylor Wimpey (TW.) 153.25p 2.38%
Persimmon (PSN) 2,622.00p 1.95%
Bunzl (BNZL) 2,481.00p 1.92%
Ashtead Group (AHT) 5,600.00p 1.33%
Polymetal International (POLY) 1,307.00p 1.20%
Berkeley Group Holdings (The) (BKG) 4,270.00p 1.05%
Aveva Group (AVV) 3,522.00p 1.01%
Croda International (CRDA) 8,518.00p 0.85%
Coca-Cola HBC AG (CDI) (CCH) 2,510.00p 0.80%

FTSE 100 - Fallers

Informa (INF) 551.80p -3.32%
BT Group (BT.A) 140.95p -2.75%
Rio Tinto (RIO) 4,873.00p -2.66%
BHP Group (BHP) 1,921.40p -1.73%
Anglo American (AAL) 2,744.50p -1.65%
Admiral Group (ADM) 3,010.00p -1.38%
Evraz (EVR) 578.80p -1.06%
Vodafone Group (VOD) 109.66p -1.03%
Aviva (AV.) 400.10p -1.02%
Associated British Foods (ABF) 1,753.50p -0.93%

FTSE 250 - Risers

Man Group (EMG) 214.10p 6.16%
Diversified Energy Company (DEC) 105.20p 3.75%
Britvic (BVIC) 903.50p 2.53%
TP Icap Group (TCAP) 161.56p 2.25%
Spirent Communications (SPT) 285.20p 1.79%
Petropavlovsk (POG) 23.60p 1.64%
Pets at Home Group (PETS) 482.40p 1.60%
Redrow (RDW) 668.00p 1.59%
Vistry Group (VTY) 1,145.00p 1.33%
BH Macro Ltd. GBP Shares (BHMG) 3,610.00p 1.11%

FTSE 250 - Fallers

RHI Magnesita N.V. (DI) (RHIM) 3,000.00p -5.60%
Chrysalis Investments Limited NPV (CHRY) 221.00p -5.19%
XP Power Ltd. (DI) (XPP) 4,930.00p -3.90%
Ferrexpo (FXPO) 308.80p -3.14%
Centrica (CNA) 59.56p -2.49%
Vesuvius (VSVS) 464.40p -2.02%
Harbour Energy (HBR) 359.80p -1.69%
Drax Group (DRX) 482.80p -1.52%
Babcock International Group (BAB) 350.00p -1.41%
Bodycote (BOY) 798.00p -1.36%