London open: Stocks nudge lower after GDP data

London stocks nudged lower in early trade on Friday as investors mulled the latest UK GDP reading.

At 0840 GMT, the FTSE 100 was down 0.2% at 6,722.88 after figures from the Office for National Statistics showed Britain’s economy contracted by a less-than-expected 2.9% in January as the third national lockdown came into force.

Economists had forecast a month-on-month decline of 4.9%. The figure comes after a 1.2% expansion of gross domestic product (GDP) in December. Britain was forced back into lockdown at the start of January to counter a rising number of Covid-19 cases, with schools and non-essential businesses shut. GDP remained 9% below pre-pandemic levels in January.

Data also showed that exports of goods to the EU plunged by 40.7%, or £5.6bn, in the biggest monthly fall in UK imports and exports to the bloc in more than 20 years.

"Both imports and exports to the EU fell markedly in January, with much of this likely the result of temporary factors. Returns from our more timely surveys and other indicators suggest trading began to recover towards the end of the month," said deputy national statistician for economic statistics Jonathan Athow.

Spreadex analyst Connor Campbell said: "Following another record close from the Dow Jones and DAX on Thursday, the European markets started Friday with an air of hesitation.

"For the FTSE that cautiousness was arguably justified. Though the GDP reading for January came in notably better than the 4.9% contraction forecast, the UK economy still shrank by 2.9% in the first month of the year. This contributed to cable dropping 0.3%, which in itself allowed the FTSE to avoid a full foray into the red, instead dropping by a handful of points.

"There’s not a whole lot on the agenda to change things up this Friday, which could mean a historic, newsworthy week ends with a whimper, not a bang."

In equity markets, Berkeley Group fell after saying it was on track to report annual pre-tax profit similar to the £504m achieved the year before based on "robust" trading in the four months to the end of February. The housebuilder also said it expects the value of reservations for the current financial year to be around 20% lower than last year.

Other housebuilders followed suit, with Persimmon, Barratt and Taylor Wimpey all weaker.

On the upside, luxury goods brand Burberry surged to the top of the FTSE 100 after it lifted full-year guidance and reported a "strong rebound" in trading since December. In an unscheduled trading update, Burberry said fourth-quarter comparable retail sales were now expected to be 28% - 32% higher year-on-year.

Shopping centre owner Hammerson rallied even after its annual loss more than doubled as the value of its properties dropped and rental income plunged during the Covid-19 crisis.

Market Movers

FTSE 100 (UKX) 6,722.88 -0.21%
FTSE 250 (MCX) 21,455.72 -0.36%
techMARK (TASX) 4,131.88 -0.35%

FTSE 100 - Risers

Burberry Group (BRBY) 2,136.00p 7.53%
Barclays (BARC) 178.72p 2.56%
M&G (MNG) 222.00p 1.23%
Rentokil Initial (RTO) 474.60p 1.04%
Smith & Nephew (SN.) 1,398.00p 0.94%
Bunzl (BNZL) 2,262.00p 0.85%
Imperial Brands (IMB) 1,395.00p 0.79%
Spirax-Sarco Engineering (SPX) 11,635.00p 0.26%
SEGRO (SGRO) 924.00p 0.20%
BAE Systems (BA.) 494.40p 0.18%

FTSE 100 - Fallers

Berkeley Group Holdings (The) (BKG) 4,353.00p -4.79%
International Consolidated Airlines Group SA (CDI) (IAG) 208.30p -1.70%
Persimmon (PSN) 2,942.00p -1.47%
Barratt Developments (BDEV) 749.00p -1.47%
Scottish Mortgage Inv Trust (SMT) 1,151.00p -1.46%
Taylor Wimpey (TW.) 179.10p -1.40%
Melrose Industries (MRO) 175.95p -1.21%
Fresnillo (FRES) 945.60p -1.15%
Pershing Square Holdings Ltd NPV (PSH) 2,605.00p -1.14%
Auto Trader Group (AUTO) 560.40p -1.09%

FTSE 250 - Risers

Hammerson (HMSO) 34.45p 5.58%
RIT Capital Partners (RCP) 2,380.00p 3.93%
Tullow Oil (TLW) 57.24p 3.70%
Vivo Energy (VVO) 95.00p 2.48%
Mitchells & Butlers (MAB) 332.50p 1.84%
JPMorgan Japanese Inv Trust (JFJ) 628.00p 1.62%
888 Holdings (888) 322.00p 1.58%
Helios Towers (HTWS) 160.40p 1.52%
Rank Group (RNK) 180.20p 1.46%
Greencoat UK Wind (UKW) 126.60p 1.28%

FTSE 250 - Fallers

Euromoney Institutional Investor (ERM) 951.00p -2.96%
Bodycote (BOY) 780.00p -2.74%
Morgan Advanced Materials (MGAM) 307.50p -2.38%
AJ Bell (AJB) 411.50p -2.37%
C&C Group (CCR) 290.00p -2.36%
BMO Global Smaller Companies (BGSC) 149.20p -2.36%
Playtech (PTEC) 484.80p -2.32%
WH Smith (SMWH) 1,971.00p -2.23%
Provident Financial (PFG) 252.80p -2.17%
XP Power Ltd. (DI) (XPP) 4,990.00p -2.16%