London open: Stocks nudge lower as investors mull GDP
London stocks nudged lower in early trade on Wednesday as investors mulled the latest UK GDP figures.
At 0855 BST, the FTSE 100 was down 0.1% at 7,077.63.
Data released earlier by the Office for National Statistics showed the economy contracted a touch more than initially estimated in the first quarter as households saved more during the third national lockdown.
Gross domestic product fell 1.6% between January and March, compared to an initial estimate of a 1.5% decline. That leaves GDP 8.8% below pre-pandemic levels, revised from a first estimate of 8.7%.
The household saving ratio rose to 19.9% in the first quarter of 2021 from 16.1% in the fourth quarter of 2020, hitting its second-highest level on record after a 25.9% surge in the second quarter of last year.
Deputy national statistician for Economic Statistics Jonathan Athow said: "Today’s updated GDP figures show the same picture as our earlier estimate with schools, hospitality and retail all hit by the reimposition of the lockdown in January and February, with some recovery in March.
"With many services unavailable, households again saved at record levels with only last spring seeing more saved.
"Lower imports from Europe and delayed payments to EU institutions cut our total deficit with the rest of the world."
Paul Dales, chief UK economist at Capital Economics said: "The small downward revision to Q1 GDP growth probably won’t stop the economy from rising back to its pre-pandemic peak in the coming months. And the larger rebound in the household saving rate increases the potential for faster rises in GDP further ahead."
In equity markets, travel stocks were under the cosh yet again amid worries about restrictions and the impact of the Delta variant. British Airways and Iberia parent IAG, engine maker Rolls-Royce, InterContinental Hotels and Premier Inn owner Whitbread were all weaker. On the FTSE 250, cruise operator Carnival, travel company Tui, budget airline easyJet and WH Smith also fell.
Dixons Carphone was a touch lower after it reinstated its dividend as it swung back to profit on the back of a massive boost in online sales of electrical goods during Covid lockdowns.
On the upside, broadcaster ITV was the top riser on the FTSE 100, likely boosted by the Euros and the fact that England has reached the quarter finals.
Opioid addiction treatment maker Indivior surged after it lifted its 2021 guidance following a better-than-expected business performance through the first half of the year.
In broker note action, Workspace was boosted by an upgrade to ‘outperform’ at RBC, while Cairn Energy was knocked lower by a downgrade to ‘hold’ at Berenberg.
Market Movers
FTSE 100 (UKX) 7,077.63 -0.14%
FTSE 250 (MCX) 22,534.15 -0.04%
techMARK (TASX) 4,466.95 0.19%
FTSE 100 - Risers
ITV (ITV) 126.60p 0.96%
Experian (EXPN) 2,834.00p 0.71%
Croda International (CRDA) 7,390.00p 0.65%
Smith & Nephew (SN.) 1,568.50p 0.64%
Flutter Entertainment (CDI) (FLTR) 13,460.00p 0.64%
Avast (AVST) 503.00p 0.60%
Ferguson (FERG) 10,200.00p 0.59%
St James's Place (STJ) 1,490.50p 0.57%
AstraZeneca (AZN) 8,717.00p 0.50%
Halma (HLMA) 2,729.00p 0.48%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 172.08p -1.05%
Fresnillo (FRES) 778.60p -0.99%
Glencore (GLEN) 310.60p -0.99%
BAE Systems (BA.) 518.40p -0.96%
B&M European Value Retail S.A. (DI) (BME) 569.20p -0.94%
Polymetal International (POLY) 1,550.00p -0.80%
Barclays (BARC) 171.82p -0.80%
Berkeley Group Holdings (The) (BKG) 4,646.00p -0.79%
Anglo American (AAL) 2,873.50p -0.73%
Weir Group (WEIR) 1,862.50p -0.72%
FTSE 250 - Risers
Indivior (INDV) 159.20p 9.57%
Watches of Switzerland Group (WOSG) 843.00p 2.43%
Domino's Pizza Group (DOM) 395.40p 1.75%
Genus (GNS) 5,045.00p 1.47%
Workspace Group (WKP) 840.50p 1.45%
Dechra Pharmaceuticals (DPH) 4,408.00p 1.29%
Big Yellow Group (BYG) 1,319.00p 1.23%
Impax Environmental Markets (IEM) 482.50p 1.15%
Hipgnosis Songs Fund Limited NPV (SONG) 123.00p 1.15%
Apax Global Alpha Limited (APAX) 198.00p 1.02%
FTSE 250 - Fallers
Cairn Energy (CNE) 144.90p -4.42%
International Public Partnerships Ltd. (INPP) 167.80p -2.44%
Beazley (BEZ) 327.00p -1.92%
Carnival (CCL) 1,626.60p -1.41%
Frasers Group (FRAS) 601.00p -1.31%
Ashmore Group (ASHM) 380.40p -1.30%
Restaurant Group (RTN) 127.00p -1.24%
Marks & Spencer Group (MKS) 147.75p -1.24%
easyJet (EZJ) 881.40p -1.23%
Pagegroup (PAGE) 568.00p -1.22%