London close: Severely weak GDP data hits investor sentiment

The FTSE 100 closed down by 1.51% at 5,904.65, alongside a decline of 1.82% to 15,878.12 for the second-tier index.

Data released earlier by the Office for National Statistics showed the UK economy shrank at a record pace in March in an early sign of the deep recession that will hit jobs and living standards. Output contracted by 5.8% from the previous month, the steepest contraction on record since monthly records began in 1997.

Spreadex analyst Connor Campbell said: "The ongoing concerns over a second wave of coronavirus cases in those countries that have started to reopen post-lockdown collided with confirmation that the UK sank into a recession in the first quarter."

In equity markets, InterContinental Hotels was under the cosh after Citi reiterated its ‘sell’ rating on the stock, while Carnival fell following a report the cruise operator was planning to cut about 450 jobs at its UK arm.

Holiday operator TUI was under pressure after saying it would to cut up to 8,000 jobs globally as it called the Covid-19 pandemic "unquestionably the greatest crisis" the industry has ever faced. The UK’s biggest tour operator posted a wider first half loss of €845.8m compared to €289.1m a year ago.

On the upside, housebuilders were the standout gainers in the first half of the session after the government said the property market in England could reopen, with renters and buyers now free to move house and property viewings in person allowed.

But by the end of the trading day only shares Berkeley remained in the black, with Barratt Developments, Taylor Wimpey, and Persimmon all lower.

Taylor Wimpey said it would reopen sales offices and show homes from May 22, initially for pre-booked appointments and with social distancing measures in place. It also said sales rates have remained stable with signs of increased activity and customer interest over the last week.

Gains for shares of estate agents Foxtons and Purplebricks on the other hand did stick.

Russ Mould, investment director at AJ Bell, said the need to get Britain building again "is arguably pretty acute" as even a short disruption could set back attempts to build enough new homes to meet demand over the long term.

"Several builders have started to resume activity on site, with Crest Nicholson today the latest to announce its plans to do so. Crest Nicholson is a bit behind the curve with some of its peers already having been back at work in some fashion for several weeks," he said.

"Taylor Wimpey’s update this morning feels like a further significant step towards some kind of normality as it announces plans to reopen sales offices and show homes. This move is accompanied by measures we may have to get increasingly used to in the coming months with pre-booked appointments, perspex screens and social distancing markers likely to be part of the new normal across a range of sectors."

Market Movers

FTSE 100 (UKX) 5,904.05 -1.51%
FTSE 250 (MCX) 15,878.12 -1.82%
techMARK (TASX) 3,636.19 -1.34%

FTSE 100 - Risers

Hikma Pharmaceuticals (HIK) 2,556.00p 3.06%
Spirax-Sarco Engineering (SPX) 9,466.00p 2.20%
Ocado Group (OCDO) 2,100.00p 2.14%
GlaxoSmithKline (GSK) 1,742.20p 2.06%
Sage Group (SGE) 666.60p 1.77%
AstraZeneca (AZN) 9,004.00p 1.67%
Reckitt Benckiser Group (RB.) 7,102.00p 1.43%
Polymetal International (POLY) 1,642.50p 1.33%
Berkeley Group Holdings (The) (BKG) 4,150.00p 1.12%
Aveva Group (AVV) 3,933.00p 0.97%

FTSE 100 - Fallers

Carnival (CCL) 838.20p -10.77%
Melrose Industries (MRO) 83.60p -9.17%
InterContinental Hotels Group (IHG) 3,152.00p -8.64%
Compass Group (CPG) 1,146.00p -8.17%
Rolls-Royce Holdings (RR.) 257.90p -7.56%
M&G (MNG) 119.25p -7.34%
WPP (WPP) 550.20p -7.19%
BT Group (BT.A) 101.40p -6.80%
Glencore (GLEN) 138.46p -6.09%
Pearson (PSON) 430.00p -5.74%

FTSE 250 - Risers

Pets at Home Group (PETS) 251.20p 6.53%
B&M European Value Retail S.A. (DI) (BME) 353.00p 3.82%
Barr (A.G.) (BAG) 475.50p 3.26%
Derwent London (DLN) 2,872.00p 3.16%
AJ Bell (AJB) 439.00p 2.81%
Trainline (TRN) 365.00p 2.76%
Equiniti Group (EQN) 150.00p 2.30%
Howden Joinery Group (HWDN) 531.40p 2.07%
WH Smith (SMWH) 916.50p 1.95%
Energean Oil & Gas (ENOG) 600.00p 1.88%

FTSE 250 - Fallers

Aston Martin Lagonda Global Holdings (AML) 31.96p -15.98%
Cineworld Group (CINE) 54.72p -13.66%
PayPoint (PAY) 673.00p -13.05%
BMO Commercial Property Trust Limited (BCPT) 54.80p -12.46%
Coats Group (COA) 40.65p -10.46%
Provident Financial (PFG) 150.00p -9.96%
Vesuvius (VSVS) 350.00p -8.62%
Just Group (JUST) 49.46p -8.41%
Micro Focus International (MCRO) 412.90p -8.20%
Weir Group (WEIR) 867.20p -7.98%