London open: Stocks nudge lower after UK GDP, ahead of US inflation

Sharecast
Sharecast
Opening Market Report
07:12, 13th April 2021

(Sharecast News) - London stocks nudged lower in early trade on Tuesday as investors mulled the latest UK GDP reading and looked ahead to the release of US inflation data.
At 0845 BST, the FTSE 100 was down 0.2% at 6,878.04.

Spreadex analyst Connor Campbell said: "It was an exceedingly quiet start to trading - perhaps because Tuesday afternoon sees the latest US inflation reading.

"Yesterday's bond auction proved to be something of a non-event, failing to cause any truly noticeable movement. That's the first obstacle, then, cleared for the Dow Jones et al.

"Next up is this afternoon's CPI data. Analysts are expecting the standard figure to rise from 0.4% to 0.5% month-on-month, with the core reading up from 0.1% to 0.2%. Anything higher than those estimates will likely set alarm bells ringing; anything lower will act as reassurance about the pace of building inflationary pressures.

"Since the entire market has been caught up in the inflation/interest rates/bond yield fears that have intermittently taken hold this year, Tuesday's inflation figures are almost as relevant for Europe as they are for the US."

On home shores, figures released earlier by the Office for National Statistics showed the economy returned to growth in February despite Covid-19 restrictions.

The economy grew 0.4% following a 2.2% decline in January, and versus expectations of 0.6% growth. January's figure was revised up from a previous estimate of a 2.9% drop.

Still, GDP remained 7.8% below the levels seen in February 2020 - before the pandemic hit - compared with 3.1% below the initial recovery peak in October 2020.

An ONS spokesperson said: "The economy showed some improvement in February after the large falls seen at the start of the year but remains around 8% below its pre-pandemic level.

"Wholesalers and retailers both saw sales pick up a little, while manufacturing improved with car producers experiencing a partial recovery from a poor January.

"Construction grew strongly after revised figures showed they had struggled in the last couple of months.

"Exports to the EU recovered significantly from their January fall, though still remain below 2020 levels. However, imports from the EU are yet to significantly rebound, with a number of issues hampering trade."

In equity markets, travel and leisure stocks were weaker, with InterContinental Hotels, British Airways owner IAG, Premier Inn owner Whitbread and engine maker Rolls-Royce all down.

On the upside, Babcock surged even as it cautioned investors to expect impairments and charges worth £1.7bn for the full year ending 31 March following a contract profitability and balance sheet review.

Hays rallied after the recruiter said full-year operating profit is set to be at least £85m, beating market expectations of around £61m, given improving fees and good underlying cost management, and assuming a continuation of current market conditions.

XP Power gained ground as it reported a 16% jump in first-quarter revenue and said it was recommending a dividend of 18p a share.

JD Sports Fashion advanced as it missed annual profits expectations despite more people buying sports and casualwear during the pandemic lockdown, but reinstated dividend payments and forecast higher earnings for the current year.

Just Eat Takeaway was also in the black after it said first-quarter orders rose 79%.

Market Movers

FTSE 100 (UKX) 6,878.04 -0.16%
FTSE 250 (MCX) 22,152.30 -0.01%
techMARK (TASX) 4,273.50 -0.36%

FTSE 100 - Risers

Antofagasta (ANTO) 1,729.00p 1.71%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,476.00p 1.66%
Weir Group (WEIR) 1,873.00p 1.60%
Taylor Wimpey (TW.) 187.75p 1.57%
Bunzl (BNZL) 2,472.00p 1.56%
B&M European Value Retail S.A. (DI) (BME) 543.80p 1.53%
Croda International (CRDA) 6,652.00p 1.25%
Evraz (EVR) 602.40p 1.21%
Auto Trader Group (AUTO) 577.40p 1.19%
Avast (AVST) 470.50p 1.16%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 5,048.00p -1.48%
Royal Dutch Shell 'A' (RDSA) 1,383.80p -1.34%
Royal Dutch Shell 'B' (RDSB) 1,320.00p -1.26%
International Consolidated Airlines Group SA (CDI) (IAG) 203.90p -1.19%
BAE Systems (BA.) 499.50p -1.09%
Whitbread (WTB) 3,413.00p -0.96%
Rolls-Royce Holdings (RR.) 107.30p -0.85%
BP (BP.) 295.90p -0.84%
Hikma Pharmaceuticals (HIK) 2,412.00p -0.78%
GlaxoSmithKline (GSK) 1,287.80p -0.76%

FTSE 250 - Risers

Babcock International Group (BAB) 277.60p 14.71%
Hays (HAS) 166.30p 4.13%
XP Power Ltd. (DI) (XPP) 4,900.00p 2.30%
Royal Mail (RMG) 510.00p 2.00%
Games Workshop Group (GAW) 10,310.00p 1.88%
Redrow (RDW) 669.00p 1.76%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,476.00p 1.66%
Derwent London (DLN) 3,379.00p 1.59%
Pagegroup (PAGE) 548.00p 1.48%
Electrocomponents (ECM) 1,035.00p 1.47%

FTSE 250 - Fallers

CLS Holdings (CLI) 224.50p -2.81%
FirstGroup (FGP) 87.00p -2.79%
SSP Group (SSPG) 317.10p -2.37%
Aston Martin Lagonda Global Holdings (AML) 1,926.00p -2.26%
Tullow Oil (TLW) 45.09p -2.17%
Kaz Minerals (KAZ) 848.80p -2.01%
Restaurant Group (RTN) 117.20p -2.01%
Apax Global Alpha Limited (APAX) 190.40p -1.86%
Micro Focus International (MCRO) 531.20p -1.74%
Spirent Communications (SPT) 242.20p -1.54%

Disclaimer & Declaration of Interest

The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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