London stocks closed in a mixed state on Friday, with the top-flight index reversing earlier losses in afternoon trading, as investors pored through the latest UK GDP data.
The FTSE 100 ended the session up 0.36% at 6,761.47, while the FTSE 250 was 0.12% weaker at 21,506.47.
Sterling was in the red as well, last sliding 0.42% on the dollar to $1.3932, and moving 0.15% weaker against the euro to trade at 1.1656.
“Equity markets are a mixed bag this afternoon as higher government bond yields have chipped away at sentiment,” said CMC Markets analyst David Madden.
“Stock markets have enjoyed a positive run lately, largely due to the hopes in relation to economies loosening their restrictions in the months ahead, [and after] President Biden signed off on the US’ $1.9trn stimulus package last night.
“The prospect of higher growth comes at a cost – the likelihood of higher inflation – and that is pushing up yields.”
The moves came after figures from the Office for National Statistics earlier 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%, with the reading coming 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.
“UK GDP data highlighted the difficulties experienced by businesses in January, with the country struggling to overcome the effect of both Brexit and fresh lockdown measures at the same time,” said Joshua Mahony, senior market analyst at IG.
“While the January contraction figure was less significant than markets had been expecting, the -2.9% reading coupled with negative industrial and manufacturing production figures did highlight recent troubles.
“Fortunately, the rise in yields does highlight the expectations that we are moving in the right direction, with an impressive vaccination effort likely to spur a sharp economic expansion in the coming months.”
In equity markets, Berkeley Group fell 5.82% 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.
Some of its peers followed suit, with Persimmon down 1.41% and Barratt Developments losing 1.37%, although Taylor Wimpey managed gains of 0.06% by the close.
Also on the upside, luxury goods brand Burberry surged 6.87% 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 6.99% even after it posted a loss for 2020 as it took a hit from the pandemic.
Tullow Oil was boosted 10.18% by an upgrade to ‘overweight’ from ‘equalweight’ at Morgan Stanley, which hiked the price target to 75p from 38p.
Market Movers
FTSE 100 (UKX) 6,761.47 0.36%
FTSE 250 (MCX) 21,506.47 -0.12%
techMARK (TASX) 4,144.23 -0.05%
FTSE 100 – Risers
Burberry Group (BRBY) 2,123.00p 6.87%
Barclays (BARC) 180.60p 3.64%
M&G (MNG) 225.60p 2.87%
Kingfisher (KGF) 300.80p 2.04%
NATWEST GROUP PLC ORD 100P (NWG) 190.65p 2.01%
Lloyds Banking Group (LLOY) 41.21p 1.75%
Tesco (TSCO) 223.80p 1.73%
BAE Systems (BA.) 502.00p 1.72%
Associated British Foods (ABF) 2,423.00p 1.68%
Schroders (SDR) 3,415.00p 1.64%
FTSE 100 – Fallers
Berkeley Group Holdings (The) (BKG) 4,306.00p -5.82%
Fresnillo (FRES) 930.80p -2.70%
Rightmove (RMV) 561.60p -2.06%
Croda International (CRDA) 6,182.00p -1.81%
Scottish Mortgage Inv Trust (SMT) 1,148.00p -1.71%
Hikma Pharmaceuticals (HIK) 2,194.00p -1.66%
Just Eat Takeaway.Com N.V. (CDI) (JET) 7,324.00p -1.64%
London Stock Exchange Group (LSEG) 7,604.00p -1.55%
Sage Group (SGE) 590.80p -1.47%
Experian (EXPN) 2,420.00p -1.47%
FTSE 250 – Risers
Tullow Oil (TLW) 60.82p 10.18%
Hammerson (HMSO) 34.91p 6.99%
Rank Group (RNK) 187.00p 5.29%
Centrica (CNA) 53.90p 4.34%
Capita (CPI) 47.23p 4.26%
CMC Markets (CMCX) 429.50p 3.74%
IWG (IWG) 360.20p 3.15%
Capital & Counties Properties (CAPC) 172.80p 3.10%
Investec (INVP) 232.10p 2.87%
Domino’s Pizza Group (DOM) 349.60p 2.82%
FTSE 250 – Fallers
Playtech (PTEC) 449.30p -9.47%
Marshalls (MSLH) 715.50p -5.29%
Polar Capital Technology Trust (PCT) 2,130.00p -3.84%
Ibstock (IBST) 226.60p -3.82%
Centamin (DI) (CEY) 102.95p -3.51%
Allianz Technology Trust (ATT) 2,740.00p -3.18%
AO World (AO.) 305.00p -3.17%
Network International Holdings (NETW) 428.40p -2.86%
Baillie Gifford US Growth Trust (USA) 321.00p -2.73%
Oxford Instruments (OXIG) 1,824.00p -2.69%
