London stocks had pared earlier small losses to trade flat by midday on Friday as investors mulled the latest UK GDP data, with travel and leisure issues under the cosh.
The FTSE 100 was steady at 6,528.66, while sterling was down 0.3% against the dollar at 1.3782 after figures from the Office for National Statistics showed the economy contracted by a record 9.9% last year as the coronavirus pandemic took its toll, but avoided a double-dip recession.
In the fourth quarter, GDP rose 1%, following 16.1% growth in the third quarter.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: “The UK may have swerved a technical double dip recession, but the record breaking annual fall in economic output underlines the damage wreaked by Covid on businesses up and down the country.
“The temporary reprieve from lockdown in December gave a leg up to the services industry which grew by 1.7%, helping push overall growth up to 1.2% in December slightly higher than expected.
“But the economy is almost 10% smaller than it was before the pandemic hit. There is still a mountain to climb in this recovery and there will be a lot more pain to come given the current nationwide shutdowns.”
In equity markets, travel and leisure stocks were among the worst performers, with British Airways parent IAG, InterContinental Hotels, pub groups Mitchells & Butlers, holiday company TUI, cruise operator Carnival and budget airline easyJet all weaker.
Carnival was also knocked lower by a downgrade to ‘sell’ at Berenberg.
IG market analyst Joshua Mahony said travel stocks were being hit amid growing fears over the potential impact of the more concerning Bristol Covid-19 variant.
“Recent value stock gains have been built on the notion that the vaccination programme and reopening process is linear and predictable by nature, yet strains in South Africa and now Bristol highlight the potential to derail that presumption,” he said.
Elsewhere, Watches of Switzerland was on the back foot after a downgrade to ‘neutral’ at Goldman Sachs.
On the upside, Vivo Energy gained after saying it expects full-year adjusted earnings before interest, tax, depreciation and amortisation to be above the top end of the range of consensus expectations of between $331m and $354m.
Market Movers
FTSE 100 (UKX) 6,528.66 0.00%
FTSE 250 (MCX) 20,969.87 -0.23%
techMARK (TASX) 4,123.92 0.08%
FTSE 100 – Risers
Severn Trent (SVT) 2,343.00p 1.87%
Informa (INF) 517.60p 1.81%
St James’s Place (STJ) 1,198.50p 1.65%
Rentokil Initial (RTO) 520.60p 1.56%
DCC (DCC) 5,788.00p 1.40%
AstraZeneca (AZN) 7,346.00p 1.38%
Pearson (PSON) 758.40p 1.31%
Prudential (PRU) 1,306.00p 1.24%
Relx plc (REL) 1,847.50p 1.23%
Auto Trader Group (AUTO) 588.00p 1.17%
FTSE 100 – Fallers
Fresnillo (FRES) 1,001.50p -2.81%
International Consolidated Airlines Group SA (CDI) (IAG) 145.50p -2.28%
Glencore (GLEN) 264.10p -2.00%
NATWEST GROUP PLC ORD 100P (NWG) 168.85p -1.95%
Antofagasta (ANTO) 1,512.00p -1.82%
Polymetal International (POLY) 1,577.00p -1.81%
Tesco (TSCO) 240.70p -1.55%
Evraz (EVR) 500.20p -1.50%
Rio Tinto (RIO) 5,830.00p -1.39%
Kingfisher (KGF) 273.30p -1.34%
FTSE 250 – Risers
Vivo Energy (VVO) 82.70p 5.75%
Beazley (BEZ) 363.80p 2.83%
SSP Group (SSPG) 287.60p 2.71%
Marks & Spencer Group (MKS) 132.70p 2.51%
Liontrust Asset Management (LIO) 1,250.00p 2.46%
Biffa (BIFF) 249.00p 2.05%
Greggs (GRG) 2,084.00p 1.96%
Diploma (DPLM) 2,500.00p 1.87%
Investec (INVP) 206.90p 1.82%
Trainline (TRN) 466.00p 1.79%
FTSE 250 – Fallers
TUI AG Reg Shs (DI) (TUI) 309.10p -4.21%
Carnival (CCL) 1,248.50p -4.00%
easyJet (EZJ) 732.20p -3.99%
Watches of Switzerland Group (WOSG) 623.00p -2.66%
Oxford Biomedica (OXB) 1,024.00p -2.48%
WH Smith (SMWH) 1,536.00p -2.48%
Gamesys Group (GYS) 1,342.00p -2.47%
BMO Commercial Property Trust Limited (BCPT) 71.70p -2.18%
Petropavlovsk (POG) 27.35p -2.15%
Hochschild Mining (HOC) 216.40p -2.08%
