As-it-happened: FTSE dips as UK on brink of double-dip recession after GDP fall

FTSE slides on downbeat GDP figures

Shares slid for the fourth time this week on Friday as London’s top companies gave back half the gains they made in the opening week of 2021.

The stock markets were on fire last week as traders kicked off the year with a bang, but since waking up on Monday they have been in a more sombre mood.

In the past five days of trading, London’s FTSE 100 index has lost 137 points, nearly half of everything that it gained during one of its best ever starts to a year.

On Friday, the index lost 66.25 points, a nearly 1% decrease, and settled at 6,735.71.

Investors had been eagerly anticipating the plans of incoming US President Joe Biden on Thursday, and had sent shares up on the day.

But events overtook Mr Biden’s plans to send 1,400 dollar (£1,000) stimulus cheques to many Americans as part of a 1.9 trillion dollar Covid-19 stimulus plan.

“Conscious of the difficulties in getting anything done in the American political system, let alone when you are trying to impeach the outgoing president, investors greeted Joe Biden’s 1.9 trillion dollar Covid-19 stimulus plan with a ‘we’ll see’,” said Spreadex analyst Connor Campbell.

“Unfortunately that meant attention lingered on a rough couple of days for US data. Following on from Thursday’s sky high jobless claims figure – the worst since the end of August, and perilously close to the one million mark – investors had to deal with a pair of glum December retail sales readings suggestive of a tough Christmas across the country.”

The UK had gloomy economic news of its own, as gross domestic product (GDP) was reported dropping 2.6% month-on-month in November, putting the economy back on track for a recession.

But that was unlikely to be a factor in Europe, where the French and German markets struggled more than the FTSE. The Cac and the Dax both dropped 1.4%.

Across the Atlantic, the New York-based S&P 500 and Dow Jones dropped 0.6% and 0.5% respectively.

After a Supreme Court ruling which will force insurers to pay out claims to some businesses that had to shut during Covid-19, shares in the companies were a mixed bag.

After originally dropping 6% on the news, Hiscox ended the day up 3.3%. Aviva’s shares dropped 0.6%, Admiral Group lost 1%, Phoenix Group closed down 1.9%, and Prudential and RSA Insurance ended down 0.1%.

Petrofac fared much worse. The oilfield company’s shares closed down 26.6% after it was revealed on Thursday night that a former senior executive had pleaded guilty in a bribery case.

Although it may have seemed good news that the Serious Fraud Office had dropped an investigation into possible corruption at British American Tobacco, investors did not celebrate. Shares closed down 0.4%.

And finally, the Gym Group ended the day down 3.2% after saying that sales had almost halved in 2020.

The biggest risers on the FTSE 100 were Aveva, up 248p to 3805p, GlaxoSmithKline, up 20.2p to 1413.6p, Pennon Group, up 12.4p to 964.8p, Unilever, up 40p to 4394p, and Persimmon, up 20p to 2690p.

The biggest fallers on the FTSE 100 were Anglo American, down 149.5p to 2663.5p, Just Eat, down 408p to 7872p, DS Smith, down 19p to 386.5p, Antofagasta, down 57.5p to 1514.5p, and Kingfisher, down 10.2p to 269.4p.

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