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12 Feb 2021 | 15:52

London close: Stocks turn green after latest GDP data

(Sharecast News) - London stocks closed in positive territory on Friday, as investors mulled the latest UK GDP data, although travel and leisure plays remained under the cosh. The FTSE 100 ended the session up 0.94% at 6,589.79, and the FTSE 250 was ahead 0.09% at 21,037.47.

Sterling was stronger against its major trading pairs too, last 0.3% higher on the dollar at $1.3858, and gaining 0.32% against the euro to €1.1427.

"Even though things finished on a relatively positive note last year, the Bank of England has already warned the economy could contract by approximately 4% in the first quarter of 2021," said CMC Markets analyst David Madden.

"In the same update, the BoE predicted there will be a strong economic rebound this year as restrictions will be eased as the UK's vaccination distribution process builds on its already solid success."

Figures out earlier from the Office for National Statistics showed the economy contracted by a record 9.9% last year, as the coronavirus pandemic took its toll, although the UK managed to avoid a double-dip recession.

In the fourth quarter, GDP rose 1%, following 16.1% growth in the third quarter.

"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," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

"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."

The economy was still just about 10% smaller than it was before the pandemic hit, Streeter noted.

"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 largely in the red, with InterContinental Hotels down 0.61%, pub group Mitchells & Butlers off 2.23%, holiday company TUI 1.77% weaker, and cruise operator Carnival sinking 2.88%.

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 down 2.19% after a downgrade to 'neutral' at Goldman Sachs.

On the upside, Vivo Energy gained 6.49% 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) 6,589.79 0.94% FTSE 250 (MCX) 21,037.47 0.09% techMARK (TASX) 4,145.20 0.59%

FTSE 100 - Risers

St James's Place (STJ) 1,225.00p 3.90% AstraZeneca (AZN) 7,471.00p 3.11% DCC (DCC) 5,882.00p 3.05% Prudential (PRU) 1,333.00p 2.95% Hikma Pharmaceuticals (HIK) 2,361.00p 2.83% Smith (DS) (SMDS) 392.00p 2.75% Just Eat Takeaway.Com N.V. (CDI) (JET) 7,940.00p 2.51% Rentokil Initial (RTO) 525.20p 2.46% Ocado Group (OCDO) 2,611.00p 2.38% Relx plc (REL) 1,866.50p 2.27%

FTSE 100 - Fallers

Kingfisher (KGF) 270.90p -2.20% SSE (SSE) 1,422.00p -1.86% Tesco (TSCO) 240.60p -1.60% Whitbread (WTB) 3,207.00p -1.17% JD Sports Fashion (JD.) 804.20p -0.98% Fresnillo (FRES) 1,020.50p -0.97% Avast (AVST) 503.00p -0.79% InterContinental Hotels Group (IHG) 4,895.00p -0.61% Diageo (DGE) 3,009.00p -0.59% Land Securities Group (LAND) 606.30p -0.59%

FTSE 250 - Risers

SSP Group (SSPG) 296.60p 6.71% Vivo Energy (VVO) 82.00p 5.75% Liontrust Asset Management (LIO) 1,265.00p 4.10% Trainline (TRN) 474.20p 3.58% Hiscox Limited (DI) (HSX) 981.80p 3.43% Diploma (DPLM) 2,526.00p 3.26% Investec (INVP) 209.60p 3.15% Wizz Air Holdings (WIZZ) 4,810.00p 2.95% Ferrexpo (FXPO) 320.20p 2.63% Just Eat Takeaway.Com N.V. (CDI) (JET) 7,940.00p 2.51%

FTSE 250 - Fallers

Carnival (CCL) 1,263.00p -2.88% ITV (ITV) 109.00p -2.84% Rank Group (RNK) 123.00p -2.84% Spirent Communications (SPT) 253.50p -2.69% Babcock International Group (BAB) 240.00p -2.61% Mitchells & Butlers (MAB) 325.00p -2.23% Watches of Switzerland Group (WOSG) 627.00p -2.19% Aggreko (AGK) 852.00p -2.19% Polypipe Group (PLP) 556.00p -2.11% Drax Group (DRX) 393.80p -2.04%
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