UK shares picked themselves up in early trade after a two-day plunge with leading stocks given a helping hand by a better than forecast first quarter GDP reading. The data showed the UK contracted by 1.5% in the lockdown-hit opening months to the year, compared to the 1.6% decline forecast.

A stronger sign of recovery was news that the economy actually grew 2.1% in March, instead of the 1.5% expected, as the country cautiously started to open up. That bolstered optimism about a sharp recovery from the pandemic-driven slump last year.

The GDP news saw the benchmark FTSE 100 jump 0.7% higher in early trading to within a whisker of the 7,000 mark (to 6,998.49), with mid-caps also doing well. The FTSE 250 rose 0.5% to 22,272.68.

ROBUST GROWTH FOR DRINKS FIRM

Leading the FTSE 100 higher was spirits maker Diageo (DGE), up 3.4% at £32.98, after it forecast organic operating profit growth to be at least 14% in its current fiscal year and restarted its share buyback urn programme.

Pharmaceutical services firm UDG Healthcare (UDG) jumped 21% to £10.20 after private-equity firm Clayton, Dubilier & Rice agreed to buy the FTSE 250 company for £2.6 billion.

Resources and industrials were also in demand with Glencore (GLEN) up 3% at 337.75p and mining peers Anglo American (AAL) and Rio Tinto (RIO) adding around 1.7% a piece.

Also heading higher is Spirax-Sarco Engineering (SPX), up nearly 3% to £118.85 after it said in its annual meeting statement that it had seen a positive performance in the four months to April.

Catering company Compass (CPG) drifted 0.5% to £15.22 as it struck a cautious tone to its own recovery. The company said its third quarter margins would improve sequentially, supported by cost cutting measures, after reporting a slight profit and revenue beat in the first half.

Perhaps reflecting fears that business may be dented as diners return to restaurants post-lockdown, deliveries platform Just Eat Takeaway (JET) was an early casualty, down 4% at £65.39, although Deliveroo (ROO) managed to add 2% to 254.5p, although still way below its 390p London listing debut price.

HUGE LOCKDOWN LOSS

Travel company TUI (TUI) shed 0.6% to £426 as it racked up a €1.50 billion first-half loss while the pandemic continued hammer the tourism sector.

TUI said it had a pipeline of 2.6 million customers booked for the summer 2021 season, with a re-opening portfolio focused on destinations such as Greece, Balearics and the Canaries.

Molten metal flow engineering group Vesuvius (VSVS) rose 1% to 585p after it guided for a full-year trading profit ‘moderately’ ahead of market expectations.

Vesuvius said the current consensus forecast for annual earnings before interest, tax and amortisation was £138 million, the company said in a trading update for its annual general meeting.

Landscape products group Marshalls (MSLH) rallied more than 5% to 761p, having upgraded its annual guidance, too, amid a 46% jump in year-to-date sales. Marshalls said it now expected trading for the full year through December to be ‘ahead of its previous expectations.’

Defence contractor Ultra Electronics (ULE) firmed 0.9% to £20.34 on reporting flat revenue growth so far in 2021. The company continued to forecast ‘another year of good progress.’

Bus and train group National Express (NEX) advanced 0.3% to 299.56p after it said it was continuing to post operating profits, thanks to cost cutting and a recent improvement in sales.

National Express’s revenue for the four months through April was down 16% year-on-year, though during the month of April it was up 50% year-on-year.

Inter-dealer broker TP ICAP (TCAP) added 0.9% to 222.35p despite its first-quarter revenue falling 12% as market volatility eased. However, TP ICAP said that compared to the same period back in 2019, before the pandemic hit, revenue was up 3% and constant currency revenue was up 6%.

Home builder Redrow (RDW) was broadly flat at 690.28p on news that it had appointed former Land Securities (LAND) executive Richard Akers as its new chairman.

Akers would replace John Tutte, who this year decided to retire having been in the position since April 2019 following the retirement of founder Steve Morgan.

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Issue Date: 12 May 2021