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.
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%.
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.