UK stocks were weak in opening trading on Friday as the mood of investors took a cautious turn at the end of a week marked by a general lack of direction.
Domestic-facing stocks came under particular pressure after the UK suffered its worst GDP slump in 300 years, according to some reports, shrinking a record 9.9% as coronavirus restrictions hit output, the Office for National Statistics (ONS) said.
The contraction in 2020 ‘was more than twice as much as the previous largest annual fall on record’, said ONS deputy national statistician Jonathan Athow.
The benchmark FTSE 100 barely moved in early trade, clawing a single point gains at 10am to 6,529.89. The FTSE 250 fell 0.36% to 20,941.37.
While the Britain’s economy held up better than expected in the final quarter of 2020, the outlook for the start of 2021 remains bleak with no indications of a lifting of lockdown restrictions likely until 22 February. Fourth quarter (Q4) GDP grew 1% after Q3 growth was revised.
‘Vaccines might get the economy roaring again, but only if the government has the bottle to end restrictions as quickly as possible’, said Neil Wilson of Markets.com.
The S&P 500 rose slightly on Thursday to eke out a fresh record high with the Nasdaq up 0.38%, and US markets will be closed on Monday for the Presidents’ Day holiday. Stock markets across Asia are closed for the lunar new year celebrations.
STOCKS ON THE MOVE
Holidays and airline operator Jet2 (JET2) raised £422 million by issuing new shares at a 9% discount to last night's closing price to help see it through the crisis. The company said the fundraise was 'significantly oversubscribed'.
Ascential (ASCL) nudged 0.2% ahead to 368p as the information and analytics company said it had sold its DeHavilland brand for £15 million to Bridgepoint. The sale concluded the disposal of Ascential's built environment and policy segment businesses.
Apax Global Alpha (APAX) was up 2.1% at 207.35p after announcing the acquisition of a majority stake in Herjavec Group, a managed security services provider and cyber operations company.
The Renewables Infrastructure Group (TRIG) slipped 0.3% at 128.19p on the news that it had acquired Gronhult, a 67.2 MW ready-to-build onshore wind farm located in the southwest of Sweden. The project is expected to become operational in the fourth quarter of 2022.
Vivo Energy (VVO) climbed 3.7% to 81.1p after the African-focused fuel retailer said it expected full-year adjusted EBITDA to be at the top end of market expectations after the ongoing recovery in its retail segment led to positive trading in the fourth quarter.
Plastics manufacturer Victrex (VCT) was up 0.1% at £22.7 as the company announced its first quarter 2021 was ‘slightly ahead’ of expectations after seeing improvements in some of its end markets including electronics.