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London close: FTSE lower as UK, US growth in Q1 disappoints, sterling up

By Andrew Schonberg

Date: Friday 28 Apr 2017

London close: FTSE lower as UK, US growth in Q1 disappoints, sterling up

(ShareCast News) - Stocks in London drifted to a lower close on Friday as a rise in sterling weighed on blue chips and both UK and US preliminary economic growth data disappointed investors on both sides of the Atlantic.
The FTSE 100 closed down 0.46% to 7,203.94, and the FTSE 250 finished down 0.11% to 19,615.36. April's loss of 1.6% for the top flight index was its biggest since November 2016.

In parallel, share indices in Europe and on Wall St were mixed.

"Markets were left a little unsure which way to turn after an upturn in corporate profits was met with data showing decelerating economic growth," said London Capital Group's Jasper Lawler.

Official figures showed the UK economy slowed significantly in first-quarter 2017. GDP growth was 0.3% in the first three months of the year, missing expectations for 0.4% growth and slower than the 0.7% growth seen in the final quarter of last year.

In the US, GDP expanded 0.7% in the first quarter of 2017, preliminary official data showed. That was wide of the 1.2% growth that economists had expected and less than the 2.1% rise seen over the previous quarter.

CMC Markets UK's Michael Hewson said stocks were limping into the long weekend as the transatlantic GDP data fell short of expectations.

"It's turned out to be a decent month for European markets in the wake of this week's Macron bounce, with strong gains across the board," said chief market analyst Hewson.

However, after Monday's surge stocks had really struggled for direction.

"The under-performing FTSE 100 has not only had a disappointing week, it's also had a disappointing month, giving up all of its March gains in the process, as a rebound in the pound, weak basic resources, and some weakness in the banks weigh on the index."

IG chief market analyst Chris Beauchamp said the week had ended on a cautious note as both the UK and US economic growth figures disappointed.

"What started off so well for stock markets has turned into a week of mixed fortunes, despite further evidence from earnings season that US firms are doing well."

"It wouldn't be a Friday afternoon without an outlandish rumour, and the 2% bounce in Morrisons provides that in spades. Ostensibly Amazon is going to buy up the northern supermarket," said Beauchamp.

"This seems like an unnecessary amount of effort for Amazon, which has crushed far larger US firms and looks set to remake the UK grocery market with Amazon fresh."

Looking more closely at the FTSE 100, banks, financials, utilities and property were among the bigger fallers, while miners and oil majors performed comparatively well.

In corporate news, Barclays fell heavily despite saying profits more than doubled in the first quarter, the bank also announcing it was booking a one-off £884m charge on its Africa business.

Fellow lender Royal Bank of Scotland gained as it posted its first quarterly profit since 2015, with total income and margins improving. Net profit was £259m, from a £968m loss.

Old Mutual nudged higher as it said its wealth management saw 6% growth in first quarter funds under management and it announced the appointment of Tim Tookey as its chief financial officer.

Market Movers

FTSE 100 (UKX) 7,203.94 -0.46%
FTSE 250 (MCX) 19,615.36 -0.11%
techMARK (TASX) 3,474.67 -0.18%

FTSE 100 - Risers

Royal Bank of Scotland Group (RBS) 265.40p 4.74%
Antofagasta (ANTO) 838.00p 2.38%
Morrison (Wm) Supermarkets (MRW) 239.90p 2.35%
International Consolidated Airlines Group SA (CDI) (IAG) 560.00p 2.10%
BHP Billiton (BLT) 1,175.00p 1.86%
Anglo American (AAL) 1,106.50p 1.70%
Carnival (CCL) 4,766.00p 1.66%
Kingfisher (KGF) 341.30p 1.64%
Randgold Resources Ltd. (RRS) 6,805.00p 1.57%
Micro Focus International (MCRO) 2,588.00p 1.45%

FTSE 100 - Fallers

Barclays (BARC) 212.05p -5.31%
Mediclinic International (MDC) 821.00p -4.42%
Royal Mail (RMG) 402.50p -3.92%
Standard Chartered (STAN) 723.30p -2.71%
Hargreaves Lansdown (HL.) 1,378.00p -1.99%
WPP (WPP) 1,653.00p -1.61%
DCC (DCC) 7,130.00p -1.59%
Vodafone Group (VOD) 199.05p -1.53%
Hikma Pharmaceuticals (HIK) 1,937.00p -1.48%
Barratt Developments (BDEV) 579.50p -1.45%

FTSE 250 - Risers

Drax Group (DRX) 323.00p 6.28%
Renishaw (RSW) 3,415.00p 5.63%
Ferrexpo (FXPO) 158.10p 4.22%
Evraz (EVR) 216.60p 4.13%
Vedanta Resources (VED) 691.50p 3.83%
Aldermore Group (ALD) 258.40p 3.36%
Entertainment One Limited (ETO) 246.30p 2.84%
Balfour Beatty (BBY) 291.80p 2.71%
Weir Group (WEIR) 1,991.00p 2.37%
Kaz Minerals (KAZ) 503.50p 2.32%

FTSE 250 - Fallers

Virgin Money Holdings (UK) (VM.) 317.30p -4.63%
Allied Minds (ALM) 157.20p -3.81%
McCarthy & Stone (MCS) 184.40p -3.35%
Berendsen (BRSN) 839.00p -3.29%
Stagecoach Group (SGC) 203.50p -2.72%
Kennedy Wilson Europe Real Estate (KWE) 1,039.00p -2.26%
Galliford Try (GFRD) 1,434.00p -2.25%
Derwent London (DLN) 2,944.00p -2.10%
Auto Trader Group (AUTO) 401.10p -2.08%
Rotork (ROR) 245.90p -1.99%

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