London pre-open: Stocks to slide after US losses; GDP in focus
By Michele Maatouk
Date: Thursday 12 May 2022
(Sharecast News) - London stocks were set to slide at the open on Thursday following heavy losses on Wall Street after the release of US inflation data.
The FTSE 100 was called to open 102 points lower at 7,245 as investors mulled the latest UK GDP figures from the Office for National Statistics, which showed the economy contracted by 0.1% in March following no growth the month before, amid rising prices.
During the first three months of the year, growth slowed to 0.8% from 1.3% in the previous quarter.
Darren Morgan, ONS director of Economic Statistics, said: "The UK economy grew for the fourth consecutive quarter and is now clearly above pre-pandemic levels, although growth in the latest three months was the lowest for a year.
"This was driven by growth in a number of service sectors as the economy continued to recover from Covid-19 effects, including hospitality, transport, employment agencies and travel agencies. There was also strong growth in IT.
"There were, though, some downward effects from other services, including retailing, wholesaling and car sales and also health, due to continuing decreases in the Test and Trace service and vaccination programmes.
"Our latest monthly estimates show GDP fell a little in March, with drops in both services and in production. Construction, though, saw a strong month thanks partly to repair work after the February storms."
In corporate news, retailer JD Sports said that like-for-like sales were more than 5% higher year-on-year, driven by both the "strength and breadth" of its brand relationships and category offerings.
The FTSE 100 firm believes that headline pre-tax profits for the year ending 28 January 2023 will at least be equal to that for the year ended 29 January 2022, which it expects to be approximately £940.0m.
UK telecoms and broadcasting group BT reported a small rise in adjusted annual core earnings after revenue fell 2%.
The company posted adjusted earnings of £7.5bn, up 2% as revenue fell by 2% to £20.84bn. It also unveiled a new 50-50 joint venture with Warner Bros. Discovery under which it would transfer the operating businesses of BT Sport to the US broadcaster.
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