FTSE 100 on course for monthly decline as record GDP drop confirmed
The FTSE 100 put in a shaky performance today following confirmation that the UK economy suffered a record drop in output in the second quarter of 2020.
The blue-chip index opened the session lower, before climbing into the green and then reversing its gains.
The FTSE 100 had flipped positive by lunchtime, and was sitting 0.13 per cent up by mid-afternoon at 5,905.22.
Read more: UK economy collapsed nearly 20 per cent in second quarter
Meanwhile, new data confirmed that Britain’s economy shrank by a record 19.8 per cent in the second quarter when Covid-19 lockdown measures were in force, slightly less than the initial estimate of a 20.4 per cent slump.
Housebuilders Barratt, Taylor Wimpey and Persimmon were among the biggest gainers after the Nationwide House Price Index showed a five per cent increase year-on-year.
Shares in Royal Dutch Shell were flat after the oil major announced plans to cut more than 10 per cent of its workforce in a bid to shift its business to low-carbon energy.
“Shell probably had little choice but to act given the scale of the volatility in oil markets and the seismic changes happening in the industry,” said AJ Bell investment director Russ Mould. “Time will tell if it acted in the right way.”
The mid-cap FTSE 250 had risen 0.56 per cent by mid-afternoon to 17,269.34.
London’s blue chip index is on course for its second monthly decline in six months as economic uncertainty triggered by the coronavirus pandemic and Brexit helped subdue risk appetite.
Global markets also tracked lower on Wednesday following the chaotic first US presidential debate, which turned investors cautious.
President Donald Trump and challenger Joe Biden clashed over Trump’s leadership during the pandemic, the economy, and the integrity of November’s election result.
Asian markets, which are heading for their worst month since March, either deepened losses or pulled back from recent highs made after data showed China’s economic recovery remains on track.
The Shanghai Composite dipped 0.2 per cent, while in Japan the Nikkei shed 1.5 per cent. The Hang Seng bucked the trend, adding 0.91 per cent.
“It is clear that until rising uncertainties over U.S. elections, Brexit and Covid-19 are addressed in a more definite manner and markets see more positive forward looking data, investors are going to stay away from risk assets,” said Andrea Cicione, a strategist at T.S. Lombard.