LONDON MARKET CLOSE: Stocks slip on discouraging GDP data

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Stocks in London fell back into the red on Thursday during a volatile week of trading, as news of slowing domestic growth sparked recession fears, while inflation and tightening monetary policy remain at the top of investors' minds.

The FTSE 100 index closed down 114.32 points, or 1.6%, at 7,233.34. The FTSE 250 ended down 116,27 points, or 0.9%, at 19,480.88, and the AIM All-Share closed down 14.83 points.

The Cboe UK 100 ended down 1.4% at 721.85, the Cboe UK 250 closed down 0.5% at 17,227.50, and the Cboe Small Companies ended down 1.2% at 14,459.22.

In European equities, the CAC 40 in Paris stock index ended down 1.0%, while the DAX 40 in Frankfurt closed down 0.6%.

“The FTSE 100 tumbled after weak UK GDP numbers and higher than expected US inflation figures stoked fears about a global economic slowdown. Investors were quick to dump commodity producers on the grounds that demand could fall in the coming months,” said AJ Bell's Russ Mould.

In the FTSE 100, JD Sports Fashion ended the best performer, up 6.6%, after the athletic apparel retailer said sales grew in the early weeks of its financial year, shaking off supply chain pressures.

In the 14 weeks to May 7, JD Sports said like-for-like sales rose 5% year-on-year.

In addition, JD Sports lifted profit guidance for its financial year that ended on January 29. It expects headline pretax profit, before exceptional items, to be £940 million. This guidance is raised from ‘at least £900 million’ previously. It would be more than double the £421.3 million achieved in financial 2021.

For the year ending January 28, 2023, JD Sports expects headline pretax profit to be ‘at least equal’ to the financial 2022 result.

Coca-Cola HBC was just behind, up 5.5%, after the soft drinks bottler said revenue surged in the first quarter of 2022.

In the three months to March 31, the bottling partner of Coca-Cola Co reported group revenue growth of 31% to €1.77 billion from €1.35 billion, with established markets up 20%, developing up 40%, and emerging up 36%.

Group volume was up 23% in the first quarter to 605.5 million cases from 490.8 million the year prior.

Ferguson ended up 2.5% as its primary stock market listing moves to New York with effect Thursday, with the plumbing and heating products supplier exiting the FTSE 100 in London as a result.

Ferguson will remain listed on London's Main Market, however, but through a standard listing and not a premium listing. Replacing Ferguson in the FTSE 100 is Harbour Energy.

BT closed up 1.1% after the telecommunications firm reported an annual profit climb and has agreed to a sports broadcasting joint venture with Warner Bros Discovery, having entered talks three months ago.

The former state telecom monopoly also reported its Openreach broadband infrastructure arm ‘continues to build like fury’.

BT backed its yearly guidance but noted a tough economic outlook. In the year ended March 31, revenue declined 2.3% to £20.85 billion from £21.33 billion. Pretax profit, however, rose 8.8% to £1.96 billion from £1.80 billion. Operating costs were 4.2% lower at £17.97 billion. Adjusted revenue was also £20.85 billion, though down 2.5% from £21.37 billion. The figure fell just short of company-compiled consensus of £20.88 billion.

At the other end of the large-caps, precious metal miners Fresnillo and Endeavor Mining ended the worst performers, down 8.8% and 7.0% respectively, tracking spot gold prices lower. Midcap peer Hochschild Mining was the biggest faller, down 9.3%.

Gold stood at $1,838.71 an ounce at the London equities close, lower against $1,849.37 late Wednesday.

BP shed 3.8% after the stock went ex-dividend meaning new buyers no longer qualify for the latest payout.

Hargreaves Lansdown lost 6.7% after the fund supermarket ported a weaker performance for its financial year to date, with revenue and assets under administration experiencing a fall due to adverse market movements.

For the four months ended April 30, the group's revenue was in line with company expectations, down 16% to £196.5 million from £233.3 million a year before, as a net interest margin increase was more than offset by the drop in assets.

Net new business for the four-month period was £2.5 billion, and was £4.8 billion for the ten-month period. Net new clients for the four months plunged 67% year-on-year to 42,000 from 126,000, taking total active clients to 1.73 million.

For Hargreaves Lansdown's financial year to date, covering the 10 months to April 30, revenue was down 8.4% to £487.6 million from £532.7 million a year prior.

The pound slipped to its lowest levels since May 2020, quoted at $1.2229 at the London equities close, down from $1.2323 at the close Wednesday, amid heightened risk of a UK recession.

For the first quarter of 2022, UK gross domestic product is estimated to have increased 0.8% versus the immediately previous quarter, which is behind market consensus of 1.0% quarter-on-quarter expansion.

In the final quarter of 2021, the GDP grew by 1.0% on quarterly basis. Annually, GDP rose 8.7% in the first quarter, but this too was behind market forecasts of 9.0% growth.

However, economic performance deteriorated during the course of the first three months of this year. Monthly estimates show that GDP rose by 0.7% in January, followed by no growth in February 2022 and a fall of 0.1% in March 2022.

The euro stood at $1.0417 at the European equities close, down from $1.0540. Against the yen, the dollar was trading at JP¥128.25, lower against JP¥130.23.

Stocks in New York were mostly higher at the London equities close following another sell-off on Wednesday. The DJIA was down 0.3%, the S&P 500 index up 0.3% and the Nasdaq Composite up 1.1%.

On Wall Street, Walt Disney Co fell 1.8% as the entertainment company, late Wednesday, reported lower profits but saw increases in subscribers to its Disney + streaming services and to its parks business.

On the subsequent conference call, Chief Financial Officer Christine McCarthy pointed to increased costs Disney faces and warned the company may have hurt its subscriber growth in the second half following its strong performance in the first half.

‘The first half came in better than expected, so that delta that we had initially anticipated may not be as large,’ McCarthy said. ‘But we still do expect an increase in the second half to exceed the first half.’

Brent oil was quoted at $108.55 a barrel at the equities close, up from $107.27 at the close Wednesday.

The economic events calendar on Friday has eurozone industrial production at 1000 BST and US import & export prices at 1330 BST.

The UK corporate calendar on Friday has interim results from accounting software provider Sage Group and a trading statement from power generation company ContourGlobal.

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