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* UK economy shrinks by record 20.4% in April
* London stock indexes log first weekly decline in four
* Tech firm IQE jumps, expects to return to profit in first
half
* FTSE 100 up 0.5%, FTSE 250 rises 0.6%
(Adds comments, updates prices to close)
By Shreyashi Sanyal
June 12 (Reuters) - UK stocks snapped a four-day losing
streak on Friday as battered cyclical shares rose, but overall
gains were slim as sentiment was subdued after the country
reported a record economic contraction in April.
For the week as a whole, benchmark indexes marked their
worst weekly drop in about three months, following heavy losses
in recent days as the impact of the coronavirus hit equity
markets.
Cyclical stocks including banks, insurers
and oil & gas, bounced back on Friday
after being at the centre of a heavy sell-off in the previous
session.
The benchmark FTSE 100 index rose 0.5% and the
domestically focused mid-cap index climbed 0.6%.
A tight lockdown to contain the spread of COVID-19 shrunk
Britain's economy by 20.4% in April from March and 24.5% from a
year ago, data showed. Both the readings were below the already
weak forecasts in a Reuters poll of economists.
"Investors are not stupid, they know April was arguably the
height of the lockdown. The unprecedented nature of the fall in
economic activity just mirrored the unprecedented act of
effectively shutting down a modern economy," said Russ Mould,
investment director at AJ Bell.
The FTSE 100 fell 5.8% on the week, while the FTSE mid-250
index dropped 6.4% on renewed concerns about the COVID-19
pandemic after the United States said growth in new cases
accelerated recently.
"Rightly the focus is on the shape and timing of any
recovery and simmering concerns about a second wave in the
pandemic are far more relevant than just how terrible
backward-facing data will look," Mould said.
Focus will now move to the Bank of England, which is
expected to announce a fresh increase of at least 100 billion
pounds ($126 billion) in its bond-buying firepower next week.
Among share outperforming on Friday, Games Workshop Group
jumped 8.7% after the fantasy miniatures maker raised
its full-year sales forecast.
Technology company IQE, which makes semiconductor
wafers for chips used in Apple products, surged 23%
after forecasting a 27% jump in half-yearly revenue and said it
expects to return to profitability.
(Reporting by Shashank Nayar and Shreyashi Sanyal in Bengaluru;
editing by Uttaresh.V and Susan Fenton)
