London close: Stocks end week on a high after decent GDP data

(Sharecast News) - London stocks closed in positive territory on Friday, as investors digested encouraging UK GDP data.
The FTSE 100 ended the session up 0.65% at 7,134.06, and the FTSE 250 was ahead 0.55% at 22,734.13.

Sterling ended the week in a mixed state, meanwhile, last trading 0.49% weaker against the dollar at $1.4108, while it strengthened 0.14% on the euro to €1.1662.

"It's been a decent end to the week for markets in Europe, with the FTSE 100 hitting a one-month high after edging above 7,120 for the first time since 10 May, while the FTSE 250 us also doing well after experiencing three days of losses," said CMC Markets chief market analyst Michael Hewson.

"It's certainly helped that today's UK economic data showed the economy grew by 2.3% in April, with services activity driving most of the improvement.

"The more positive tone has also manifested itself with another record high for the Stoxx 600, as markets across Europe finish the week very much on the front foot."

Hewson noted that some sectors had lagged, notably financials, which were seeing a "little bit of underperformance" on the back of softer bond yields, with the UK gilt trading down at a three-month low of 0.69% before rebounding.

"Other underperformers have been in the travel and leisure sector, as delays to reopening prompted British Airways to put some of their staff back on furlough, while the likes of Cineworld and Wagamama's owner Restaurant Group are down again for the second day in succession as fears grow that next week's announcement of a wholescale 21 June unlock becomes less likely."

In economic news, figures released earlier by the Office for National Statistics showed the economy grew in April at its fastest monthly rate since July 2020 as lockdown restrictions eased.

The economy expanded by 2.3% following 2.1% growth in March, and against expectations for 2.5% growth.

On the year, GDP was up 27.6%, although the UK economy was still 3.7% smaller than it was in February 2020, before the pandemic and related restrictions kicked in.

Retail sales volumes grew 9.2% on the month in April after all non-essential stores reopened from 12 April in England and Wales and from 26 April in Scotland.

Education output was the second main contributor to services growth, according to the ONS, up 11.2% as more pupils returned to onsite lessons in April.

"Strong growth in retail spending, increased car and caravan purchases, schools being open for the full month and the beginning of the reopening of hospitality all boosted the economy in April," said ONS deputy national statistician for economic statistics, Jonathan Athow.

Sophie Griffiths, market analyst at Oanda, added that a successful vaccination programme had helped the economy bounce back from its deepest contraction in 300 years last year.

"With households expected to splurge the savings amassed over that time, and businesses gearing up for additional investment, the outlook is certainly bright.

"There is, of course, the complication of rising cases of Covid-19, which could delay the final stage of reopening.

"For now, a return to pre-Covid output in the fourth quarter looks to be very much on track."

In equity markets, asset management services provider Sanne Group jumped 8.81%, after it said it was in talks with Cinven with the buyout firm making a new 875p-a-share offer for the company.

Sanne had previously rejected a £1.35bn proposal as too low, with Cinven now having until 9 July to make a firm offer.

On the downside, Domino's Pizza Group lost 2.26% after it emerged that chief financial officer Neil Smith was leaving the group to become finance director of pub and hotel company Fuller, Smith & Turner.

Equipment rental firm Ashtead Group was knocked 0.87% lower by a downgrade to 'hold' from 'buy' at Deutsche Bank.

Market Movers

FTSE 100 (UKX) 7,134.06 0.65%
FTSE 250 (MCX) 22,734.13 0.55%
techMARK (TASX) 4,449.64 0.47%

FTSE 100 - Risers

Melrose Industries (MRO) 168.85p 3.02%
Intermediate Capital Group (ICP) 2,292.00p 2.97%
Glencore (GLEN) 329.10p 2.88%
Smurfit Kappa Group (CDI) (SKG) 3,895.00p 2.47%
Evraz (EVR) 638.00p 2.37%
Intertek Group (ITRK) 5,422.00p 2.34%
3i Group (III) 1,247.00p 2.26%
Bunzl (BNZL) 2,308.00p 2.21%
Standard Life Aberdeen (SLA) 284.70p 2.19%
Entain (ENT) 1,796.00p 2.18%

FTSE 100 - Fallers

Informa (INF) 543.20p -2.62%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,509.00p -2.02%
BT Group (BT.A) 191.80p -1.72%
Imperial Brands (IMB) 1,608.50p -1.02%
Ashtead Group (AHT) 5,024.00p -0.87%
Sainsbury (J) (SBRY) 252.30p -0.79%
Standard Chartered (STAN) 493.80p -0.74%
Coca-Cola HBC AG (CDI) (CCH) 2,634.00p -0.72%
Diageo (DGE) 3,434.00p -0.67%
Johnson Matthey (JMAT) 3,136.00p -0.54%

FTSE 250 - Risers

Sanne Group (SNN) 845.00p 8.81%
Trainline (TRN) 271.20p 5.44%
Chrysalis Investments Limited NPV (CHRY) 222.00p 5.24%
Hill & Smith Holdings (HILS) 1,486.00p 4.21%
Oxford Biomedica (OXB) 1,246.00p 3.15%
Kainos Group (KNOS) 1,419.00p 3.05%
Vietnam Enterprise Investments (DI) (VEIL) 690.00p 2.99%
Ferrexpo (FXPO) 462.40p 2.66%
Beazley (BEZ) 319.80p 2.63%
AO World (AO.) 250.60p 2.62%

FTSE 250 - Fallers

Workspace Group (WKP) 866.00p -3.46%
Volution Group (FAN) 394.00p -3.19%
Restaurant Group (RTN) 129.00p -3.15%
Wood Group (John) (WG.) 247.00p -2.68%
Domino's Pizza Group (DOM) 381.40p -2.26%
Just Eat Takeaway.Com N.V. (CDI) (JET) 6,509.00p -2.02%
GCP Infrastructure Investments Ltd (GCP) 97.00p -2.02%
CMC Markets (CMCX) 485.50p -2.01%
CLS Holdings (CLI) 250.00p -1.96%
Unite Group (UTG) 1,152.00p -1.96%