London open: Stocks in the red; UK narrowly avoids technical recession

(Sharecast News) - London stocks fell in early trade on Friday as data showed that the UK narrowly avoided a technical recession at the end of last year. At 0825 GMT, the FTSE 100 was down 0.4% at 7,876.67.

Figures released earlier by the Office for National Statistics showed that GDP fell 0.5% in December following growth of 0.1% in November and 0.55% in October. December's print was dragged down by a 0.8% decline in the services sector, which recorded falls in health, education, transport and storage, arts and entertainment.

However, it was not enough to push the quarterly data into negative territory, and GDP was 0.0% in the three months to December, following a decline of 0.3% in November.

The definition of a recession is two consecutive quarters of contraction.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "While the absence of an official label will be seen as a victory, there's an argument to say the can has simply been kicked further down the road.

"The ramifications for consumers are also tough: around 7m households are still expected to struggle to pay energy and food bills, technical recession or not."

Capital Economics said the UK avoided a recession "by the skin of its teeth" and that drags from high inflation and high interest rates will trigger a recession this year.

"We estimate that only one third of the drag from higher rates has been felt so far," said chief UK economist Paul Dales.

Investors were also mulling data released in China by the National Bureau of Statistics, which showed that consumer price inflation ticked up January as the country reopened after more than two years of Covid restrictions.

CPI rose 2.1% on the year in January, up from 1.8% in December and in line with expectations, as China celebrated the lunar new year.

Meanwhile, the producer price index fell 0.8% year-over-year in January following a 0.7% decline the month before. Analysts had been expecting a 0.5% drop.

In equity markets, Standard Chartered tumbled after First Abu Dhabi Bank reiterated that it was not evaluating a possible offer for the bank. Shares surged on Thursday after Bloomberg reported that FAB was pressing ahead with a potential offer for the bank, at between $30bn and $35bn.

JD Sports was also under pressure as Adidas slid 10% after it said operating losses could hit €700m this year due to the Yeezy fallout.

Abrdn was knocked lower by a downgrade to 'reduce' at HSBC.

Polymer products maker Victrex lost ground as it held full-year guidance but said volumes had been softer during the first quarter, with ongoing weakness in several of its end markets.

Saga gained after confirming it is in exclusive discussions with Australia's Open Insurance Technologies over the potential sale of its underwriting business, Acromas Insurance Company limited.

Market Movers

FTSE 100 (UKX) 7,876.67 -0.44% FTSE 250 (MCX) 20,216.27 -0.30% techMARK (TASX) 4,578.81 0.50%

FTSE 100 - Risers

Centrica (CNA) 98.76p 1.38% Entain (ENT) 1,365.50p 1.30% British American Tobacco (BATS) 3,052.50p 1.14% BAE Systems (BA.) 849.60p 0.76% Vodafone Group (VOD) 91.89p 0.68% Imperial Brands (IMB) 2,016.00p 0.60% Unilever (ULVR) 4,132.50p 0.57% Haleon (HLN) 329.20p 0.47% Pershing Square Holdings Ltd NPV (PSH) 2,960.00p 0.34% Relx plc (REL) 2,424.00p 0.33%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 175.85p -3.25% Abrdn (ABDN) 209.70p -2.56% Smurfit Kappa Group (CDI) (SKG) 3,281.00p -2.53% International Consolidated Airlines Group SA (CDI) (IAG) 164.48p -2.29% Glencore (GLEN) 516.20p -1.97% M&G (MNG) 199.85p -1.89% Barclays (BARC) 186.28p -1.75% Ocado Group (OCDO) 705.00p -1.54% Anglo American (AAL) 3,291.50p -1.53% SEGRO (SGRO) 835.00p -1.44%

FTSE 250 - Risers

Oxford Instruments (OXIG) 2,565.00p 7.32% 4Imprint Group (FOUR) 4,790.00p 3.46% Aston Martin Lagonda Global Holdings (AML) 186.80p 2.36% Dr. Martens (DOCS) 159.50p 2.24% Mitchells & Butlers (MAB) 168.50p 1.51% QinetiQ Group (QQ.) 344.00p 1.47% Babcock International Group (BAB) 310.00p 1.44% Senior (SNR) 158.40p 1.15% JPMorgan Emerging Markets Inv Trust (JMG) 119.80p 1.01% Tate & Lyle (TATE) 802.80p 0.90%

FTSE 250 - Fallers

CMC Markets (CMCX) 235.00p -4.28% Victrex plc (VCT) 1,834.00p -2.34% Ferrexpo (FXPO) 135.00p -2.24% Carnival (CCL) 848.00p -2.15% IntegraFin Holding (IHP) 304.20p -2.12% Synthomer (SYNT) 157.90p -2.11% Morgan Advanced Materials (MGAM) 302.50p -2.10% Telecom Plus (TEP) 1,944.00p -1.92% Hill and Smith (HILS) 1,342.00p -1.90% IP Group (IPO) 65.00p -1.89%