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London open: Stocks flat ahead of GDP data; RBS, Barclays in focus
London stocks kicked off the final session of the week in a rather muted fashion as investors eyed the release of first-quarter economic growth figures for the UK and the US.
At 0830 BST, the FTSE 100 was flat at 7,235.49, while the pound was up 0.2% versus the dollar to 1.2929.
CMC Markets analyst Michael Hewson said: “Later this morning, we get the first iteration of UK Q1 GDP and this is expected to show that the UK economy slowed from the 0.7% seen in Q4 to 0.4%, with services in particular expected to be a little on the soft side, with index of services expected to reflect that. On an annualised basis the GDP numbers are expected to firm up a little from 1.9% to 2.2%.
“In the US it’s expected to be a similar story with a slowdown from Q4’s 2.1% to 1.2%, with personal consumption likely to show significant weakness from the strong showing of 3.5% in Q4.”
First-quarter UK GDP data is due at 0930 BST, while the figures for the US are scheduled for release at 1330 BST.
Investors were digesting data showing UK house prices have fallen for the second month in a row, with annual growth slowing to a near four-year low.
House prices fell 0.4% in April compared to March, according to an index produced by building society Nationwide.
In April house prices were 2.6% higher than in April last year, down from the 3.5% annual growth seen a month ago.
Meanwhile, GfK’s Consumer Confidence Index fell further into negative territory in April, dropping one point to -7 in April amid worries about rising inflation and flat wages.
In corporate news, Barclays fell despite saying profits more than doubled in the first three months of the year, as the bank also said it was booking a one-off £884m charge on its Africa business.
It was a cheerier picture for Royal Bank of Scotland, however, which rallied as it said it broke into the black in the first quarter of 2017, the first quarterly profit since 2015 as total income and margins both improved. The taxpayer-owned bank swung to a net profit of £259m in the first three months of 2017, up from a £968m loss a year ago and the £4.4bn loss in the fourth quarter of last year.
Actuator manufacturer and flow control company Rotork fell after it reported a rise in order intake and revenue for the first quarter and reiterated its expectations for the full year.
Old Mutual was little changed as it said its wealth management saw 6% growth in first quarter funds under management and it announced the appointment of Tim Tookey as its chief financial officer.
Insurer Hastings was on the front foot after saying that growth in live customer policies helped drive a 26% rise in first quarter gross written premiums to £214m.
Ultra Electronics was higher after saying it remains confident despite US funding delay, but Just Eat slipped as it said its executive chairman has taken time off for medical reasons.
Drax surged after Barclays upgraded the stock to ‘overweight’ from ‘equalweight’.
