End of recession fails to lift London market

An official end to the UK's longest recession since records began failed to give any fillip to the FTSE 100 Index today.

An official end to the UK's longest recession since records began failed to give any fillip to the FTSE 100 Index today.

The 0.1% growth seen in the last quarter of 2009 represented a technical end to the slump but was a far cry from the 0.4% expected in the City.

The London market barely moved after the data, down 32.1 points at 5229.2 by midday, as concerns over Asian economies dogged trading.

Slowing growth in South Korea during the fourth quarter of last year added to worries over lending curbs in China, while ratings firm Standard & Poor's also downgraded its outlook for the Japanese economy.

The main action was in the currency markets following the UK output data as markets bet on interest rates staying low for longer to underpin recovery.

The pound edged below 1.61 against the dollar at one stage and lost almost a cent against the euro.

In London, heavyweight commodity stocks were the leading casualties as worries over global growth lingered.

Miners Fresnillo and Xstrata were down 24.5p to 690p and 33.5p lower at 1069p respectively as the sector littered the fallers' board.

The biggest blue-chip faller was inter-dealer broker ICAP, which continued its decline on concerns over potential US reforms restricting share dealing by banks. Shares were off 14.7p to 380.1p or almost 4%.

In corporate news software firm Sage edged 2.4p lower to 235.3p or 1% after the business said it was still waiting for signs of a market recovery.

Utility Severn Trent made early progress after a trading update highlighted stabilising bad debts despite a sharp rise in burst pipes due to the cold snap. Shares lost momentum later however to stand 3p down at 1134p.

Among the risers, the session saw a shift into defensive sectors amid uncertain prospects. Imperial Tobacco was the leading Footsie riser, up 27p to 2018p.

The major grocers also advanced as investors put their money into less risky areas, with Sainsbury's up 0.1p to 326.4p, Morrisons 2.9p better at 293.8p and Tesco 3.3p higher at 419p.

Broker comments also provided some momentum. Asian-facing bank Standard Chartered was up 18p to 1463p after brokers upgraded the firm to buy, while positive comments from Morgan Stanley on European airlines helped British Airways add 1p to 208.6p.

Citigroup meanwhile lifted its price target on budget airline easyJet, which added 11.7p to 398.7p in the FTSE 250.

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