FTSE 100 watch: Footsie flat after UK GDP data

on Oct 27, 2016

The FTSE 100 has erased a short-lived gain in a choppy session today after official data showed the UK economy slowed in the third quarter, albeit less than expected. Sluggish Chinese data and a slump in oil prices also weighed on the markets, sending resources companies lower. As of 13:01 BST, the UK benchmark index was 0.03 percent down at 6,955.74 points.

Britain’s gross domestic product rose 0.5 percent quarter-on-quarter in the three months to September, slowing from 0.7 percent in the quarter to June, the Office for National Statistics revealed in a report today. Although down the figure was better than the 0.3 percent economists had expected.
Compared to a year ago, third-quarter GDP increased 2.3 percent following a 2.1 percent year-on-year increase in the second quarter. Analysts had expected no change to the annualised figure.

The ONS release was the first on GDP to cover a full quarter since the UK voted to leave the European Union on 23 June. The report prompted a rise in sterling and sent UK bond yields to a post-Brexit high.
Mining companies posted some of the biggest losses in London after data showed a slowdown in China’s industrial sector. Industrial profits grew 7.7 percent year-over-year growth in September, sharply down from the 19.5 percent growth the previous month, according to the National Bureau of Statistics.

Oil companies also underperformed after both crude and Brent prices slid on growing doubts over the success of OPEC’s plan to curb production.
Barclays (LON:BARC) was the standout riser after reporting a 35 percent increase in pre-tax profit in the third quarter to £837 million as revenue from fixed income surged 40 percent to £947 million.
Department store chain Debenhams (LON:DEB) was also higher after reporting a 0.5 percent increase in underlying full-year pre-tax profit to £114.1 million.

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