UK stocks pull out of a 4-day losing streak as cyclical stocks recover
- UK stocks pull out of a 4-day losing streak as cyclical stocks recover on Friday.
- FTSE 100 & FTSE 250 record sharpest weekly declines in almost three months.
- Coronavirus results in a 20.4% contraction in the UK’s economy in April.
London-listed stocks pulled out of a 4-day losing streak as cyclical stocks recovered on Friday. Overall gains, however, remained slim as the country revealed its economy to have seen an unparalleled contraction in April.
Cyclical stocks, including insurers (.FTNMX8570), banks (.FTNMX8350) and oil and gas (.FTNMX0530) contributed the most to the intraday gain on Friday.
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UK’s benchmark indices post their sharpest weekly declines
The UK’s blue-chip FTSE 100 index opened at 6,076.70 but closed 0.5% higher at 6,090.84. The domestically focused FTSE 250 index also recorded a 0.6% intraday gain on Friday. On the weekly chart, however, both benchmark indices registered their sharpest declines in almost three months. The weekly loss, as per the experts, was attributed to the ongoing Coronavirus pandemic and its subsequent impact on equity markets. Learn more about different stock exchanges and stock indices.
Owing to the nationwide lockdown in recent months, COVID-19 resulted in a 20.4% contraction in the UK’s economy in April as compared to March and an even broader 24.5% contraction versus the year ago. Both readings fell short of economists’ forecasts that were already on the weaker side.
The FTSE 100 recorded a 5.8% weekly decline on Friday while the midcap index noted a steeper 6.4% decline as the United States warned that new cases of COVID-19 are on the rise again.
Analysts and investors alike are now interested in seeing if the Bank of England resorts to fuelling its bond-buying firepower by a minimum of £100 billion next week.
Other prominent price actions on Friday
The British technology company that makes semiconductor wafers for Apple products, IQE, also said that it is anticipating a 27% increase in its revenue in the fiscal first half. Expressing confidence that it will return to profitability in H1, the company climbed by 23% in the stock market on Friday.
The world’s largest exhibitions organiser, Informa (LON: INF), said on Friday that the ongoing health crisis has resulted in a delay or cancellation of over 160 event brands that could have generated £300 million in revenue. Despite a dovish forecast of a 33% hit to its revenue in fiscal 2020, shares of the company still printed an about 6% intraday gain on Friday.