FTSE 250 bests main market after postive GDP data fails to move the dial
The FTSE 250 ended the day up 0.5 per centwhile the FTSE 100 was practically flat, ending up just 1.37 points to 6,890.49.
The lethargic start to the day came despite new data that showed Britain’s economy grew by 0.4 per cent in February from January, while the fall in GDP in January was not as severe as previously estimated, down by 2.2 per cent compared with the initial reading of a 2.9 per cent drop.
The difference between the two was in no small part because of Babcock. The defence contractor surprised investors with the announcement that it would slash around 1,000 jobs and wrote down £1.7bn.
But investors rewarded the move with a 32 per cent share price increase when markets closed on Tuesday. The company unveiled a turnaround plan which included raising at least £400 million from selling assets.
Winners & losers
Just Eat was a big winner today, with share jumping more than six per cent after the lockdown winner’s results earlier today.
Autotrader and JD Sports alos were up more than 2.5 per cent each.
SSE, British Airways owner IAG and United Utilities were among the biggest fallers in London today.
Wall Street
The S&P 500 hit a record high today and the Nasdaq jumped as investors flocked to technology-related stocks after the United States’ pause in the rollout of Johnson & Johnson’s Covid-19 vaccine sparked fears of a delay in a broader economic rebound.
The drugmaker’s shares fell 2.7 per centto a one-month low as calls for pausing the use of its COVID-19 vaccine after six women developed rare blood clots dealt a fresh setback to efforts to tackle the pandemic.
The technology and consumer discretionary sectors, which house high-flying technology names that flourished during coronavirus-induced lockdowns last year, rose 0.6 per cent and 0.4 per cent, respectively. Apple, Microsoft and Amazon.com gained between 0.4 per cent and 1.3 per cent.
The news also helped Wall Street’s main indexes shrug off a solid jump in the consumer price index (CPI) in March, kicking off what most economists expect will be a brief period of higher inflation.
“While the jump in CPI is pretty significant, the market may take it with a grain of salt – it could already be priced in as the market has been skittish about rates for some time,” said Mike Loewengart, managing director at investment strategy at E*TRADE Financial.