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London open: Stocks fall ahead of GDP data; Centrica tanks on profit warning
London stocks fell in early trade on Thursday as investors eyed the latest reading on third-quarter UK GDP, with British Gas owner Centrica down sharply after a profit warning.
At 0830 GMT, the FTSE 100 was 0.5% lower at 7,383.70, while the pound was down 0.2% versus the euro at 1.1249 and 0.1% lower against the dollar at 1.3309.
On the data front, the second estimate of third-quarter gross domestic product data is due at 0930 GMT, while the CBI distributive trades survey is at 1100 GMT.
The GDP reading is expected to be unchanged from the preliminary estimate of 1.5%.
Oanda analyst Craig Erlam said: “If the OBR’s forecasts – as revealed by Chancellor Philip Hammond in yesterday’s Autumn – are to be believed, we should get used to only moderate growth in the coming years, with significant downward revisions being driven by lower productivity and business investment.”
In corporate news, Centrica tumbled 17% as it warned that annual profit will be lower than market expectations due to poor performance at its business energy supply division.
Pub group Mitchells & Butlers also suffered heavy losses after it reported a drop in full-year profit on as it highlighted inflationary cost headwinds, although revenue rose.
GlaxoSmithKline slipped after saying that it and partner Innoviva have filed a supplemental new drug application with the US Food and Drug Administration for the use of Trelegy Ellipta for an expanded indication of chronic obstructive pulmonary disease.
Cineworld fell despite reporting a 10.6% jump in revenue for the period from 1 January to 19 November.
SIG slumped after Canaccord Genuity cut the stock to ‘hold’, while National Grid, Vodafone,Carnival, TalkTalk, and Vedanta Resources were all down as their stock went ex-dividend.
On the upside, Severn Trent rallied as it lifted its forecast for regulatory incentives after what it said was a “great” first half of the year, with sales increased 3.7%, underlying earnings per share by 7.7% and dividend by 6.2%.
Residential landlord Grainger edged higher after exchanging contracts with Blackswan Property to forward-fund and acquire a private rented sector build-to-rent development at Gilder’s Yard in Birmingham.
Actuator manufacturer Rotork advanced as it said group order intake in the third quarter increased 12%, while revenue was up 5.1%, while Paragon Banking Group was in the black after posting a rise in full-year profit thanks to growth across its business lines.
