London midday: Stocks slip after UK GDP data

28th Mar 2012 11:36

- UK Q4 GDP weaker than first thought- RSA leads ex-div stocks lower- Defensives in demandThe FTSE 100 swung between gains and losses during the morning session in London as stocks reacted to some worse-than-expected economic data.The UK economy did worse in the last three months of 2011 than previously thought with the Office for National Statistics (ONS) revising down its GDP estimates. GDP fell by 0.3% in the fourth quarter, weaker than the 0.2% contraction previously estimated by the ONS. The downward revision came from the transport, business services and finance sectors not performing as well as previously thought. Howard Archer, chief UK economist at IHS, said the economy was likely to have returned to growth in the first quarter of 2012. "We expect the economy to have expanded by around 0.3% quarter-on-quarter although the marked drop in retail sales volumes in February suggests that the risks to this forecast are to the downside," he said.Meanwhile, French GDP increased by 0.2% quarter-on-quarter in the last three months of 2011, slowing down from the 0.3% growth seen in the preceding quarter. This meant that GDP increased by 1.7% in 2011 as a whole, up from 1.4% growth in 2010.In other news, concerns over the US economy were also weighing on sentiment today. In an exclusive interview with US television station ABC, Federal Reserve Chairman Ben Bernanke said that the increase in gas prices could boost inflation in the following months, decrease consumer income and cause a "hit on growth". He said that while the labour market looks to be improving, employment remains too high and its "far too early to declare victory" on the economy recovery. EX-DIV STOCKS TUMBLESome heavyweights on the Footsie have fallen steeply after trading without the right to their latest dividends, including RSA Insurance (down over 6%), Prudential, Anglo American, Schroders and Eurasian Natural Resources Corp (ENRC). Miners on the whole were providing a drag, with Antofagasta, Randgold Resources and Fresnillo registering losses. Russian steel giant Evraz fell over 2% after saying that it expects the global steel industry to remain challenging in 2012. Nevertheless, the company reported a pre-tax profit of $873m, up from $633m in 2010. Inter-dealer broker ICAP fell over 3% after it left full year guidance unchanged despite seeing an increase in risk appetite in some markets this year.It seemed as it was a case of 'risk-off' this morning with investors shifting into defensive sectors such as pharmaceuticals and utilities. Drugs giants GlaxoSmithKline and Shire were in demand, joined by energy firm International Power and National Grid.FTSE 250: KENMARE, PETROPAVLOVSK BUCK THE TRENDDespite mining stocks falling by an average 1.3%, second-tier mining peers Kenmare Resources and Petropavlovsk bucked the trend after their full-year results. Kenmare reported revenues of $167.5m in 2011, up from $91.6m the year before, helped by rising prices. The group swung to a pre-tax profit of $23.7m versus a loss of $16.3m in 2010. Gold producer Petropavlovsk rose after seeing revenue double in 2011 on the back of higher production and soaring gold prices. The group also said it expects production to rise a further 8% in 2012 and admitted that forecast was "conservative". African energy firm Ophir was also a high riser after it said it wants to raise up to £7.6m to help finance its expanding drilling programme. The firm said it would offer up to 30.5m new ordinary shares of 0.25 pence each, which help it to maintain its equity position in its successful Tanzania sites. Meanwhile, gold miner Centamin dropped on the back of fuel subsidy fears. Given the economic challenges facing Egypt at the moment (not least because of the removal of the Mubarak regime) the company has been forced to get half of its fuel on the international market but negotiations are ongoing with the government over future subsidies. BCFTSE 100 - RisersSage Group (SGE) 299.10p +1.36%International Power (IPR) 385.10p +1.32%Meggitt (MGGT) 404.20p +1.25%Associated British Foods (ABF) 1,231.00p +1.15%GlaxoSmithKline (GSK) 1,438.00p +1.09%Shire Plc (SHP) 2,144.00p +0.99%Hargreaves Lansdown (HL.) 493.00p +0.98%Rolls-Royce Holdings (RR.) 832.00p +0.91%Reckitt Benckiser Group (RB.) 3,589.00p +0.90%Reed Elsevier (REL) 565.00p +0.80%FTSE 100 - FallersRSA Insurance Group (RSA) 108.50p -6.30%ICAP (IAP) 394.70p -3.52%Fresnillo (FRES) 1,622.00p -3.34%Prudential (PRU) 772.50p -3.13%Schroders (SDR) 1,591.00p -3.11%Schroders (Non-Voting) (SDRC) 1,242.00p -3.04%British Land Co (BLND) 484.70p -3.00%Evraz (EVR) 369.60p -2.94%Eurasian Natural Resources Corp. (ENRC) 602.50p -2.67%Anglo American (AAL) 2,381.50p -2.48%FTSE 250 - RisersKenmare Resources (KMR) 49.90p +5.61%Ophir Energy (OPHR) 506.50p +3.77%UK Commercial Property Trust (UKCM) 72.90p +2.75%Wetherspoon (J.D.) (JDW) 416.50p +2.33%Cranswick (CWK) 818.00p +2.31%Stagecoach Group (SGC) 265.40p +1.69%Spirit Pub Company (SPRT) 61.75p +1.65%Petropavlovsk (POG) 630.00p +1.61%Computacenter (CCC) 441.70p +1.05%Laird (LRD) 216.30p +1.03%FTSE 250 - FallersCentamin (DI) (CEY) 73.80p -5.75%Petra Diamonds Ltd.(DI) (PDL) 179.10p -4.84%Hochschild Mining (HOC) 465.90p -4.53%Domino's Pizza UK & IRL (DOM) 452.60p -4.01%Gem Diamonds Ltd. (DI) (GEMD) 275.20p -3.94%Essar Energy (ESSR) 150.90p -3.70%St James's Place (STJ) 356.90p -3.59%F&C Asset Management (FCAM) 67.25p -3.24%Euromoney Institutional Investor (ERM) 771.50p -3.20%Atkins (WS) (ATK) 769.00p -2.90%