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Summary
- FTSE 100 traded largely in the negative territory as UK GDP grew by 0.4 per cent
- February’s GDP estimate is still 3.1 per cent down from October’s reading
- GBP slipped into negative territory against the US counterpart
UK shares traded range bound, largely in the negative territory in the early afternoon deals on Tuesday, 13 April, after the February 2021 UK GDP reading stood sharply below the measure recorded for October 2020. A seemingly similar dejection was seen in the currency markets, with the Great Britain pound (GBP) trading almost flat against the United States dollar (USD).
According to estimates by the Office for National Statistics (ONS), the UK GDP staged a marginal bounce of 0.4 per cent, led by the collective growth in construction activity, followed by manufacturing, production and services.
February’s estimate for the national GDP is still 7.8 per cent down from the GDP value seen in the pre-pandemic month, February 2020, and 3.1 per cent lower as compared to the pandemic peak achieved in October 2020.
Also Read: UK Economy Expands By 0.4% In February 2021
According to the latest data available with the London Stock Exchange, the benchmark FTSE 100 traded 0.15 per cent lower at 6,879.06 (1215 BST) from the previous close of 6,889.12. During the day so far, the headline index managed to hit a marginal high of 6,895.12. The heavyweight shares skewed broader indices FTSE 350 and FTSE All Share hovered in a much similar fashion, down 0.11 and 0.13 per cent, respectively.
On the other hand, the mid-cap shares indicator FTSE 250 oscillated slightly higher in positive territory at 22,162.70, up 0.04 per cent.
Meanwhile, the GBP to USD pair was trading at 1.3721, down 0.13 per cent from the previous close of 1.3740 at the interbank foreign exchange market. In the intraday deals so far, the currency pair shuttled briefly in a range of 1.3720 - 1.3769. The Bank of England had fixed a reference exchange rate of 1.3744 USD and 1.1543 EUR against a unit of pound sterling on 12 April.
The optimism around the second stage reopening has been largely factored in by the markets; investors are now looking forward to how the further planned easement unfolds and help the businesses to steer through the still evolving nature of the coronavirus pandemic. Furthermore, the market participants will remain focused on the upcoming macroeconomic indicators to better gauge the path of recovery.
The scheduled corporate results in the present quarter are likely to have a material impact on the equity market sentiments in the near future as the companies will be presenting the actual picture of their respective commercial operations of the first quarter of 2021.
