FTSE and pound fall ahead of Q3 GDP 2nd estimate
The markets got off to a pretty gloomy start this Thursday, with everything bobbing about in a sea of red.
The FTSE found itself back below 7400 after dipping half a percent. It was hard to pinpoint the exact cause as most of the key sectors, including the banking and commodity stocks, found themselves posting varying degrees of losses. The housing sector, at least, bounced back from yesterday’s Budget-inspired decline, with Berkeley Group (LON:BKGH), Persimmon (LON:PSN) and Barratt Developments (LON:BDEV) all posting early growth.
Taking a leading role in the FTSE’s decline was Centrica (LON:CNA), which plunged 16.5% after revealing that since the end of June it had lost a whopping 823,000 household energy supply customers. Combine this with weaker operating profit in North America and the British Gas-parent was forced to admit that its full year earnings will be lower than current market expectations, a death knell for any stock, let alone one stuck in an ever-evolving sector.
The pound was also on the back foot this Thursday, slipping 0.1% against the dollar and 0.2% against the euro. Admittedly, however, that doesn’t quite capture sterling’s differing form against its rivals. Cable may be in the red but, after last night’s Fed meeting minutes showed some central bank members aren’t completely convinced about the current speed of rate tightening, it still opened above $1.33 for the first time since the start of October. The currency’s been less successful against the euro, pulling back from Tuesday’s highs to sporadically dip the wrong side of €1.125.
Still to come this morning is the UK’s 2nd estimate third quarter GDP reading, which is forecast to come in unchanged at 0.4%. Obviously, any movement around that initial reading will have consequences for the market, most likely sterling.
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