FTSE Drifts Lower Despite Fairly Decent Economic Data

Despite some encouraging economic data, the U.K. market is down in negative territory Thursday morning as investors react cautiously to mixed earnings updates.

The UK economy expanded unexpectedly in the fourth quarter, underpinned by services and construction output, a report from the Office for National Statistics said.

The benchmark FTSE 100 was down 75.54 points or 0.86% at 8,731.90.

British American Tobacco shares are plunging more than 9% despite reporting FY24 profit of GBP 3.18 billion or 136.0 pence per share compared to a loss of GBP 14.2 billion or 646.6 pence share incurred a year ago.

Unilever is down 7.1% on lower earnings. The consumer goods major said that its fiscal 2024 profit before taxation declined to 8.87 billion euros from last year’s 9.34 billion euros. Net profit dropped 10.8 percent to 6.37 billion euros from 7.14 billion euros last year, and earnings per share were 2.29 euros, down 10.6% from 2.56 euros a year ago.

Barclays is down by about 5% despite higher earnings. The lender reported that its fiscal 2024 profit before tax increased to 8.11 billion pounds from 6.56 billion pounds, last year. Earnings per ordinary share was 34.8 pence compared to 26.9 pence.

Imperial Brands is down 3.4%, while Shell, Beazley, Frasers Group, Vodafone, Centrica, Kingfisher, BP, Standard Chartered, Haleon and Natwest Group are down 1 to 2.5%.

Coca-Cola HBC is climbing up nearly 7% after reporting a profit of 820.6 million euros or 2.25 euros per share in fiscal year 2024, up from 636.5 million euros or 1.73 euros per share in fiscal year 2023.

Barratt Redrow is up 5.3%, while Fresnillo, JD Sports Fashion, Spirax-Sarco Engineering and Entain are gaining 2 to 3%.

Rentokil Initial, Convatec Group, Diageo, Glencore, BAE Systems, Mondia, Diploma, Ashtead, AstraZeneca, Legal & General, Vistry Group and Relx are also notably higher.

Data from the Office for National Statistics said U.K.’s gross domestic product grew 0.1% from the third quarter, confounding expectations for a contraction of 0.1%. This follows a nil growth in the third quarter.

The services sector expanded 0.2% and construction output grew 0.5% in the fourth quarter. Partially offsetting these gains, industrial production declined 0.8%, the data said.

On a yearly basis, the fourth quarter growth in GDP came in at 1.4% compared to 1% in the third quarter. Real annual GDP in 2024 was estimated to have increased 0.9%, following growth of 0.4% in 2023.

Further, data showed that the economy registered a monthly growth of 0.4% in December after rising 0.1% in November.

Another data from the ONS showed that the visible trade gap narrowed to GBP 17.4 billion in December from GBP 18.9 billion in the previous month.

The total trade deficit declined sharply to GBP 2.8 billion from GBP 4.4 billion in November, the data said.