Big Ben with flag of United Kingdom in London, UK

United Kingdom’s FTSE 100 index edged higher on Friday after the release of UK GDP data. The index went up by more than 0.55% starting the day on a high note. Other European stocks like French CAC 40 and Euro STOXX 50 increased while Germany’s DAX remained unchanged.

United Kingdom’s Economic Data

The FTSE 100 index reacted to the UK GDP data released by the Office for National Statistics on Friday. UK Gross Domestic Product (GDP) increased by 2.3% MoM in April 2021 slightly increasing from the previous increase of 2.1%. April’s GDP was slightly stronger than the estimated forecast of 2.2% and the fastest monthly growth since July 2020.

The service sector was the key contributor to the GDP’s recovery and as boosted by strong retail sales data. The service sector was up by 3.4% in April 2021 with the reopening of consumer facing services. Food and beverage index rose with the easing of lockdown restrictions which led to the reopening of pubs and restaurants.

Retail sales surged in April as they recorded a 9.2% increase. With consumer spending on the rise, clothing purchases went up.

The FTSE 100 index also reacted to the weak Industrial production in the United Kingdom. UK Industrial production slipped by 1.3% in April 2021 from the previous 1.8% increase. This was the first fall since January 2021.

Mining and quarrying output sharply contracted by 15% in April this year. Construction sector contracted by 2.0% in April declining from March’s strong output. This was brought about by the faster slowdown in new work than repair and maintenance.

UK Manufacturing Production declined by 0.3% MoM in April. The decline was driven by lower output in 5 of the 13 manufacturing subsectors. Manufacture of basic pharmaceuticals products and preparations led the losses with a 16% fall.

Manufacturing output was 2.4% below February’s 2020 level. Mining and quarrying are also 23.7%below the pre-pandemic levels. However, electricity and gas were 2.4% above the pre-Covid levels as well as water supply and sewerage which was up 2.7%.

FTSE 100 Movers

Miners were among the best performers in the FTSE 100 index. Some of the include Thungela Resources Ltd, Fresnillo and Glencore plc. Thungela gained 3.17% in its stock price a few days after Anglo American plc exited the South African coal business. Fresnillo and Glencore each gained more than 2.20% in their stock price after UK GDP data release.

Some of the drags in the index are Informa plc, Just Eat Takeaway.com and Standard Chartered.  Informa plc declined by 1.76% after recording a 22% YoY fall in its stock price. Just Eat Takeaway.com and Standard Chartered each fell by 1.68% and 1.19% respectively.

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