LONDON, July 1 ― London's FTSE 100 fell yesterday after data showing Britain's economy shrank by the most since 1979 in the first three months of the year took the shine off one of the strongest quarters for UK stocks since the global financial crisis.
The blue-chip FTSE 100 closed 0.9 per cent lower, weighed down by a 4 per cent decline in Royal Dutch Shell Plc after it said it planned to write down the value of its assets by up to US$22 billion (RM94.3 billion) on a lower outlook for oil and gas prices.
Gross domestic product dropped by a quarterly 2.2 per cent between January and March, while Prime Minister Boris Johnson in a speech yesterday, promised to fast-track £5 billion of infrastructure investment to steer the economy out of the downturn.
“In the current climate the UK economy can do with all the help it can get, but the sum of money in question is very small in the grand scheme of things,” said David Madden, market analyst at CMC Markets UK.
The mid-cap FTSE 250 eased 0.5 per cent, with energy firms leading declines.
The FTSE 100 ended the quarter 8.8 per cent higher, its biggest such gain since 2010, as a raft of global stimulus and a pickup in business activity after the easing of coronavirus-driven lockdowns bolstered optimism about a post-pandemic economic recovery.
However, there were still concerns as the city of Leicester went back into lockdown following a local flare-up of the virus.
“After a quarter which has seen the best performance for global equities in more than a decade... the next few months could prove a lot more complicated,” said Russ Mould, investment director at AJ Bell investment.
Homebuilder Redrow slipped 6.8 per cent after saying it expected its turnover to drop more than a third this year. ― Reuters