FTSE changes course to end day in black

A strong opening by US stocks helped the FTSE 100 complete a major turnaround to nudge into the black after it emerged that UK GDP fell below expectations in May.

The index opened in decline after economists revealed economic growth of only 1.8 per cent – but it shot into positive territory after the US indices opened for trading.

Trading had also taken a hit from a stark warning by the Office for Budget Responsibility (OBR) that the economy may not return to its pre-virus peak until 2024.

London’s top flight closed 3.56 points higher at 6,179.75. Connor Campbell, financial analyst at Spreadex, said: “The FTSE managed the biggest turnaround, cutting its losses to a quarter of what they were in the aftermath of [the] morning’s disappointing May GDP and the subsequent warnings that came from the OBR.”

The value of the pound fell as sentiment was hit by the GDP reading, the OBR’S warning over the sustained impact of the crisis, and wider caution ahead of more data today, with the latest UK inflation reading.

The pound slid 0.07 per cent versus the US dollar at $1.254 and was down 0.58 per cent against the euro at €1.100.

BT Group jumped to the top of the FTSE 100 after the UK government gave it longer than expected to remove huawei equipment from its 5G mobile network.

The UK government said telecoms companies would need to rip out all of the Chinese tech giant’s equipment from their networks by 2027. BT moved 4.5p higher to 115.6p.

Shares in Ocado slipped after it posted first-half pre-tax losses of £40.6 million, having spent heavily on the roll-out of its overseas technology offering. It also reported a 27 per cent jump in retail revenues to £1.02 billion due to “unprecedented” demand. Shares closed down 44.5p at 1,988.5p.

Soft drink manufacturer Fever-tree lost fizz after it was hit heavily by the closure of bars and restaurants. It also saw sales at UK supermarkets and shops jump by more than a third in the past three months. Shares closed down 118p to 2,300p.

Eyewear manufacturer Inspecs saw shares jump after it acquired the manufacturing operations of lens manufacturer Norville from administrators. Inspecs shares moved 15p higher to 210p.