Weak earnings from some of the U.K.’s heavyweights weighed on London’s benchmark stock index on Thursday, offsetting better-than-expected growth data for the country.
The FTSE 100 index UK:UKX +0.00% lost 0.1% to 6,428.65, after closing two days in positive territory.
The index showed little reaction to the preliminary gross-domestic-product release, showing the U.K. economy avoided a triple-dip recession in the first quarter. GDP rose 0.3%, beating expectations of a 0.1% improvement.
“A continuation of growth in the second quarter is by no means assured. The euro-zone crisis is not only hurting exports but is also having a damaging effect on global business confidence,” said Chris Williamson, chief economist at Markit, in a note.
“At the same time, weak domestic spending and investment by businesses can be linked to lingering uncertainty about the economic outlook and a lack of lending. Consumer spending is meanwhile being subdued by job worries, low pay and high inflation,” he added.
Instead, investors digested earnings results from major FTSE components. AstraZeneca PLC UK:AZN -2.67% AZN -0.94% lost 2.6%, after the drug maker reported a 36% drop in first-quarter pretax profit, falling short of analysts’ expectations.
Peer firm GlaxoSmithKline PLC UK:GSK -0.03% GSK +0.45% nudged 0.4% lower.
Among other stocks on the decline, Unilever PLCUK:ULVR -1.90% UL +0.07% slid 1.9%. The consumer-goods firm reported first-quarter sales growth below expectations, as slowing North America growth and a weak start to ice cream purchases in Europe added pressure.
Shares of car insurer Admiral Group PLC UK:ADM -0.74% shaved off 0.7%, after the company said year-on-year car-insurance premiums have dropped around 10%.
On a more upbeat note, shares of British American Tobacco PLC UK:BATS +2.13% BTI -0.05% added 2.1%, after the firm said first-quarter revenue went up 5% at constant exchange rates. Additionally, the board said it’s confident of another year of earnings growth in line with long-term strategic goals.
Shares of Vodafone Group PLC UK:VOD +2.36% VOD -0.69% added 2.3%, after reports said Verizon Communications Inc. VZ -0.99% plans to bid for joint venture Verizon Wireless.
Outside the main index in London, shares of Kazakhmys PLC UK:KAZ +3.37% jumped 4.2%. The miner said it’s on track to meet its full-year copper output target.
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