FTSE 100 Live October 12: GDP contracts, Bank of England warns of bond support

Banks under pressure, M&S down 3%

Lloyds Banking Group, Marks & Spencer and other popular UK-focused stocks fell sharply amid a darkening outlook.

Lloyds, which owns mortgage lender Halifax and is seen as a bellwether for the UK economy, traded below 40p for the first time since March as its shares fell another 4% or 1.7p.

After being 49p ahead of the Kwasi Kwarteng mini budget, the summer of progress for the widely held stock has been dramatically reversed by mortgage market turmoil and fears of a hard landing for the property sector.

Today’s weaker than expected GDP print added to jitters in the banking sector as state-backed NatWest fell 4% or 8.5p to 213.1p and Barclays tumbled fell 6.9p to 133.3p.

Declines of more than 5% for homebuilders Barratt Developments and Persimmon completed a UK-focused cull advisory, while Ocado suffered further as the grocery tech stock established a new multi-year low at less than 400p.

Backing from defensive players such as drug giant AstraZeneca and outsourcing firm Bunzl helped the internationally-focused FTSE 100 cling to its opening mark for a sixth straight session pressure on European markets.

The Elite improved 5.01 points to 6890.24, while the UK-focused FTSE 250 index suffered another blow with a fall of 1.4% or 231.63 points to 16,672.43.

Today’s drop of 3p for Marks & Spencer means the retailer has fallen 60% this year to levels last seen at the start of the Covid outbreak, at 95.18p. Other second-tier casualties included pub chain Mitchells & Butlers, which fell another 4.5p to 104.9p.

The biggest drop in the FTSE 250 index was recorded by specialty chemicals company Synthomer after it suspended dividend payments until the end of 2023, including one due next month. The move, which follows a recent profit warning, sent shares down another 10.25 pence to 86.15 pence.

On AIM, equipment retailer Angling Direct fell 4p to 28p after slashing full-year expectations due to volatile trading conditions. Having been hit by poor fishing conditions during the August heatwave, he said weekly September sales fluctuated between a 21% increase and a 0.5% decrease.

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