(Sharecast News) – London stocks were set to fall at the open on Friday despite US President-elect Joe Biden’s announcement of a $1.9 trillion Covid relief package, amid ongoing worries about the pandemic.
The FTSE 100 was called to open 31 points lower at 6,770 as investors digest the latest figures from the Office for National Statistics, which showed the economy contracted by 2.6% in November. This was better than expectations for a 5.7% decline but puts the UK on the brink of a double-dip recession.
ONS director for Economic Statistics, Darren Morgan, said: “The economy took a hit from restrictions put in place to contain the pandemic during November, with pubs and hairdressers seeing the biggest impact.
“However, many businesses adjusted to the new working conditions during the pandemic, such as widespread use of click and collect as well as the move online. Manufacturing and construction generally continued to operate, while schools also stayed open, meaning the impact on the economy was significantly smaller in November than during the first lockdown.
“Car manufacturing, bolstered by demand from abroad, housebuilding and infrastructure grew and are now all above their pre-pandemic levels.”
In corporate news, Aveva said it was confident in its outlook for the current year after a “strong” third quarter improved revenue growth to about 1.5% in the nine months to the end of December.
Organic constant currency recurring revenue rose 10% over nine months and 26% in the third quarter.
Defence and aerospace engineers Meggitt said it expected full year results to be in line with expectations but cautioned that the expected recovery in air travel from the Covid pandemic would take longer than expected.
The company reiterated guidance from November with underlying profit in the middle of a £180m – 200m range and revenue of £1.7bn.
“Trading across our end markets in the final quarter was broadly in line with the trends experienced in October, with group performance lower than our September base case, which assumed a progressive improvement in civil aerospace in the fourth quarter,” Meggitt said.
It said the rollout of coronavirus vaccines and pent-up demand for air travel, “provides a supportive backdrop for the recovery in civil aerospace in 2021”, but warned that logistical challenges in getting jabs administered meant “this positive development will take time to feed through into growth in flight and passenger numbers and aftermarket activity levels”.