FTSE 100 goes into reverse as US bond yields edge higher after growth figures
On Wall Street, benchmarks were mixed, with the Dow Jones losing around 15 points but the broader based S&P 500 adding nearly a point
- FTSE 100 closes down by a whisker
- US markets mixed
- BT boosted by sports unit sale talks
5.05pm: FTSE finishes in red
FTSE 100 index closed a tad lower on Thursday as first quarter GDP figures from across the pond sent negative ripples through markets.
The UK’s top share index finished down around two points, or 0.03%, at 6,961.
On Wall Street, benchmarks were mixed, with the Dow Jones losing around 15 points but the broader based S&P 500 adding nearly a point.
Gross domestic product, seen as a type of scorecard for the US economy, rose at a 6.4% annual pace in the first three months of the 2021. Estimates had been for between 6.5% and 6.8%.
“The US economic bounceback remains on track despite a marginally lower GDP reading for the first quarter. Today’s annualised GDP reading of 6.4% fell short of estimates today, and markets evidently struggled with that fact,” said analyst Joshua Mahony at IG.
“Declines throughout US markets at the open come despite a post-earnings surge from tech giant Facebook. Nonetheless, with real GDP rising to an annualised figure of $19.1 trillion, it is highly likely that we overcome the pre-pandemic peak of $19.3 trillion by the end of Q2,” he added.
3.56pm: Markets slip from best levels
Well it seems less likely the FTSE 100 will finish above 7000.
The good US data gave a lift to markets initially, helped by the dovish words from the Federal Reserve about not turning off the money taps just yet.
But the strong growth in the US economy has also rekindled fears of rising inflation which could push the Fed into action despite what it has said so far.
US Treasury yields have moved higher as a consequence, and like clockwork, the markets have moved lower.
The FTSE 100 is now down 7.5 points or 0.11% at 6956.17.
On Wall Street the Dow Jones Industrial Average is virtually flat, the S&P 500 up 0.23% and the Nasdaq Composite, despite the boost from forecast beating figures from Apple and Facebook, is down 0.08%.
Michael Hewson at CMC Markets said: “Having got off to such a good start, and US data looking so promising it’s a little surprising to see stocks slide back. However today’s gains appear to be being tempered by a sharp rise in US 10-year yields, which at the time of writing are up 7 basis points, and appear to be acting as a bit of a drag.”
Meanwhile copper has hit the $10,000 a tonne level for the first time since February 2011, on growing demand as economies reopen and pressure grows for more green initiatives. The metal is widely used in electric cars and wind turbines, for example.
That has done little for copper miner (), however, which is down 8.5p or 0.44% at 1906.5p.
3.14pm: Is a close above 7000 too much for leading index?
Will it or won’t it?
The last time the leading index hit 7000, it lasted just two days before falling back below the magic level.
This is the first time since then it has put its head above the parapet again, and it is now hovering around 7000 uncertain which way to go.
As the opening surge on Wall Street fades a little, the FTSE 100 is now at 6984.7, up 21.03 points or 0.3%. It still has time to move higher, but whether the will is there is another matter.
In the US, the Dow Jones Industrial Average is now up 0.26%, the S&P 500 is 0.55% better and the Nasdaq Composite has added 0.31%.
2.45pm: Proactive North America headlines:
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Read More: FTSE 100 goes into reverse as US bond yields edge higher after growth figures