June 30, 2020 / 7:31 AM / 4 days ago

FTSE 100 ends lower but logs best quarter in a decade

FILE PHOTO: Construction work near the River Thames on the Greenwich Peninsula is seen next to the O2 and Canary Wharf financial district in London, Britain February 12, 2018. REUTERS/Russell Boyce

(Reuters) - London’s FTSE 100 fell on Tuesday after data showing Britain’s economy shrank by the most since 1979 in the first three months of the year took the shine off one of the strongest quarters for UK stocks since the global financial crisis.

The blue-chip FTSE 100 .FTSE closed 0.9% lower, weighed down by a 4% decline in Royal Dutch Shell Plc (RDSa.L) after it said it planned to write down the value of its assets by up to $22 billion on a lower outlook for oil and gas prices.

Gross domestic product dropped by a quarterly 2.2% between January and March, while Prime Minister Boris Johnson in a speech on Tuesday, promised to fast-track 5 billion pounds ($6.15 billion) of infrastructure investment to steer the economy out of the downturn.

“In the current climate the UK economy can do with all the help it can get, but the sum of money in question is very small in the grand scheme of things,” said David Madden, market analyst at CMC Markets UK.

The mid-cap FTSE 250 .FTMC eased 0.5%, with energy .FTNMX0530 firms leading declines.

The FTSE 100 ended the quarter 8.8% higher, its biggest such gain since 2010, as a raft of global stimulus and a pickup in business activity after the easing of coronavirus-driven lockdowns bolstered optimism about a post-pandemic economic recovery.

However, there were still concerns as the city of Leicester went back into lockdown following a local flare-up of the virus.

“After a quarter which has seen the best performance for global equities in more than a decade... the next few months could prove a lot more complicated,” said Russ Mould, investment director at AJ Bell investment.

Homebuilder Redrow (RDW.L) slipped 6.8% after saying it expected its turnover to drop more than a third this year.

Reporting by Shashank Nayar and Sagarika Jaisinghani in Bengaluru; editing by Uttaresh.V and Kirsten Donovan

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