(Reuters) - UK stocks snapped a four-day losing streak on Friday as battered cyclical shares rose, but overall gains were slim as sentiment was subdued after the country reported a record economic contraction in April.
For the week as a whole, benchmark indexes marked their worst weekly drop in about three months, following heavy losses in recent days as the impact of the coronavirus hit equity markets.
Cyclical stocks including banks .FTNMX8350, insurers .FTNMX8570 and oil & gas .FTNMX0530, bounced back on Friday after being at the centre of a heavy sell-off in the previous session.
A tight lockdown to contain the spread of COVID-19 shrunk Britain’s economy by 20.4% in April from March and 24.5% from a year ago, data showed. Both the readings were below the already weak forecasts in a Reuters poll of economists.
“Investors are not stupid, they know April was arguably the height of the lockdown. The unprecedented nature of the fall in economic activity just mirrored the unprecedented act of effectively shutting down a modern economy,” said Russ Mould, investment director at AJ Bell.
The FTSE 100 fell 5.8% on the week, while the FTSE mid-250 index dropped 6.4% on renewed concerns about the COVID-19 pandemic after the United States said growth in new cases accelerated recently.
“Rightly the focus is on the shape and timing of any recovery and simmering concerns about a second wave in the pandemic are far more relevant than just how terrible backward-facing data will look,” Mould said.
Focus will now move to the Bank of England, which is expected to announce a fresh increase of at least 100 billion pounds ($126 billion) in its bond-buying firepower next week.
Among share outperforming on Friday, Games Workshop Group (GAW.L) jumped 8.7% after the fantasy miniatures maker raised its full-year sales forecast.
Technology company IQE (IQE.L), which makes semiconductor wafers for chips used in Apple (AAPL.O) products, surged 23% after forecasting a 27% jump in half-yearly revenue and said it expects to return to profitability.
Reporting by Shashank Nayar and Shreyashi Sanyal in Bengaluru; editing by Uttaresh.V and Susan Fenton