UK stocks fall as real estate shares drop; economic data on tap

The London Stock Exchange Group offices are seen in the City of London, Britain, December 29, 2017. Photographer Toby Melville/File Photo

By Reuters

UK stocks inched lower on Monday led by a drop in shares of real estate investment trusts, while investors awaited key economic data to assess the strength of the British economy.

The commodity-heavy FTSE 100 edged 0.1% lower, while the mid-cap index FTSE 250 (.FTMC) fell 0.4% after logging its best week in a year on Friday.

Shares of real estate investment trusts shed 1.2% after the index tracking real estate stocks rose sharply last week.

Aerospace and defence stocks rose 0.7% boosted by a 4.0% gain in shares of Melrose Industries after the aerospace supplier said GKN Aerospace Engines business expanded its partnership with with GE Aerospace.

All eyes will be on the UK GDP data this week, which is expected to show a contraction of 0.1% on a monthly basis in September, compared with growth of 0.2% a month ago, according to a Reuters poll of economists.

“Overall, none of our survey indicators point to a household recession – at least not yet,” Sanjay Raja, chief UK economist at Deutsche Bank said in a note.

“A sluggish growth profile remains more likely, with lingering pessimism from the cost of living shock and the unfolding interest increase still working its way through the economy.”

Other economic data this week includes housing prices, construction and services activity for October.

Investors will also monitor commentary from a slew of Bank of England officials, including Governor Andrew Bailey who will be speaking at the Irish central bank conference on Wednesday.

Among individual stocks, Hipgnosis Songs Fund (SONG.L), which had been undertaking a review of its financial position, fell 5.2% after it said it would not declare dividends before its new fiscal year to ensure sufficient cash resources.

EasyJet and Wizz Air gained 3.7% and 3.0%, respectively, after Ryanair (RYA.I) forecast a record annual profit and promised a regular dividend pay.

Sportswear retailer JD Sports climbed 1.2% after Citigroup initiated coverage on the stock with a “buy” rating.