The UK economy expanded at a record pace in the third quarter – though the performance left dealers cold as the FTSE 100 succumbed to profit-taking.

Gross domestic product rose by 15.5% in the latest three months, but it is still around 8% down on its pre-pandemic level.

And with boosters such as Eat Out to Help Out at an end and the UK now in the grip of a second national lockdown, the outlook remains grim.

The Bank of England is predicting the economy will shrink by around 11% in 2020.

“A strong rebound in the economy is clearly positive, but we should keep the champagne on ice for now,” said Laith Khalaf, analyst at funds group AJ Bell.

“The summer boom was turbo-charged by the Eat Out to Help Out scheme, while the furlough scheme worked its magic by keeping unemployment under wraps.

“But if you shut down an economy and then open it up, it’s not hugely surprising that you get a huge seesaw effect in quarterly GDP numbers

“A swollen summer of economic activity hasn’t repaired the damage done in the first half of year though and the new lockdown means the UK can expect to end 2020 significantly behind where it started.”

6.41 am: FTSE 100 set to give up some of its recent gains 

The FTSE 100 is set to give up more than 1% as the week’s earlier vaccine glee gives way to pragmatism and caution.

CFD and spreadbetting group IG sees London’s blue-chip benchmark down around 67 points, making the price at 6,320 to 6323 with just over an hour to go until the open.

After the rally over the past few days, on Pfizer’s strong vaccine news some profit taking was at some point inevitable – especially as attention turns to what will be an unprecedented and pressured logistical undertaking.

Rolling out a vaccine globally will come with a myriad of political, ethical and economic implications.

“Now that a couple of days have gone by and we’ve had more time to absorb the enormity of this week’s announcement, we are now starting to hear some more discerning voices make their presence felt, in terms of the logistical difficulties involved in the distribution of this vaccine, as well as how effective the vaccine is likely to be on a longer-term basis,” said Michael Hewson, analyst at CMC Markets.

He added: “This would suggest that there is probably a lot of wishful thinking going in with respect to how quickly any new vaccine is likely to get rolled out. In other words, investors run the risk of getting ahead of themselves, running the risk of a sharp pullback.

“These concerns could well start to see a little profit taking start to creep in as Europe wakes up for a new trading session, with markets here set for a modestly lower open.”

Wednesday’s trading in New York was mixed. The Dow Jones slipped slightly lower to close at 29,397, down 23 points.

The S&P 500, meanwhile, notched 0.77% higher to finish the day at 3,572 and the Nasdaq raced up 2% to finish at 11,786. Small cap focussed Russell 2000 index scratched a slim decline, ended at 1,736.

In Asia, Japan’s Nikkei gained 171 points or 0.68% to trade at 25,520 whilst Hong Kong’s Hang Seng flipped negative, down 135 points or 0.52% at 26,091. The Shanghai Composite was 0.32% lower at 3,332.

Around the markets

The pound: US$1.3191, down 0.23%

Gold: US$1,868 per ounce, up 0.19%

Silver: US$24.11 per ounce, down 0.57%

Brent crude: US$43.58 per barrel, down 0.06%

WHI crude: US$41.24 per barrel, down 0.29%

Bitcoin: US$15,867, up 2.93%

6.45 am: Early Markets: Asia / Australia

Stocks in Asia-Pacific were mostly lower today as the COVID-19 situation remains severe despite positive news on the vaccine front with the US recently setting a new record of average daily cases.

Mainland Chinese stocks fell by the evening with the Shanghai composite dipping 0.31% while Hong Kong’s Hang Seng index declined 0.54%.

In South Korea, the Kospi shed 0.35% but Japan’s Nikkei 225 was an exception, rising 0.68%.

Australia’s S&P/ASX 200 gave back its early gains and closed 0.49% lower at 6418 points following its rise for five successive sessions from last Thursday to yesterday.


Proactive Australia news:

FYI Resources Ltd (ASX:FYI) (FRA:SDL) has received encouraging results from detailed testing of high purity alumina (HPA) samples supplied to a leading European HPA market participant.

Strategic Elements Ltd (ASX:SOR) subsidiary Stealth Technologies has licensed technology from Australia’s national science agency, the Commonwealth Scientific and Industrial Research Organisation (CSIRO), that enables robots to work together in teams.

archTIS Ltd (ASX:AR9) has received very strong demand resulting in binding commitments from investors for a placement, raising gross proceeds of around $8.4 million via the issue of 25,454,545 million shares at 33 cents per share.

Paradigm Biopharmaceuticals Ltd (ASX:PAR) has initiated a Phase II clinical trial of subcutaneous injectable Pentosan Polysulphate Sodium (iPPS), in patients with the ultra-rare orphan disease Mucopolysaccharidosis Type 1 (MPS-1).

Australian Vanadium Ltd (ASX:AVL) has launched a green hydrogen strategy for a sustainable future with resultant carbon emission reduction potential.

Alta Zinc Ltd (ASX:AZI) commenced drilling at its Gorno Zinc Project and started exploration at its Punta Corna Cobalt Project, both in Italy, during the September quarter.

Tempus Resources Ltd (ASX:TMR) (FRA:4W0) is set to start drilling at the Elizabeth sector of Blackdome-Elizabeth Gold Project in southwestern British Columbia, Canada, after receiving final approval.

Oakdale Resources Ltd (ASX:OAR) (FRA:F1S) has started aircore drilling at the Gibraltar Halloysite-Kaolin Project within Australia’s premier halloysite-kaolin region on the Eyre Peninsula of South Australia.

Galena Mining Ltd (ASX:G1A) has completed the funding package for Abra Base Metals Project after an agreement was executed with Taurus Mining Finance Fund No2 LP for US$110 million in project financing debt facilities.

Lake Resources NL (ASX:LKE) (OTCMKTS:LLKKF) is ramping up project development activities at its Kachi Lithium Brine Project in Argentina with shallow drill testing to commence shortly.

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