London stocks slip on sluggish GDP data, Diageo's profit warning

The UK's FTSE 100 slipped on Friday, as data showed that Britain's economy failed to grow in the third quarter and the beverages index took a tumble following spirits maker Diageo's profit decline warning. The exporter-focused FTSE 100 was down 0.9% at 0932 GMT, while the mid-cap FTSE 250 dropped 2.2%, on track for the biggest one-day fall since early July.

The UK's FTSE 100 slipped on Friday, as data showed that Britain's economy failed to grow in the third quarter and the beverages index took a tumble following spirits maker Diageo's profit decline warning.

The exporter-focused FTSE 100 was down 0.9% at 0932 GMT, while the mid-cap FTSE 250 dropped 2.2%, on track for the biggest one-day fall since early July. Both indexes were on track for a weekly decline. Shares of Diageo moved 13.6% lower after the Johnnie Walker whisky maker said it expected organic operating profit growth to decline in the first half of fiscal 2024, due to weakening sales in Latin America and the Caribbean, as well as higher trade investments.

The broader beverages index fell 11.0%, touching the lowest levels since March 2021 and was on track for its biggest one-day decline in over 36 years. Meanwhile, data showed the British economic output failed to grow in the July-to-September period, but at least managed to avoid the start of a recession.

The Bank of England had expected a flat reading for growth in the quarter. "Bringing down inflation remains the government and the Bank of England's key priority, even as it comes at the expense of economic growth," said Victoria Scholar, head of investment at interactive investor.

Precious metal miners lost 1.5%, while the industrial metal miners index dropped 1%. Prices of most nonferrous metals fell after hawkish comments by the U.S. Federal Reserve officials signalled further rate hikes could be required to fight inflation.

The oil and gas sector added 0.5%, tracking a slight uptick in oil prices. British homebuilder Redrow expects annual profit and revenue to be at the lower end of its forecast range, hurt by a subdued autumn housing market. The stock was down 5.7%, while the homebuilder index lost 2.3%.

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