Midday Market: subdued ahead of US GDP data

UK shares gave up opening gains in midday deals as investors steeled themselves ahead of an onslaught of US data with GDP expected to dominate attention in early deals, with losses expected.

According to spread bettors, IG Index, the Dow is expected to fall around 10 points, having lost more than 200 points yesterday and pulling it into the red for the week.

'Yesterday’s durable goods and initial jobless figures were a kick in the teeth for the markets which were just beginning to show some signs of confidence coming back. We are seeing some short-covering ahead of the big GDP number,' said Martine Slaney, head of derivatives at GFT.

Consensus is expecting today's data to show US output fell 5.4% in December, although some suggested it may have been as seep as 6%.  

'Barring a stellar GDP number however, January looks set to finish well down on the month and this is often regarded as a bearish signal for the rest of the year,' said Slaney 

Chevron and Exxon Mobil are the key focus on the corporate calendar.

Back in the UK, the FTSE 100 was down 33.86 points, or 0.81%, at 4,156.25. The FTSE 250 was 36.73 points lower at 6,236.29.

Property groups got a boost as Morgan Stanley upgraded a slew of UK names and downgraded their European peers.  Land Securities rose 36.5p to 670p, while Hammerson added 21.5p to 409.25p.

Wolseley, having fallen 40%, began to recover some ground. Collins Stewart said it upgraded the shares to 'hold' and said the group has good prospects but needs to grasp the nettle and sell some equity. Shares added 10.9p at 181.7p.

Banks were also continuing to retrace some of the ground lost in the recent rout, with Barclays now trading at 103.9p and Lloyds at 92.8p, although still below January peaks.