TUESDAY MARKET CLOSE: GDP miss brings FTSE rally to an end

SIGNS that the UK economy’s recent good run may be losing steam put markets on the back foot.

The FTSE 100 broke its eight-day winning streak to close 40.79 points lower at 6,811.61 after growth slowed to 0.5 per cent in the final quarter of last year, although the fact that buyers emerged late on to push the index back over 6,800 will be taken as a bullish sign.

Tony Cross, market analyst at Trustnet Direct, said: “The downside was further exaggerated by news out of the US that durable goods orders came in well below expectations, adding doubt on the health of the economy across the pond. Although this may defer a rate hike decision by the Fed, there’s little comfort to be found.”

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On the fallers’ board electricals retailer Dixons Carphone gave up some of its recent gains after it was the subject of a downgrade from Morgan Stanley. Shares were 10.5p lower at 419.4p.

Airline stocks were once again flying high as EasyJet reported positive numbers and British Airways owner IAG saw its bid for Aer Lingus get the nod from the Irish carrier’s board.

EasyJet, which said that first-half seasonal losses would reduce this year as the group has added more seats to successful routes, was 2 per cent higher, up 33p to 1,789p.

IAG climbed 12p to 561p on expectations that it has done enough to land Aer Lingus in a deal worth £1 billion.

Centrica was the leading riser in the FTSE 100 as a broker upgrade from Credit Suisse helped shares in the Scottish Gas owner improve 4 per cent, or 11.3p, to 282.7p.

With rival EDF announcing only a modest price cut, SSE was also higher, up 29p to 1,545p.

Outside the top-flight, Carpetright rose 11.2p to 458p after a trading update showed signs of progress in its turnaround plan.