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London open: FTSE nudges up as investors mull UK GDP
London stocks nudged higher in early trade on Thursday as data showed the UK economy grew as expected in the second quarter.
At 0845 BST, the FTSE 100 was up 0.1% at 8,291.42.
Figures released earlier by the Office for National Statistics showed the economy grew 0.6% in Q2, down slightly on 0.7% growth in the first quarter but in line with expectations.
The figures also revealed that on a monthly basis, the economy showed no growth in June, as expected.
Liz McKeown, director of economic statistics at the ONS, said: “The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year.
“Growth across the three months was led by the service sector, where scientific research, the IT industry and legal services all did well.
“In June growth was flat with services falling, due to a weak month for health, retailing and wholesaling, offset by widespread growth in manufacturing.”
Ashley Webb, UK economist at Capital Economics, said: “Overall, today’s release doesn’t change our view that the Bank will keep interest rates on hold at 5.00% at the next policy meeting in September.
“But with the timely PMI data suggesting GDP growth slowed at the beginning of Q3, at the margin this lends a bit more support to our view that interest rates will be cut twice more this year, to 4.50%.”
In equity markets, insurance group Admiral surged to the top of the FTSE 100 as it posted a better-than-expected 32% rise in half-year pre-tax profits to £310m, driven by an improved current year underwriting performance and claims releases.
It also declared an interim dividend of 71p a share including a special payout of 19.7p a share, up 39%. Analysts had forecast profit of £304m and a dividend of 67.3p.
DCC was boosted by an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets following recent weakness.
“Whilst we expect trading in Healthcare and especially Technology to remain tough, there is recovery potential over time,” RBC said.
Magners and Tennent’s owner C&C Group gained after saying it was on course to achieve its earnings expectations for the full year.
On the downside, Abrdn, Anglo American, Rio, Barclays, Shell, HSBC and Smurfit Westrock all fell as they traded without entitlement to the dividend.
OSB Group tumbled as it downgraded its net interest margin outlook. It said it now expects full-year underlying net interest margin of 230 to 240 basis points amid increased competition in the “subdued” mortgage market.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Admiral Group Plc | +7.22% | +203.00 | 3,013.00 |
| 2 |  |
Gen.acc.8se.pf | +1.78% | +2.50 | 143.00 |
| 3 |  |
Banco Santander S.a. | +1.59% | +5.50 | 352.50 |
| 4 |  |
Mondi Plc | +1.42% | +20.50 | 1,459.50 |
| 5 |  |
Aib Group Plc | +1.41% | +6.00 | 432.50 |
| 6 |  |
Aviva Plc | +1.34% | +6.60 | 498.40 |
| 7 |  |
Reckitt Benckiser Group Plc | +1.04% | +44.00 | 4,275.00 |
| 8 |  |
Astrazeneca Plc | +1.02% | +132.00 | 13,034.00 |
| 9 |  |
Bp Plc | +1.02% | +4.45 | 441.45 |
| 10 |  |
Standard Chartered Plc | +1.01% | +7.40 | 741.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Bp 9% 2nd Prf | -3.92% | -6.50 | 159.50 |
| 2 |  |
Rio Tinto Plc | -3.00% | -145.50 | 4,707.50 |
| 3 |  |
Flutter Entertainment Plc | -2.35% | -380.00 | 15,820.00 |
| 4 |  |
Anglo American Plc | -1.80% | -39.50 | 2,158.50 |
| 5 |  |
Spirax Group Plc | -1.39% | -105.00 | 7,460.00 |
| 6 |  |
Taylor Wimpey Plc | -1.13% | -1.85 | 162.40 |
| 7 |  |
Rolls-royce Holdings Plc | -0.80% | -4.00 | 495.10 |
| 8 |  |
Wheaton Precious Metals Corp. | -0.77% | -35.00 | 4,490.00 |
| 9 |  |
Auto Trader Group Plc | -0.69% | -5.60 | 805.00 |
| 10 |  |
Barclays Plc | -0.68% | -1.50 | 220.10 |
US close: Stocks higher following July CPI reading
Wall Street stocks closed higher on Wednesday as market participants digested key inflation data.
At the close, the Dow Jones Industrial Average was up 0.61% at 40.008.39, while the S&P 500 advanced 0.38% to 5,455.21 and the Nasdaq Composite saw out the session 0.03% firmer at 17,192.60.
The Dow closed 242.75 points higher on Wednesday, extending gains recorded in the previous session.
Wednesday’s primary focus was last month’s consumer price index reading, which revealed the cost of living in the US rose at its slowest pace in over three years last month. According to the Department of Labor, the consumer price index increased at a month-on-month clip of 0.2% at both the headline and core levels, as expected by economists. The annual rate of increase in headline CPI, however, slipped from 3.0% for June to 2.9% in July – its slowest pace since March 2021.
Wednesday’s CPI reading comes a day after the Bureau of Labor Statistics revealed that producer prices increased 0.1% to 144.67 points in July, up from 144.53 in June but short of preliminary estimates for a 0.2% month-on-month uptick. On an annualised basis, PPI was up 2.2%.
Elsewhere on the macro front, mortgage applications surged 16.8% in the week ended 9 August, according to the Mortgage Bankers Association, the sharpest week-on-week increase since January 2023. Applications to refinance a home soared 35%, while applications to purchase a home were up a much more modest 3%.
In the corporate space, gambling giant Flutter was in the green after posting Q2 results that came in ahead of expectations, while Mars confirmed that it has agreed to buy Pringles and Cheez-It maker Kellanova in a $35.9bn deal, and Victoria’s Secret shares rose after announcing the appointment of its new CEO and posting preliminary quarterly results that came in ahead of previous forecasts.
Thursday newspaper round-up: Wiz, Port Talbot, John Lewis
Cybersecurity firm Wiz, which last month rejected a $23bn (£18bn) takeover bid from Google’s parent company, Alphabet, is to open a European headquarters in London – a move that is a major shot in the arm for the UK’s aspiration to be a global tech hub. The new office, the company’s first in Europe, will be run by co-founder and research and development head, Roy Reznik, who is relocating from Israel to the UK capital to underscore the company’s business ambitions in the region. – Guardian
Uncertainty over the future of Tata Steel in south Wales is already causing job losses in the broader industry, the Welsh secretary has warned, as the government scrambles to reduce the toll of redundancies in Port Talbot. Speaking on Wednesday ahead of announcing the first £13.5m tranche of funding to support laid-off workers, the secretary of state for Wales, Jo Stevens, criticised the former Conservative government for what she said was a failure to prepare for the possibility of thousands of jobs losses at Port Talbot. – Guardian
John Lewis is set to put storeroom workers on its shop floors in a race to improve customer service and win back sales. The company said it will no longer have separate backroom workers and shop floor staff in order to free up more employees to work on checkouts and serve customers in fitting rooms, for example. – Telegraph
Elon Musk’s artificial intelligence start-up has unveiled a new chatbot which, it claims, matches the performance of rivals such as ChatGPT. xAI described the chatbot, Grok-2, as a “significant step forward” for the company and said that it was on a par with the AI models of Google, OpenAI and Anthropic. – The Times
The Treasury has insisted it remains in “positive discussions” with AstraZeneca over the pharmaceutical company’s planned £450 million investment in a vaccine manufacturing facility in northwest England. Doubts over the investment have surfaced following a report that the Treasury has sought to cut the amount of state support for the project to £40 million, below the at least £65 million Jeremy Hunt, the former chancellor, is understood to have verbally offered AstraZeneca to expand its nasal flu vaccines plant in Speke. – The Times
