London stocks were still in the black by midday on Thursday amid a strong performance from the mining sector, as investors digested the latest UK GDP data.
The FTSE 100 was up 0.4% at 7,370.14, while the pound was flat against the dollar, having fallen earlier after figures from the Office for National Statistics showed that economic growth slowed in the third quarter amid supply chain issues.
GDP grew 1.3% between July and September, down from 5.5% in the second quarter and missing expectations for 1.5% growth. That leaves quarterly GDP 2.1% below where it was in the last quarter of 2019, before the pandemic hit.
GDP growth for July was revised down from a 0.1% drop to a 0.2% decline, while August’s was revised to 0.2% growth from 0.4%.
On a monthly basis for September, GDP grew 0.6%, which was ahead of the 0.4% increase expected.
Paul Dales, chief UK economist at Capital Economics, said: “The big point is that the best of the recovery is now behind us. And we think progress is going to slow over the next six to nine months as shortages remain an issue and the real spending power of businesses and households is reduced by higher taxes and rising utility prices.
“This won’t prevent the Bank from raising interest rates from +0.10% (perhaps in December), but we think it will contribute to rates going no higher than 0.50% next year.”
On the corporate front, investors were wading through a raft of earnings news.
Miners were among the best performers as copper prices rose. Chris Beauchamp, chief market analyst at IG, said: “The FTSE 100 has soared to a new high this morning as the inflation trade picks up again. As an example, copper prices have rallied almost 2% in early trading today, clawing back some ground lost over the past two days and contributing to the view that a new leg higher is about to begin for the metal.
“As a result, FTSE 100 mining stocks have made headway in the opening hours of trading, providing the index with the fuel to move higher as well. This has helped it to shrug off the poorer numbers from Johnson Matthey and the evident disappointment seen in Burberry’s share price, a remarkable contrast to Marks & Spencer yesterday.
“Inflation readings seem to be providing gold with the strength to rally further, as the metal touches $1860 for the first time since June. Commodities as a group appear to have further to run now that inflation prints have started picking up again, with no sign as yet that supply has begun to respond in a meaningful fashion.”
Auto Trader was standout gainer on the FTSE 100 after saying it had achieved its highest ever six-monthly revenue and profits following solid performances from both the trade and retail segments.
On the downside, Johnson Matthey tumbled after it announced the departure of its chief executive alongside plans to sell its battery materials business and said the trading outlook for the full year was towards the lower end of market expectations.
B&M European Value Retail fell after it reported lower half-year earnings but said its supply chain remained “robust”, despite constraints that have plagued the global economy, along with labour shortages in Britain due to Brexit.
Burberry slid even as the luxury fashion brand Burberry said revenue are now back at pre-Covid levels, as it reported a jump in interim pre-tax profit and said reinstated its dividend.
TI Fluid Systems slumped after BC Omega – which is indirectly controlled by investment funds advised by Bain Capital – sold 40m shares in the company in a placing.
Market Movers
FTSE 100 (UKX) 7,370.14 0.41%
FTSE 250 (MCX) 23,516.60 0.36%
techMARK (TASX) 4,651.06 0.31%
FTSE 100 – Risers
Auto Trader Group (AUTO) 697.60p 12.48%
Anglo American (AAL) 2,866.00p 4.73%
3i Group (III) 1,430.00p 4.72%
Polymetal International (POLY) 1,512.50p 4.38%
BHP Group (BHP) 1,957.20p 2.96%
Evraz (EVR) 627.60p 2.85%
Fresnillo (FRES) 985.20p 2.71%
Rio Tinto (RIO) 4,562.50p 2.64%
Entain (ENT) 2,015.00p 2.60%
Darktrace (DARK) 614.50p 2.50%
FTSE 100 – Fallers
Johnson Matthey (JMAT) 2,271.00p -17.81%
B&M European Value Retail S.A. (DI) (BME) 603.20p -6.31%
Burberry Group (BRBY) 1,852.50p -5.82%
ITV (ITV) 122.45p -2.70%
International Consolidated Airlines Group SA (CDI) (IAG) 169.28p -2.45%
Royal Dutch Shell ‘A’ (RDSA) 1,651.20p -1.78%
Associated British Foods (ABF) 2,023.00p -1.70%
Smiths Group (SMIN) 1,428.00p -1.65%
Whitbread (WTB) 3,284.00p -1.62%
Next (NXT) 8,136.00p -1.53%
FTSE 250 – Risers
Ferrexpo (FXPO) 308.60p 5.61%
Dechra Pharmaceuticals (DPH) 5,065.00p 5.13%
Endeavour Mining (EDV) 2,120.00p 4.43%
Centamin (DI) (CEY) 103.35p 3.52%
CMC Markets (CMCX) 264.00p 3.33%
Petropavlovsk (POG) 24.40p 3.21%
Fidelity China Special Situations (FCSS) 336.00p 2.75%
Molten Ventures (GROW) 1,012.00p 2.43%
Helios Towers (HTWS) 153.60p 2.40%
Tyman (TYMN) 389.00p 2.37%
FTSE 250 – Fallers
TI Fluid Systems (TIFS) 248.50p -9.14%
Assura (AGR) 68.90p -5.68%
TUI AG Reg Shs (DI) (TUI) 232.80p -3.80%
Hammerson (HMSO) 31.71p -3.59%
Trainline (TRN) 313.80p -2.97%
Trustpilot Group (TRST) 301.60p -2.96%
Cairn Energy (CNE) 183.60p -2.86%
Carnival (CCL) 1,574.00p -2.57%
Cineworld Group (CINE) 63.90p -2.14%
Oxford Instruments (OXIG) 2,210.00p -2.00%
