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London midday: Stocks pare gains as travel sector drops

London stocks had pared gains by midday on Tuesday amid weakness in the travel sector, as investors digested the latest UK GDP data.
The FTSE 100 was up just 0.1% at 7,116.53 .

Figures released earlier by the Office for National Statistics showed the UK economy expanded by 5.5% between April and June on a quarterly basis, up from a preliminary estimate of 4.8% growth. This leaves GDP 3.3% below pre-pandemic levels, up from a previous estimate of 4.4% below.

The ONS said that in output terms, the largest contributors to the increase were from wholesale and retail trade, accommodation and food service activities, education and human health, and social work activities.

The data showed that household spending jumped 7.9% to £24.6bn.

Pantheon Macroeconomics said the upward revision to GDP brings the UK economy’s performance in line with other G7 economies. “The 3.3% shortfall in GDP from its Q4 2019 peak now is identical to that seen in Germany, similar to the 3.2% shortfall in France, and better than the 3.8% shortfall in Italy,” said economist Samuel Tombs.

However, he also noted that the revision was mainly driven by some methodological changes to the measurement of output in the health and education sectors.

In equity markets, Diageo was the standout gainer on the top-flight index after saying it made a strong start to the financial year, with “organic net sales momentum across all regions” despite supply chain problems. The drinks company’s North American business is performing strongly based on resilient consumer demand, robust off-trade activity and good momentum in the on-trade business. Africa, Asia Pacific and Latin America are performing well, the company said.

Miners were also strong, with Anglo American, BHP and Rio all firmer.

IP Group racked up healthy gains after saying it had realised around £84m through the IPO of Oxford Nanopore.

On the downside, travel and airline stocks slumped, with British Airways and Iberia owner IAG, Wizz Air, easyJet and Tui all down. Traders pointed to news that 16 major airlines have committed to better information and timely reimbursement of passengers in case of flight cancellations following dialogues with the European Commission and national consumer protection authorities. EasyJet, British Airways, Iberia and Wizz were reported to be among those involved.

Elsewhere, Barratt Developments, British American Tobacco, Hays, Travis Perkins, TP ICAP and LXI REIT were all weaker as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,116.53 0.12%
FTSE 250 (MCX) 23,120.94 -0.13%
techMARK (TASX) 4,658.50 0.03%

FTSE 100 – Risers

Diageo (DGE) 3,633.00p 2.01%
Anglo American (AAL) 2,604.50p 1.88%
Smiths Group (SMIN) 1,443.00p 1.55%
Evraz (EVR) 585.60p 1.53%
AstraZeneca (AZN) 8,957.00p 1.40%
BHP Group (BHP) 1,887.60p 1.39%
Rio Tinto (RIO) 4,886.00p 1.36%
Pearson (PSON) 719.80p 1.04%
Relx plc (REL) 2,179.00p 1.02%
Intertek Group (ITRK) 4,973.00p 1.00%

FTSE 100 – Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 177.42p -4.96%
Barratt Developments (BDEV) 646.40p -3.55%
Melrose Industries (MRO) 173.70p -3.26%
Rolls-Royce Holdings (RR.) 139.94p -3.22%
British American Tobacco (BATS) 2,662.50p -2.70%
Next (NXT) 8,192.00p -2.41%
Associated British Foods (ABF) 1,879.50p -2.01%
Sainsbury (J) (SBRY) 285.00p -1.89%
Royal Mail (RMG) 430.50p -1.49%
Whitbread (WTB) 3,340.00p -1.36%

FTSE 250 – Risers

Trustpilot Group (TRST) 378.60p 5.99%
Oxford Biomedica (OXB) 1,520.00p 3.40%
IP Group (IPO) 140.60p 3.38%
CMC Markets (CMCX) 285.00p 3.07%
Ferrexpo (FXPO) 326.80p 2.77%
AJ Bell (AJB) 402.40p 2.29%
Dechra Pharmaceuticals (DPH) 4,848.00p 2.06%
Indivior (INDV) 218.40p 2.06%
Apax Global Alpha Limited (APAX) 227.50p 2.02%
IG Group Holdings (IGG) 810.50p 1.95%

FTSE 250 – Fallers

Hays (HAS) 163.00p -6.05%
Cineworld Group (CINE) 77.54p -6.03%
Wizz Air Holdings (WIZZ) 5,006.00p -4.87%
easyJet (EZJ) 648.60p -4.62%
Virgin Money UK (VMUK) 204.40p -4.13%
Travis Perkins (TPK) 1,540.00p -4.11%
National Express Group (NEX) 239.60p -3.54%
TUI AG Reg Shs (DI) (TUI) 324.70p -3.19%
TP Icap Group (TCAP) 160.98p -3.11%
Mitchells & Butlers (MAB) 236.40p -2.88%

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