London midday: Stocks stay up after UK GDP data

(Sharecast News) - London stocks were still in the black by midday on Friday after data showed the UK economy returned to growth in November, as investors mulled the latest earnings from US banking behemoths Bank of America and JPMorgan Chase. The FTSE 100 was up 0.5% at 7,612.35. Meanwhile, oil prices rose after the UK and the US launched air strikes against Houthi rebels in Yemen in response to attacks on ships in the Red Sea. Brent Crude breached the $80 a barrel mark, up 4%.

On home shores, figures released earlier by the Office for National Statistics showed GDP grew by 0.3% following a 0.3% contraction in October. This was ahead of economists' expectations of a 0.2% expansion.

The ONS said most of the growth was down to the services sector, which expanded 0.4% in November, having shrunk 0.1% in October.

In the three months to November, however, GDP was estimated to have fallen by 0.2% on the previous three-month period. Economists were expecting a 0.1% drop.

ONS chief economist Grant Fitzner said of the latest data: "The economy contracted a little over the three months to November, with widespread falls across manufacturing industries, which were partially offset by increases in public services, which saw less impact from strike action.

"GDP bounced back in the month of November, however, led by services with retail, car leasing and computer games companies all having a buoyant month.

"The longer-term picture remains one of an economy that has shown little growth over the last year."

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The UK's economy squeezed out a small drop of economic juice in November, with month-on-month GDP rising to 0.3%, from minus 0.3% in October. This could be a sign that people were getting ready for Christmas early, and all eyes will now be on how December itself shaped up, once consumers had potentially emptied their wallets on Black Friday deals.

"A sluggish metabolism has become the new norm for the UK as higher interest rates and deep-rooted productivity problems continue to bite. The lack of meaningful movement, in theory, adds weight to hopes that the Bank of England will be comfortable holding interest rates where they are, but there are unfortunately some more hoops to jump through before that becomes a certainty.

"Inflation's moving in the right direction but still isn't where it needs to be, and that's a major blocker to looser monetary policy being allowed through."

Investors were also digesting fourth-quarter earnings from Bank of America and JPMorgan Chase across the pond.

In UK equity markets, oil giants Shell and BP gushed higher as oil prices jumped.

Oil industry services company Wood Group rallied as it said full-year adjusted core earnings would be slightly ahead of expectations on the back of a strong order book.

In broker note action, Bunzl was boosted by an upgrade to 'equalweight' at Morgan Stanley.

On the downside, luxury fashion group Burberry tumbled as it delivered a significant profit warning on the back of the well-cited slowdown in luxury demand that has rocked the industry over recent months.

The company now expects adjusted operating profit for the financial year to 30 March 2024 to be between £410m and £460m, well below the £552m to £668m range guided to at its interim results just two months ago.

Airlines flew lower, with BA and Iberia owner IAG, easyJet and Wizz all down, while cruise operator Tui also lost ground amid geopolitical tensions.

UK housebuilder Vistry gave up earlier gains to trade a little lower, despite saying its 2023 financial performance would be ahead of expectations, driven by strong forward sales.

Market Movers

FTSE 100 (UKX) 7,612.35 0.47% FTSE 250 (MCX) 19,178.40 0.37% techMARK (TASX) 4,283.70 0.63%

FTSE 100 - Risers

JD Sports Fashion (JD.) 113.70p 3.08% Rightmove (RMV) 560.80p 2.00% Endeavour Mining (EDV) 1,453.00p 1.96% Melrose Industries (MRO) 582.40p 1.85% Rolls-Royce Holdings (RR.) 302.40p 1.82% Shell (SHEL) 2,485.00p 1.66% BAE Systems (BA.) 1,181.00p 1.50% Imperial Brands (IMB) 1,883.50p 1.35% Bunzl (BNZL) 3,236.00p 1.31% Spirax-Sarco Engineering (SPX) 9,868.00p 1.31%

FTSE 100 - Fallers

Burberry Group (BRBY) 1,231.50p -9.48% International Consolidated Airlines Group SA (CDI) (IAG) 143.90p -3.16% Ocado Group (OCDO) 647.20p -2.15% Informa (INF) 751.40p -1.85% Centrica (CNA) 150.10p -1.48% Diageo (DGE) 2,777.50p -1.35% Marks & Spencer Group (MKS) 260.30p -1.14% SSE (SSE) 1,790.50p -0.80% Ashtead Group (AHT) 4,876.00p -0.49% Kingfisher (KGF) 216.80p -0.41%

FTSE 250 - Risers

Wood Group (John) (WG.) 161.60p 5.97% Hochschild Mining (HOC) 91.70p 4.56% Future (FUTR) 761.00p 4.46% Tullow Oil (TLW) 33.50p 4.04% Trustpilot Group (TRST) 169.00p 3.36% TI Fluid Systems (TIFS) 145.80p 3.26% PureTech Health (PRTC) 192.00p 3.23% TBC Bank Group (TBCG) 2,875.00p 2.86% Genuit Group (GEN) 384.50p 2.67% Ashmore Group (ASHM) 221.20p 2.60%

FTSE 250 - Fallers

easyJet (EZJ) 499.70p -2.82% Wizz Air Holdings (WIZZ) 2,074.00p -2.67% TUI AG Reg Shs (DI) (TUI) 558.00p -2.62% Quilter (QLT) 99.90p -2.35% FDM Group (Holdings) (FDM) 427.00p -2.06% Derwent London (DLN) 2,198.00p -1.87% Persimmon (PSN) 1,425.00p -1.45% Vietnam Enterprise Investments (DI) (VEIL) 554.00p -1.25% Bellevue Healthcare Trust (Red) (BBH) 153.00p -1.16% Close Brothers Group (CBG) 680.50p -1.02%