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London open: Stocks dip as investors mull GDP data
London stocks nudged lower in early trade on Friday as investors mulled the latest UK GDP data.
At 0820 BST, the FTSE 100 was down 0.1% at 8,230.93.
Figures released earlier by the Office for National Statistics showed the UK economy returned to growth in August.
GDP rose 0.2% following no growth in June and July, in line with economists’ expectations.
Services output grew 0.1% in August following an increase of 0.1% in July, while production output rose 0.5% following a revised 0.7% decline the month before.
Output in construction was up 0.4% in August following a 0.4% drop In July.
ONS director of economic statistics, Liz McKeown, said: “All main sectors of the economy grew in August, but the broader picture is one of slowing growth in recent months, compared to the first half of the year.
“In August, accountancy, retail and many manufacturers had strong months, while construction also recovered from July’s contraction. These were partially offset by falls in wholesaling and oil extraction.”
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “The FTSE has opened down a touch, as investors digest news that the UK economy returned to growth in August. The Office for National Statistic’s estimates that real GDP grew by 0.2% after two months of stagnation. This small rebound in growth was largely expected, but the lacklustre reaction echoes global markets’ struggle to find a clear direction.
“That’s perhaps unsurprising given high levels of geo-political tension, an upcoming US election and continued concerns about growth in China.”
In equity markets, Sainsbury’s was under the cosh after its biggest shareholder, Qatar Investment Authority, placed 109m shares in the supermarket chain.
The shares were placed via Goldman Sachs at 280p each, which is a discount of around 2.8% to the closing share price on Thursday.
BP edged lower as it followed sector rival Shell and said it expected third-quarter realised refining margins to hit operating profit by $0.4bn to $0.6bn and warned its oil trading result would be weak as it felt the impact of lower crude prices.
Jupiter Fund Management lost ground after it reported lower assets under management as clients pulled £1.6bn during the third quarter.
Recruiter Hays gained even as it said it expects earnings to be sequentially lower in the first half as a result of ongoing challenging market conditions, which resulted in a big drop in fees in the first quarter.
Indivior was also on the front foot, having tanked on Thursday after cutting its full-year revenue forecast for the second time following a weaker-than-expected third-quarter performance from Sublocade, its treatment of moderate to severe opioid use disorder.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Wise Plc | +2.13% | +14.00 | 670.00 |
| 2 |  |
Pershing Square Holdings Ltd | +1.31% | +46.00 | 3,566.00 |
| 3 |  |
Flutter Entertainment Plc | +1.04% | +190.00 | 18,375.00 |
| 4 |  |
Diploma Plc | +1.00% | +42.00 | 4,244.00 |
| 5 |  |
Whitbread Plc | +0.94% | +29.00 | 3,108.00 |
| 6 |  |
Anglo American Plc | +0.85% | +19.50 | 2,318.50 |
| 7 |  |
Mondi Plc | +0.84% | +12.00 | 1,446.50 |
| 8 |  |
Banco Santander S.a. | +0.80% | +3.00 | 380.00 |
| 9 |  |
Smiths Group Plc | +0.75% | +12.00 | 1,615.00 |
| 10 |  |
Halma Plc | +0.69% | +17.00 | 2,498.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Sainsbury (j) Plc | -4.24% | -12.20 | 275.80 |
| 2 |  |
Croda International Plc | -1.15% | -47.00 | 4,038.00 |
| 3 |  |
Reckitt Benckiser Group Plc | -1.09% | -51.00 | 4,625.00 |
| 4 |  |
Rolls-royce Holdings Plc | -0.91% | -4.80 | 525.20 |
| 5 |  |
Prudential Plc | -0.81% | -5.60 | 682.60 |
| 6 |  |
Vodafone Group Plc | -0.78% | -0.58 | 74.08 |
| 7 |  |
Bt Group Plc | -0.76% | -1.10 | 144.55 |
| 8 |  |
Natwest Group Plc | -0.71% | -2.50 | 349.40 |
| 9 |  |
Tesco Plc | -0.70% | -2.50 | 356.90 |
| 10 |  |
British American Tobacco Plc | -0.63% | -17.00 | 2,683.00 |
US close: Stocks lower following September’s CPI reading
Wall Street stocks were in the red at the end of trading on Thursday as market participants digested September’s hotter-than-expected consumer price index.
At the close, the Dow Jones Industrial Average was down 0.14% at 42,454.12, while the S&P 500 lost 0.21% at 5,780.05 and the Nasdaq Composite saw out the session 0.05% weaker at 18,282.05.
The Dow closed 57.88 points lower on Thursday, taking only a small bite out of solid gains recorded in the previous session.
Thursday’s primary focus was the US consumer price index, which rose by more than expected in September, according to the Bureau of Labor Statistics. Consumer prices climbed by 0.2% on a month-on-month basis in September, more than the 0.1% increase expected by economists, while the closely watched “core” price index, which strips out volatile food and energy costs, also came in hotter than the 3.2% expected by analysts at 3.3%. The CPI inflation measure, on the other hand, cooled slightly to 2.4% on an overall basis last month, down from 2.5% in August but short of expectations for a reading of 2.3%.
Elsewhere on the macro front, Americans lined up for unemployment benefits at an accelerated pace in the week ended 5 October, according to the Labor Department. Initial jobless claims rose by 33,000 to 258,000, significantly exceeding market expectations for a reading of 230,000 with a fresh 14-month high, adding weight to arguments that the Federal Reserve Bank will likely announce interest rate cuts in each of its remaining meetings in 2024. Continuing claims increased by 42,000, while the four-week moving average, which aims to strip out week-to-week volatility, grew by 6,750 to 231,000.
Finally, the Federal Government’s monthly budget statement revealed it had spent significantly more than it had collected in revenue in the 2024 fiscal year, according to the Congressional Budget Office, racking up a budget deficit of $1.8trn.
In the corporate space, shares in Delta Air Lines came under pressure on Thursday after third-quarter earnings and sales guidance disappointed.
Friday newspaper round-up: Scottish Power, TGI Fridays, green energy firms
The leaders of the world’s biggest green energy companies have promised more than £24bn of new private investment across Great Britain ahead of a meeting with the prime minister on Friday. Keir Starmer is expected to meet the green energy bosses on the sidelines of the first Council of Nations and Regions in Edinburgh to discuss the multibillion-pound projects just days before the government’s international investment summit next week. – Guardian
Britain must prepare for the widespread use of road pricing to make up a £35bn shortfall in tax revenues from the transition to electric vehicles, the country’s top infrastructure adviser has said. Sir John Armitt, the chair of the National Infrastructure Commission (NIC), said it was time for a “proper public debate” about the future funding of the road network and other critical projects. – Guardian
Fears of a Labour tax raid have prompted entrepreneurs to speed up plans to sell their businesses ahead of a looming capital gains increase, according to new research. Three in 10 business owners with a turnover of at least £5m said they had accelerated plans to sell their companies in the past year, according to wealth manager Evelyn Partners. – Telegraph
Employers will be required by law to allow unionised staff to take part in diversity programmes during working hours as part of Angela Rayner’s sweeping overhaul of workers’ rights. The extra powers mean that so-called diversity pilgrims who work full-time on union duties can legally take time off for equality training or relevant preparation work while having any necessary accommodation costs covered. – Telegraph
The owner of Scottish Power will set out plans to double its multibillion-pound investment in Britain over the next five years, in one of the first of several deals expected to be announced as international business leaders arrive in London next week. Iberdrola, the Spanish energy group, will spend £24 billion on upgrading the high-voltage cables needed to transport power around the country and on building more wind farms, making Britain its largest destination for investment in the world. – The Times
The restaurant group TGI Fridays has agreed to pay workers the money they are owed after being made redundant, despite initially refusing to do so. More than 1,000 staff lost their jobs this week when 35 TGI Fridays branches were shut after a private equity led rescue failed. Workers were told they had been made redundant via a video call from head office with one hour’s notice. Others found out through social media platforms or turned up to work to find the restaurant padlocked, with their belongings still inside. – The Times
