London midday: Stocks maintain mild gains as Brexit talks eyed
London stocks were still a little higher by midday on Friday as investors digested the latest UK GDP figures, with all eyes on the resumption of Brexit talks.
The FTSE 100 was 0.3% firmer at 6,019.56, while the pound was up 0.2% against the dollar at 1.2830.
Spreadex analyst Connor Campbell said: "Neither the FTSE nor pound made much of Friday’s UK data.
"Waiting to see who will blink first in the high stakes game of chicken that is the UK-EU trade talks, the currency and index alike weren’t ready to make any sudden movements."
Talks between both sides were set to resume despite the UK's rejection the EU’s ultimatum to ditch plans to override the withdrawal agreement.
Meanwhile, figures released earlier by the Office for National Statistics showed the economy continued to recover in July but remains below pre-pandemic levels.
The economy grew 6.6% in July following 8.7% growth in June and a 2.4% increase in May, coming in just below expectations for a 6.7% increase. This compares to a record 20% contraction in April in the aftermath of the imposition of full lockdown.
GDP has recovered 18.6% from the April low but is still 11.7% below its pre-Covid peak.
Thomas Pugh, UK economist at Capital Economics, said the monthly rise in GDP, although a little slower than July, "still suggests that the record-breaking negative growth rate of GDP in Q2 will be followed by a record-breaking positive growth rate in Q3".
"However, July was probably the last of the big step ups in activity and a full recovery probably won’t be achieved until early 2022, which is why we think the Bank of England will yet expand QE by a further £250bn in total."
In equity markets, London Stock Exchange was a high riser as it took a step closer to taking over data provider Refinitiv after Euronext confirmed it is in talks with Italian state lender Cassa Depositi e Prestiti about submitting an offer to LSE to buy Borsa Italiana. LSE announced in July that it had begun discussions to sell part of or all of its Borsa Italiana unit to satisfy European regulators over its acquisition of Refinitiv.
Rio Tinto was trading a little higher as it announced that chief executive Jean-Sébastien Jacques has resigned after the company’s board yielded to shareholder pressure over the destruction of sacred 46,000-year-old rock shelters in Western Australia.
Swiss iron ore company Ferrexpo racked up healthy gains after it announced a further special dividend following strong cash generation and amid solid demand.
Royal Mail was boosted by an upgrade at JPMorgan, while Essentra and Travis Perkins were lifted by upgrades at Jefferies.
On the downside, travel-related stocks were under the cosh again, with British Airways parent IAG, Premier Inn owner Whitbread and TUI all weaker after Portugal was put back on England’s quarantine list.
Ashmore was also in the red after it proposed an unchanged final dividend of 12.10p a share as the emerging markets fund manager reported a 1% increase in pre-tax profit to £221.5m for the year to the end of June.
Market Movers
FTSE 100 (UKX) 6,019.56 0.27%
FTSE 250 (MCX) 17,613.77 0.23%
techMARK (TASX) 3,833.97 0.29%
FTSE 100 - Risers
Burberry Group (BRBY) 1,551.50p 3.81%
Glencore (GLEN) 178.44p 2.09%
London Stock Exchange Group (LSE) 9,064.00p 1.96%
Flutter Entertainment (FLTR) 11,735.00p 1.95%
Fresnillo (FRES) 1,358.00p 1.91%
Anglo American (AAL) 1,898.00p 1.90%
Homeserve (HSV) 1,296.00p 1.65%
Rio Tinto (RIO) 4,862.00p 1.63%
Smurfit Kappa Group (SKG) 2,884.00p 1.62%
Intertek Group (ITRK) 6,136.00p 1.56%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 191.90p -4.24%
Morrison (Wm) Supermarkets (MRW) 182.35p -1.96%
Legal & General Group (LGEN) 195.35p -1.83%
Barclays (BARC) 103.22p -1.73%
Taylor Wimpey (TW.) 112.30p -1.58%
Lloyds Banking Group (LLOY) 26.00p -1.57%
Informa (INF) 394.80p -1.50%
Standard Chartered (STAN) 379.40p -1.45%
Compass Group (CPG) 1,275.00p -1.39%
Whitbread (WTB) 2,339.00p -1.27%
FTSE 250 - Risers
Cineworld Group (CINE) 53.50p 7.97%
Ferrexpo (FXPO) 185.30p 5.34%
Royal Mail (RMG) 232.00p 5.22%
Vivo Energy (VVO) 73.80p 5.13%
AO World (AO.) 188.00p 4.68%
Dunelm Group (DNLM) 1,402.00p 4.55%
Hammerson (HMSO) 23.88p 3.83%
Games Workshop Group (GAW) 10,120.00p 3.79%
Spirent Communications (SPT) 279.50p 3.33%
Essentra (ESNT) 291.80p 2.96%
FTSE 250 - Fallers
Ascential (ASCL) 294.00p -5.28%
Meggitt (MGGT) 263.60p -3.48%
easyJet (EZJ) 573.20p -3.24%
Babcock International Group (BAB) 242.20p -3.16%
Aston Martin Lagonda Global Holdings (AML) 58.10p -3.09%
Wood Group (John) (WG.) 222.50p -3.05%
Wizz Air Holdings (WIZZ) 3,396.00p -2.75%
SSP Group (SSPG) 230.00p -2.54%
TUI AG Reg Shs (DI) (TUI) 348.00p -2.49%
Capital & Counties Properties (CAPC) 127.80p -2.29%