|CATEGORY: MARKET REPORT - MIDDAY
Thu 24 Aug 2017
LONDON (SHARECAST) - (ShareCast News) - London stocks were holding on to small gains by midday on Thursday, helped along by a solid performance in the mining sector even as the latest reading on the UK economy confirmed sluggish growth in the second quarter.
The FTSE 100 was up 0.4% to 7,412.29, with heavily-weighted miners contributed much of the gains. Rio Tinto, BHP Billiton and Antofagasta were all in the green.
Meanwhile, the pound was up 0.3% versus the euro to 1.0874, having fallen to an eight-year low against the single currency on Wednesday, and 0.2% higher versus the dollar at 1.2822.
The Office for National Statistics confirmed in its second estimate that UK GDP rose 0.3% in the three months to June compared to the previous quarter, up from 0.2% in the first quarter but remaining among the lowest in Europe amid a slowdown in household spending and business investment, with growth largely dependent on government spending.
Low UK growth, which is half that of the 0.6% generated in the eurozone in the same quarter and makes Britain the slowest growing G7 economy this year, came amid a slowdown in growth in household spending to just 0.1% from 0.4% in the first quarter and with no growth in business investment after the 0.6% expansion in the first three months of the year.
Private consumption growth slowed to its weakest rate since the end of 2014, not helped as real wages fell 0.5% in the quarter in spite of a 42-year low in unemployment, while government spending and public investment were fairly strong in the quarter.
Oanda analyst Craig Erlam said: "It's clear that while the economy has not nose-dived, it is suffering in the aftermath of the Brexit vote. The pound fell initially after the data but quickly recovered to trade off its lows just below 1.28 against the dollar. The pair remains under pressure though and should this support break, 1.26 could be on the cards."
Meanwhile, the latest quarterly distributive trades survey from the Confederation of British Industry showed retail sales in the UK unexpectedly fell in the year to August as inflation continues to bite. The retail sales balance fell to -10 - its lowest level since July 2016 - from +22 the month before and missing expectations for a reading of +20.
In corporate news, Dixons Carphone bucked the positive trend, tumbling after warning that profits for the full year will be well short of expectations due to a new business model of its sales software, while also saying the UK mobile phone was proving "more challenging".
Gambling software development company Playtech fell despite saying revenues jumped 30% at constant currencies in its first half to €421.6m, with adjusted EBITDA rising 24% by the same measure to €170.9m.
Greencore was in the red as it tried to reassure investors it was on track following recent share price weakness. The company said it was not aware of any developments since its third-quarter update that changed the outlook.
EasyJet flew lower after a downgrade to 'underperform' at Exane BNP Paribas, while Carnival, Mondi, Prudential, Hikma, Berkeley Group, and Cineworld were all weaker as their stock went ex-dividend. Dixons Carphone was also ex-div on Thursday.
It wasn't all bad news, however, with building materials group CRH rallying as it posted a 27% jump in first-half pre-tax profit and announced an agreement to sell its Americas distribution division to Beacon Roofing Supply for $2.63bn in cash.
Subprime lender Provident Financial surged 20%, recouping some of its losses from earlier in the week when it tanked 66% on the back of a quadruple whammy of bad news that included a profit warning.
OneSavings edged higher after posting a 20% increase in underlying first-half pre-tax profit to £78.4m, beating expectations of £76.8m.
Oilfield services company Hunting gushed higher as it reported a narrower loss for the first half, while Phoenix Group was on the front foot after posting a jump in first-half operating profit.
Still to come, investors will be turning their attention to the Jackson Hole symposium that kicks off later in the day.
FTSE 100 (UKX) 7,412.29 0.40%
FTSE 250 (MCX) 19,746.80 0.02%
techMARK (TASX) 3,394.28 0.09%
FTSE 100 - Risers
Provident Financial (PFG) 794.50p 20.20%
CRH (CRH) 2,767.00p 2.86%
British American Tobacco (BATS) 4,836.00p 2.27%
WPP (WPP) 1,450.00p 2.11%
Persimmon (PSN) 2,623.00p 1.67%
Standard Chartered (STAN) 779.20p 1.59%
Mediclinic International (MDC) 747.50p 1.56%
Old Mutual (OML) 208.80p 1.41%
Imperial Brands (IMB) 3,241.50p 1.36%
Taylor Wimpey (TW.) 196.90p 1.34%
FTSE 100 - Fallers
easyJet (EZJ) 1,224.00p -3.62%
Marks & Spencer Group (MKS) 316.90p -1.77%
Paddy Power Betfair (PPB) 6,930.00p -1.00%
Whitbread (WTB) 3,771.00p -0.79%
G4S (GFS) 291.70p -0.78%
TUI AG Reg Shs (DI) (TUI) 1,320.00p -0.75%
Babcock International Group (BAB) 810.50p -0.67%
Shire Plc (SHP) 3,720.50p -0.55%
Associated British Foods (ABF) 3,174.00p -0.50%
Lloyds Banking Group (LLOY) 65.12p -0.43%
FTSE 250 - Risers
Carillion (CLLN) 46.00p 8.08%
Hunting (HTG) 435.20p 4.19%
Ashmore Group (ASHM) 371.80p 3.02%
Sophos Group (SOPH) 509.00p 2.89%
Ferrexpo (FXPO) 293.20p 2.84%
Vesuvius (VSVS) 586.50p 2.80%
William Hill (WMH) 250.10p 2.46%
Phoenix Group Holdings (DI) (PHNX) 790.00p 2.27%
OneSavings Bank (OSB) 400.00p 2.22%
Mitchells & Butlers (MAB) 250.50p 2.20%
FTSE 250 - Fallers
Dixons Carphone (DC.) 181.60p -22.82%
AA (AA.) 169.80p -3.58%
CLS Holdings (CLI) 210.00p -3.45%
Greencore Group (GNC) 201.80p -2.98%
JD Sports Fashion (JD.) 324.90p -2.61%
Euromoney Institutional Investor (ERM) 1,079.00p -2.18%
Nostrum Oil & Gas (NOG) 386.30p -1.95%
Cineworld Group (CINE) 659.00p -1.57%
Restaurant Group (RTN) 347.20p -1.42%
Sports Direct International (SPD) 393.70p -1.40%