London close: Modest gains for stocks after Q4 US GDP data

London stocks were modestly higher on Thursday amid well-received updates from the likes of 3i or Intermediate Capital Group.

A preliminary reading for economic growth in the fourth quarter across the Pond that some economists said kept alive the hopes of a so-called 'soft landing' also buoyed investors spirits.

The FTSE 100 ended up 0.21% at 7,7761.11 and the FTSE 250 was 0.56% stronger to 19,915.51.

Cable was basically flat alongside and the yield on longer-dated Gilts was up by seven basis points to 3.317%.

"As momentum fades, we expect the U.S. to slip into a mild recession later this year, although risks are tilted toward a “soft landing” given the resilience of the labor market," said Mickey Levy, economist at Berenberg Capital Markets.

"Looking ahead, restrictive Fed policy and the past tightening in financial conditions will lead GDP to flatline in Q1 before a mild recession starts in Q2," said Oren Klachkin, lead US economist at Oxford Economics.

"Hope for a soft landing is alive, but the Fed's track record of achieving this favorable outcome is not encouraging."

On home shores, the latest survey from the Confederation of British Industry showed that retail sales fell sharply in January, reversing festive gains.

According to the CBI Distributive Trades Survey, the net sales volumes balance was -23 in January, compared to 11 a month previously. It was the fastest decline since April 2022.

Volumes were also expected to continuing falling into February, although at a slower pace, with a balance of -15.

A net balance is the weighted difference between the percentage of respondents reporting an increase and those reporting a decrease.

Retail sales were seen as broadly typical for the time of year, at -3. But orders placed with suppliers were down sharply in the year to January, at -32 against -21 in December.

Martin Sartorius, principal economist at the CBI, said: "Retailers began the new year with a return to falling sales volumes, as the sector continues to face the twin headwinds of rising costs and squeezed household incomes."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Households have started this year in belt-tightening mode, as worries about job losses, higher mortgage rates and another jump in energy prices in April dominate their spending decisions.

"This is a disappointing outcome, given the potential for a partial recovery in January after a combination of snow and strike across both the rail and postal sectors weighed temporarily on spending in December.

"With both sales and margins set to come under pressure over the coming months, 2023 will be a tough year for most retailers."

In equity markets, 3i Group hit fresh all-time highs as it hailed a positive third quarter and said it was on track to deliver "another year of good growth".

Prudential was in the black as the insurer and investment manager said it had received approval from Macau to open a branch of its Hong Kong business there.

Equipment rental firm Ashtead rose after well-received results from US peer United Rentals.

Tate & Lyle gained after it backed its full-year guidance as it said third-quarter trading was consistent with the first half.

Intermediate Capital Group and IG Group also pushed higher after well-received results, especially the former.

On the downside, Diageo slumped despite saying it had made a good start to the current year, after interim sales fizzed.

Wizz Air fell even as the Hungary-based budget airline said it narrowed losses in the third quarter on the back of fare increases and higher booking volumes. EasyJet was also in the red. Airlines had a strong day on Wednesday after easyJet said it expected to beat full-year profit expectations.

Market Movers

FTSE 100 (UKX) 7,761.11 0.21%
FTSE 250 (MCX) 19,915.51 0.56%
techMARK (TASX) 4,429.98 0.13%

FTSE 100 - Risers

3i Group (III) 1,594.00p 9.18%
Ashtead Group (AHT) 5,268.00p 4.28%
Hargreaves Lansdown (HL.) 883.60p 3.49%
Lloyds Banking Group (LLOY) 52.50p 3.04%
Kingfisher (KGF) 270.50p 2.85%
Prudential (PRU) 1,371.50p 2.81%
Abrdn (ABDN) 210.60p 2.68%
Beazley (BEZ) 662.50p 2.55%
Standard Chartered (STAN) 719.40p 2.48%
JD Sports Fashion (JD.) 164.40p 2.33%

FTSE 100 - Fallers

Diageo (DGE) 3,472.00p -5.52%
Convatec Group (CTEC) 233.20p -2.26%
Ocado Group (OCDO) 683.00p -2.01%
Glencore (GLEN) 549.50p -1.61%
AstraZeneca (AZN) 10,644.00p -1.54%
British American Tobacco (BATS) 3,030.00p -1.05%
Imperial Brands (IMB) 2,007.00p -0.94%
Coca-Cola HBC AG (CDI) (CCH) 1,912.50p -0.80%
Flutter Entertainment (CDI) (FLTR) 12,660.00p -0.78%
RS Group (RS1) 937.00p -0.74%

FTSE 250 - Risers

Intermediate Capital Group (ICP) 1,385.00p 6.78%
Tate & Lyle (TATE) 765.00p 6.11%
Dr. Martens (DOCS) 140.50p 4.69%
Octopus Renewables Infrastructure Trust (ORIT) 102.00p 4.52%
OSB Group (OSB) 528.50p 3.93%
Petershill Partners (PHLL) 170.00p 3.66%
Direct Line Insurance Group (DLG) 178.80p 3.65%
Moneysupermarket.com Group (MONY) 224.60p 3.50%
Hammerson (HMSO) 27.98p 3.44%
Dunelm Group (DNLM) 1,125.00p 3.21%

FTSE 250 - Fallers

Wizz Air Holdings (WIZZ) 2,796.00p -7.17%
Baltic Classifieds Group (BCG) 152.00p -3.18%
TBC Bank Group (TBCG) 2,350.00p -2.89%
Drax Group (DRX) 642.50p -2.36%
Oxford Instruments (OXIG) 2,290.00p -2.14%
TUI AG Reg Shs (DI) (TUI) 184.45p -1.99%
Ascential (ASCL) 256.80p -1.98%
Energean (ENOG) 1,225.00p -1.92%
Ferrexpo (FXPO) 170.70p -1.90%
PureTech Health (PRTC) 260.00p -1.89%