London close: Stocks rise on UK GDP, US producer price data

Stocks in London managed an upbeat finish on Thursday, propelled by easing concerns over US Federal Reserve interest rate hikes, amid focus on the latest UK GDP data and fresh US inflation figures.

The FTSE 100 ended the session up 0.32% at 7,440.21, and the FTSE 250 was ahead 0.33% at 18,641.72.

Sterling was also in positive territory, last rising 0.94% on the dollar to trade at $1.3110, while it strengthened 0.39% against the euro to change hands at €1.1713.

“Stocks have risen in the US and Europe experienced a boost on Thursday as new data on producer prices indicated a cooling of inflation in the United States,” said IG chief market analyst Chris Beauchamp.

“This development has sparked hopes that the Federal Reserve will soon put an end to its tightening of monetary policy.”

Beauchamp said the figures showed a “meagre rise” in producer prices June, with the annual increase in producer inflation being the smallest for almost three years.

“In addition, a separate report brought unexpected news that weekly jobless claims had fallen, suggesting that the labour market is still experiencing a shortage of workers.”

UK economy contracts mildly in May, US producer price inflation eases

In economic news, the UK's gross domestic product (GDP) slipped by 0.1% in May according to fresh data from the Office for National Statistics (ONS).

The downturn, although softer than the anticipated 0.3% decline by economists, followed growth of 0.2% in April.

The additional bank holiday for the King's coronation on 6 May and public sector strikes were largely credited for the contraction.

According to the ONS, the construction sector saw a 0.2% drop, subsequent to a more significant 0.9% fall in April.

Meanwhile, the production output experienced a 0.6% decline.

The influential services sector, which previously saw growth of 0.3% in April, stagnated in May, echoing the trend of the past three months.

Over the quarter to May, the production and construction sectors saw growth of 0.4% and 0.2% respectively, while GDP overall remained flat compared to the preceding three months to February.

Despite the contraction, monthly GDP was now estimated to be 0.2% higher than pre-pandemic levels

Turning to the UK housing market, a survey by the Royal Institution of Chartered Surveyors (RICS) unveiled a dramatic downturn in June.

House prices declined significantly, with a net balance of -46, compared to -30 in May.

Additionally, new buyer enquiries and newly agreed sales plummeted to their lowest since October and December respectively.

Across the pond, US producer price inflation saw a greater-than-expected decrease in June, as per the Bureau of Labor Statistics.

The annual inflation rate fell from a downwardly-revised 0.9% in May to 0.1% in June, notably below the forecast 0.4%.

The annual core consumer price inflation also fell in June to 2.4% from May's 2.8%, against expectations of 2.6%.

Finally on data, the number of Americans filing initial jobless claims fell unexpectedly last week.

According to the Labor Department, claims dropped by 12,000 to 237,000, defying predictions of an increase to 250,000.

Housebuilders suffer, Watches of Switzerland and Dr Martens surge

On London’s equity markets, housebuilders were pressure, with Barratt Developments down 1.63%, Taylor Wimpey off 0.33%, Persimmon losing 0.14%, Bellway weakening 0.39%, Crest Nicholson behind by 3.18%, and Redrow registering losses of 0.7%.

The setback came after an unfavourable update from Barratt, which flagged a more-than-20% decline in home completions.

That, combined with the RICS survey showing new house buyer inquiries hitting an eight-month low in June due to increasing mortgage rates, contributed to the sector's downturn.

Elsewhere, British American Tobacco was down 2.62%, FirstGroup was off 0.54%, and Supermarket Income REIT dropped 0.27% as they traded without entitlement to the dividend.

Hays, the professional recruiting group, also experienced a fall in its stock price of 2.11% following the announcement of a 2% decrease in quarterly fee income.

The decline, reportedly due to growing macroeconomic uncertainties, was reflected in both its total and like-for-like basis in the quarter ended 30 June.

Dr Martens shares reversed earlier gains to slip 0.4%, even after the company's announcement that trading since the start of the current financial year had been consistent with expectations.

The iconic bootmaker also noted progress in resolving the US warehousing debacle that previously led to several profit warnings.

On the upside, Watches of Switzerland ticked 10.76% higher after the company reported significant increases in its full-year sales and profits.Diploma saw an uptick in its shares of XXX after announcing its acquisition of DICSA, a distributor of fluid power solutions into the European Seals aftermarket, for £170m.

Softcat's shares were boosted 5.34% following an upgrade to 'buy' at Citi.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,440.21 0.32%
FTSE 250 (MCX) 18,641.72 0.33%
techMARK (TASX) 4,378.46 -0.08%

FTSE 100 - Risers

Convatec Group (CTEC) 207.20p 2.88%
Glencore (GLEN) 469.65p 2.47%
Ocado Group (OCDO) 622.80p 2.37%
Antofagasta (ANTO) 1,547.00p 2.08%
M&G (MNG) 194.20p 2.02%
Prudential (PRU) 1,080.50p 1.98%
Entain (ENT) 1,274.00p 1.92%
Anglo American (AAL) 2,365.00p 1.72%
Smurfit Kappa Group (CDI) (SKG) 2,844.00p 1.72%
Rio Tinto (RIO) 5,228.00p 1.71%

FTSE 100 - Fallers

British American Tobacco (BATS) 2,523.00p -2.62%
Barratt Developments (BDEV) 411.20p -1.63%
Bunzl (BNZL) 2,783.00p -1.17%
B&M European Value Retail S.A. (DI) (BME) 545.60p -1.16%
Berkeley Group Holdings (The) (BKG) 3,998.00p -1.02%
Vodafone Group (VOD) 71.93p -0.99%
Associated British Foods (ABF) 2,046.00p -0.97%
BT Group (BT.A) 124.50p -0.84%
InterContinental Hotels Group (IHG) 5,388.00p -0.77%
Smith & Nephew (SN.) 1,169.00p -0.72%

FTSE 250 - Risers

Watches of Switzerland Group (WOSG) 710.50p 10.76%
Softcat (SCT) 1,461.00p 5.34%
Caledonia Investments (CLDN) 3,290.00p 4.94%
Domino's Pizza Group (DOM) 306.20p 4.65%
Renishaw (RSW) 3,900.00p 3.89%
W.A.G Payment Solutions (WPS) 97.60p 3.83%
HGCapital Trust (HGT) 389.50p 3.73%
Diploma (DPLM) 3,070.00p 3.58%
Vietnam Enterprise Investments (DI) (VEIL) 599.00p 3.28%
4Imprint Group (FOUR) 4,595.00p 3.14%

FTSE 250 - Fallers

Carnival (CCL) 1,231.50p -4.72%
Digital 9 Infrastructure NPV (DGI9) 51.50p -4.10%
Crest Nicholson Holdings (CRST) 182.60p -3.18%
Wetherspoon (J.D.) (JDW) 708.00p -3.15%
Sirius Real Estate Ltd. (SRE) 84.85p -2.92%
PureTech Health (PRTC) 218.50p -2.89%
Aston Martin Lagonda Global Holdings (AML) 321.60p -2.72%
Dunelm Group (DNLM) 1,046.00p -2.70%
Elementis (ELM) 105.00p -2.60%
Spirent Communications (SPT) 168.90p -2.37%