London midday: Equities slip as UK GDP slows more than expected in Q3

By

Sharecast News | 27 Oct, 2015

Updated : 11:54

The UK equity market was under the cosh on Tuesday after data showed the UK economy slowed more than expected in the third quarter.

Gross domestic product rose 0.5% in the third quarter compared to 0.7% in the second quarter, well below estimates for a 0.6% increase, the Office for National Statistics revealed. On a year-on-year comparison, GDP unexpectedly eased to 2.3% from 2.4%.

The ONS said a 0.7% increase in services activity was offset by 2.2% fall in construction growth and a 0.3% drop in manufacturing production amid a slowdown in China's economy.

“The lacklustre GDP figures revealed today should come as little surprise. A relatively strong pound, coupled with a wounded Chinese economy, has dampened demand for exports," said Dennis de Jong, managing director at UFX.com.

Howard Archer, chief UK and European economist at IHS Global Insight, said the easing in GDP "reinforces our belief" that the Bank of England will hold off on raising rates until the second quarter of 2016.

Next up, a report on US durable goods orders at 1230 GMT is estimated to reveal a 1.3% fall in September, following a 2.3% drop a month earlier.

The S&P Shiller 20-City Composite Home Price Index at 1300 GMT is forecast to rise to 5.10% year-on-year in August compared to 4.96% a month earlier.

Markit’s PMI on US services at 1345 GMT is expected to rise slightly to 55.2 in October from 55.1 in September, above the 50 level that indicates expansion in the industry .

The consumer confidence index at 1400 GMT is projected to hold at 103 in October.

The Federal Reserve is taking a range of economic releases into account in determining the timing of its first interest rate hike in nearly a decade. The Fed will announce its latest policy decision on Wednesday but many analysts expect the central bank to keep rates unchanged.

On the company front, St. James Place jumped after posting a 17% rise in third-quarter net inflows to a record £1.48bn, taking funds under management to £54.5bn.

Mining stocks were under pressure, including BHP Billiton, Glencore, Antofagasta and Rio Tinto, as reports that a People's Bank of China adviser hinted at further monetary policy easing added to concerns about the health of the nation.

BP climbed as the group set out plans for maintaining dividend payments through more cuts in capital expenditure and costs after reporting a sharp fall in third quarter underlying replacement cost profit due to plunging oil prices.

DS Smith rallied after saying trading for the half year ending 31 October has been in line with its expectations.

Shire reversed the previous day’s declines after Credit Suisse cut its price target and forecasts for 2016 earnings.

Chemring Group plunged after the defence contractor warned shareholders its profit outlook for the full-year could be dented by a potential revenue delay.

Pearson dipped after Credit Suisse downgraded the education company to ‘neutral’ from ‘outperform’ and cut the price target to 970p from 1,455p.

Market Movers

FTSE 100 (UKX) 6,399.89 -0.27%
FTSE 250 (MCX) 17,109.34 -0.40%
techMARK (TASX) 3,100.81 -0.17%

FTSE 100 - Risers

Shire Plc (SHP) 4,883.00p 5.94%
BP (BP.) 387.85p 0.90%
Admiral Group (ADM) 1,639.00p 0.86%
International Consolidated Airlines Group SA (CDI) (IAG) 613.00p 0.82%
3i Group (III) 503.50p 0.78%
Legal & General Group (LGEN) 258.60p 0.74%
St James's Place (STJ) 937.00p 0.70%
London Stock Exchange Group (LSE) 2,544.00p 0.55%
Royal Mail (RMG) 455.60p 0.51%
Associated British Foods (ABF) 3,412.00p 0.50%

FTSE 100 - Fallers

Anglo American (AAL) 573.30p -2.98%
BHP Billiton (BLT) 1,105.50p -2.25%
BAE Systems (BA.) 445.20p -1.90%
BG Group (BG.) 1,031.00p -1.86%
Meggitt (MGGT) 467.30p -1.83%
Morrison (Wm) Supermarkets (MRW) 173.00p -1.70%
Tesco (TSCO) 187.60p -1.55%
Sainsbury (J) (SBRY) 267.00p -1.51%
Royal Dutch Shell 'A' (RDSA) 1,716.00p -1.49%
Pearson (PSON) 892.00p -1.44%

FTSE 250 - Risers

TalkTalk Telecom Group (TALK) 248.00p 10.08%
AO World (AO.) 161.70p 3.52%
Crest Nicholson Holdings (CRST) 562.50p 2.46%
Smith (DS) (SMDS) 394.60p 2.28%
OneSavings Bank (OSB) 368.90p 2.16%
CLS Holdings (CLI) 1,841.00p 2.11%
Ted Baker (TED) 2,988.00p 1.56%
Dignity (DTY) 2,297.00p 1.50%
Wizz Air Holdings (WIZZ) 1,900.00p 1.39%
Just Retirement Group (JRG) 163.80p 1.36%

FTSE 250 - Fallers

Tullow Oil (TLW) 190.40p -6.89%
Nostrum Oil & Gas (NOG) 451.50p -5.76%
Evraz (EVR) 83.50p -5.44%
Premier Oil (PMO) 68.35p -5.33%
Home Retail Group (HOME) 109.50p -4.78%
International Personal Finance (IPF) 392.00p -4.69%
Hunting (HTG) 367.20p -4.55%
Amec Foster Wheeler (AMFW) 709.00p -4.32%
Ophir Energy (OPHR) 90.35p -4.09%
Vedanta Resources (VED) 480.80p -3.53%

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