London midday: FTSE maintains gains as Santa comes to town

London stocks were still in the black by midday on Thursday despite uninspiring UK GDP data, having taken their cue from a solid session on Wall Street.

The FTSE 100 was up 0.4% at 7,527.14.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "’The hoped-for Santa rally is running merrily through markets, but it may end up being a short-lived ride given the cost-of-living winds swirling, the confirmation that the UK is rolling into recession and worries about global economic growth.

"The ONS update showing the economy contracted by 0.3% in the third quarter is bleaker than first forecast but the FTSE 100 and the FTSE 250 have shrugged it off, largely because a UK recession has already been priced in.

"The optimism shooting through markets has been prompted by stronger consumer confidence in the US and sturdier than expected corporate earnings."

Figures released earlier by the Office for National Statistics showed that the economy contracted more than first estimated in the three months to September as household incomes fell.

GDP shrank 0.3% in the third quarter, versus an initial estimate of a 0.2% contraction. The figures showed that household incomes fell by 0.5% during the quarter - the fourth consecutive quarter of negative growth.

The revised data also showed that the economy grew 0.6% in the first quarter and 0.1% in the second, down from previous estimates of 0.7% and 0.2% growth, respectively.

The revisions reflect bigger falls in manufacturing and production than previously estimated. It was suggested that this might reflect changes in business and consumer behaviour in response to higher energy prices after the regulator's energy price cap rose in April.

The ONS said business investment declined 2.5% in quarterly terms, compared with an initial estimate of a 0.5% fall.

ONS director of economic statistics Darren Morgan said: "Our revised figures show the economy performed slightly less well over the last year than we previously estimated, with manufacturing and electricity generation notably weaker.

"Household incomes continued to fall in real terms, albeit at a slower rate than in the previous two quarters, while - taking account of inflation - household spending fell for the first time since the final Covid-19 lockdown in the spring of 2021."

As we head towards the Christmas break, corporate news was unsurprisingly thin on the ground, but electronics maker discoverIE Group announced the acquisition of US-based Magnasphere Corporation for $22m (£19.1m).

Magnasphere makes magnetic sensors and switches for industrial electronic applications. DiscoverIE said the acquisition is expected to be immediately accretive to group underlying earnings and underlying operating margin.

Elsewhere, real estate investment trust LondonMetric was knocked lower by a downgrade to ‘neutral’ at Citi.

Market Movers

FTSE 100 (UKX) 7,527.14 0.40%
FTSE 250 (MCX) 18,930.40 0.35%
techMARK (TASX) 4,408.51 0.38%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 93.00p 2.06%
Shell (SHEL) 2,395.00p 1.72%
Admiral Group (ADM) 2,103.00p 1.30%
Pearson (PSON) 950.20p 1.26%
Prudential (PRU) 1,106.00p 1.24%
Croda International (CRDA) 6,722.00p 1.08%
Beazley (BEZ) 679.50p 1.04%
Convatec Group (CTEC) 233.80p 1.04%
BAE Systems (BA.) 869.00p 1.00%
BP (BP.) 484.75p 0.99%

FTSE 100 - Fallers

United Utilities Group (UU.) 996.80p -2.08%
Airtel Africa (AAF) 111.10p -1.33%
British American Tobacco (BATS) 3,315.50p -1.13%
Ocado Group (OCDO) 644.40p -1.10%
Antofagasta (ANTO) 1,545.00p -0.93%
SEGRO (SGRO) 761.20p -0.65%
Rightmove (RMV) 523.60p -0.61%
B&M European Value Retail S.A. (DI) (BME) 413.30p -0.58%
Unite Group (UTG) 901.00p -0.55%
F&C Investment Trust (FCIT) 905.00p -0.55%

FTSE 250 - Risers

Tullow Oil (TLW) 40.00p 5.32%
Clarkson (CKN) 3,195.00p 5.10%
Bridgepoint Group (Reg S) (BPT) 199.00p 3.38%
Drax Group (DRX) 698.00p 3.33%
Wood Group (John) (WG.) 137.90p 3.14%
Volution Group (FAN) 360.00p 2.86%
Moonpig Group (MOON) 110.90p 2.59%
FirstGroup (FGP) 104.10p 2.46%
Vesuvius (VSVS) 400.00p 2.41%
Sirius Real Estate Ltd. (SRE) 75.10p 2.32%

FTSE 250 - Fallers

Britvic (BVIC) 791.00p -2.29%
ASOS (ASC) 502.00p -2.24%
Future (FUTR) 1,245.00p -1.50%
LondonMetric Property (LMP) 171.60p -1.44%
Petershill Partners (PHLL) 167.80p -1.29%
NB Private Equity Partners Ltd. (NBPE) 1,590.00p -1.24%
LXI Reit (LXI) 113.00p -1.22%
JPMorgan European Discovery Trust (JEDT) 395.00p -1.13%
IntegraFin Holding (IHP) 293.80p -1.08%
Safestore Holdings (SAFE) 930.00p -0.96%