London midday: FTSE pops higher but pharma stocks slide

London stocks had popped into the black by midday on Friday but gains were marginal as pharma shares took a hit and as data showed that economic growth in the UK unexpectedly slowed in the third quarter.

The FTSE 100 was up 0.1% at 8,075.32, paring earlier losses.

Figures released by the Office for National Statistics showed the economy grew by 0.1% in the last quarter, slightly below expectations.

The ONS said growth in the three months to September had been led by strength in the retail trade, excluding motor vehicles, and new construction work.

Output in the construction sector jumped 0.8%.

The 0.1% uptick was, however, below second-quarter growth of 0.2%. It also missed analyst expectations for a 0.2% improvement.

In September, GDP fell 0.1%. The ONS said a "notable" increase in car sales had been offset by a "slow month for IT companies". Also weighing on growth was the manufacturing sector, with production output down 0.5% .

The services sector, one of the main drivers of economic growth in the UK, was flat.

Liz McKeown, director of economic statistics at the ONS, said: "The economy grew a little in the latest quarter overall, as the recent slowdown in growth continued.

"Retail and new construction work both performed well, partially offset by falls in telecommunications and wholesale. Generally, growth was subdued across most industries in the latest quarter."

Kathleen Brooks, research director at XTB, said: "The risk for the UK economy is that the Q3 data does not take account of the UK Budget, and the hike to employers’ national insurance, which won’t take effect until next year. The Budget has been criticized for being anti-business, which could threaten the Labour government’s professed desire to boost growth.

"Added to this, Trump hasn’t taken office in the US yet, and we don’t know what his tariff plan will look like, or how his relationship with the UK will evolve. Thus, there are still plenty of headwinds that could hold back UK GDP in future.

"In the short term, Rachel Reeves and co. should focus on boosting GDP per capita, as right now, the population continues to grow, immigration surged in 2023, yet that is not having an impact on our GDP, which is deeply concerning."

In equity markets, pharma stocks were under the cosh, with GSK and AstraZeneca among the worst performers after US President-elect Donald Trump selected Robert F. Kennedy Jr to lead the Department of Health and Human Services.

Russ Mould, investment director at AJ Bell, said: "The announcement of vaccine-sceptic Robert F. Kennedy Junior as health secretary pick for the incoming Trump administration has spooked investors in the sector, with US drug companies also seeing their shares come under significant pressure overnight.

"The impact on the sector is hard to judge fully at this stage but, at the very least, it will cause a good deal of uncertainty."

Land Securities gained after saying it returned to profit in the six months to 30 September as the property market continued to recover, underpinned by growing demand. Pre-tax profit came in at £243m, compared with a loss of £193m a year earlier. The company also lifted guidance for EPRA full-year earnings.

InterContinental Hotels was boosted by an upgrade to ‘overweight’ at Barclays, but Premier Inn owner Whitbread fell after a downgrade to ‘equalweight’ by the same outfit.

Outside the FTSE 350, TT Electronics surged on news it had rejected two takeover offers from Volex.

Market Movers

FTSE 100 (UKX) 8,075.32 0.05%
FTSE 250 (MCX) 20,516.39 -0.03%
techMARK (TASX) 4,605.00 -0.80%

FTSE 100 - Risers

easyJet (EZJ) 531.80p 2.78%
Land Securities Group (LAND) 596.00p 2.76%
Anglo American (AAL) 2,298.00p 2.41%
Antofagasta (ANTO) 1,672.00p 2.20%
Fresnillo (FRES) 642.00p 2.07%
Glencore (GLEN) 381.00p 1.68%
Rio Tinto (RIO) 4,811.00p 1.59%
Prudential (PRU) 640.00p 1.52%
HSBC Holdings (HSBA) 715.80p 1.36%
Sainsbury (J) (SBRY) 242.60p 1.25%

FTSE 100 - Fallers

GSK (GSK) 1,309.00p -3.29%
B&M European Value Retail S.A. (DI) (BME) 386.70p -3.03%
Croda International (CRDA) 3,515.00p -2.60%
AstraZeneca (AZN) 10,032.00p -2.53%
Rolls-Royce Holdings (RR.) 534.40p -1.98%
Melrose Industries (MRO) 494.90p -1.53%
Convatec Group (CTEC) 244.20p -1.29%
DCC (CDI) (DCC) 5,355.00p -1.20%
Centrica (CNA) 120.30p -1.19%
Flutter Entertainment (DI) (FLTR) 20,830.00p -1.19%

FTSE 250 - Risers

Marshalls (MSLH) 331.50p 2.63%
Ithaca Energy (ITH) 100.40p 2.34%
Hochschild Mining (HOC) 204.50p 2.25%
Inchcape (INCH) 782.50p 2.22%
TP Icap Group (TCAP) 263.00p 1.94%
SDCL Energy Efficiency Income Trust (SEIT) 54.70p 1.86%
Morgan Advanced Materials (MGAM) 256.50p 1.79%
Abrdn (ABDN) 140.35p 1.78%
Serco Group (SRP) 158.00p 1.61%
Pennon Group (PNN) 562.00p 1.54%

FTSE 250 - Fallers

Close Brothers Group (CBG) 204.00p -3.23%
Genus (GNS) 1,752.00p -2.67%
Softcat (SCT) 1,614.00p -2.54%
Bytes Technology Group (BYIT) 453.00p -2.41%
Kainos Group (KNOS) 857.00p -2.17%
Caledonia Investments (CLDN) 3,360.00p -2.04%
Premier Foods (PFD) 185.60p -1.80%
Worldwide Healthcare Trust (WWH) 338.00p -1.60%
Baillie Gifford Japan Trust (BGFD) 692.00p -1.56%
Baillie Gifford US Growth Trust (USA) 252.50p -1.56%