London midday: RSA and Lloyds lead rally in equities

London stocks rose on Thursday as traders weighed UK economic growth data and a barrage of corporate earnings.

RSA Insurance led the gains on the FTSE 100, after it reported a better-than-expected 43.3% jump in full year operating profit to £523m as its restructuring paid off in 2015.

Lloyds Banking Group also rallied after announcing a £2bn dividend payout despite posting a fall in 2015 profit and having to cough up more cash to cover payment protection insurance mis-selling claims. Peers Royal Bank of Scotland and Barclays were also on the front foot.

In economic data, UK gross domestic product in the fourth quarter of 2015 was unrevised and in line with forecasts, rising 0.5% on the previous quarter and 1.9% year-on-year. It compares to third quarter GDP growth of 0.4% quarter-on-quarter and 2.1% year-on-year.

"The fact that quarterly UK GDP growth in the fourth quarter was left unrevised at 0.5% was expected, but nonetheless comes as a bit of a relief given the jitters about the global recovery at the moment," said Vicky Redwood, chief UK economist at Capital Economics.

On a less bright note, Eurostat’s final reading on Eurozone inflation for January came in a little softer than originally estimated and still way off the European Central Bank’s target of just under 2%, adding weight to the argument for further stimulus. According to figures published on Thursday, the annual inflation rate in the euro bloc rose to 0.3% in January. This was below 0.2% the previous month and missed consensus and the initial estimate of 0.4%.

Brexit debate escalates

Cabinet minister Iain Duncan Smith said that Prime Minister David Cameron’s deal with the European Union to reduce net migration would have no real impact.

Cameron is campaigning to keep Britain in the EU at a 23 June referendum on the basis of a new deal.

“If you do not control your borders my observation is that you get parties led by people like Marine Le Pen and others who feed off the back of this, and ordinary decent people feel life is out of control,” the work and pensions secretary said in an interview on the eve of the latest migration statistics.

The Office for National Statistics estimated that net migration to the UK was 323,000 in the year to September, up 31,000 from the same period in 2013/14 but down on the record figure of 336,000 for the year to June 2015.

The report showed 165,000 EU citizens came to the UK for work reasons.

Meanwhile, the fall in oil prices continued with Brent crude down 1.02% to $34.06 per barrel and West Texas Intermediate down 0.50% to $31.99 per barrel at 1129 GMT.

Still to come, US durable goods orders and US initial jobless claims are due at 1330 GMT, and the US house price index will be released at 1400 GMT. Federal Reserve policymakers Dennis Lockhart and John Williams are also set to speak at separate events at 1315 GMT and 1700 GMT, respectively.

Companies

Serco shares surged after it said its full year loss narrowed to £69.4m from £990.5m the previous year.

UBM gained after saying full year revenue and operating profit jumped 30.6% and 46%, respectively.

Capita slumped as it reported 2015 full year pre-tax profit fell to £112.1m from £292.4m the previous year, as the company was hit by business exits and impairment charges.

Housebuilders reversed gains from the previous session when Barratt Developments reported a 40% increase in half year profit.

Market Movers

FTSE 100 (UKX) 6,002.81 2.31%
FTSE 250 (MCX) 16,394.22 1.72%
techMARK (TASX) 3,153.94 2.15%

FTSE 100 - Risers

RSA Insurance Group (RSA) 443.00p 12.29%
Lloyds Banking Group (LLOY) 68.30p 9.81%
Anglo American (AAL) 441.55p 7.76%
Glencore (GLEN) 122.60p 5.37%
International Consolidated Airlines Group SA (CDI) (IAG) 558.00p 5.18%
Rolls-Royce Holdings (RR.) 683.50p 4.59%
Royal Bank of Scotland Group (RBS) 242.60p 4.52%
Royal Dutch Shell 'A' (RDSA) 1,612.00p 4.34%
Prudential (PRU) 1,234.50p 4.00%
Royal Dutch Shell 'B' (RDSB) 1,607.50p 3.88%

FTSE 100 - Fallers

Capita (CPI) 1,012.00p -5.60%
Rio Tinto (RIO) 1,829.00p -2.40%
easyJet (EZJ) 1,479.00p -2.31%
Randgold Resources Ltd. (RRS) 6,565.00p -1.28%
Berkeley Group Holdings (The) (BKG) 3,208.00p -0.71%
Barratt Developments (BDEV) 567.50p -0.70%
Whitbread (WTB) 3,734.00p -0.43%
Diageo (DGE) 1,865.00p -0.19%
Provident Financial (PFG) 3,224.00p -0.03%
SABMiller (SAB) 4,167.00p 0.01%

FTSE 250 - Risers

Serco Group (SRP) 95.25p 16.59%
National Express Group (NEX) 322.50p 9.21%
Wood Group (John) (WG.) 630.00p 7.05%
UBM (UBM) 570.50p 6.84%
Petrofac Ltd. (PFC) 829.50p 6.69%
Amec Foster Wheeler (AMFW) 348.60p 6.41%
NMC Health (NMC) 861.50p 6.36%
Vedanta Resources (VED) 257.00p 6.24%
Northgate (NTG) 384.00p 5.58%
Ocado Group (OCDO) 279.30p 5.48%

FTSE 250 - Fallers

Beazley (BEZ) 355.60p -4.69%
Circassia Pharmaceuticals (CIR) 275.00p -2.14%
Weir Group (WEIR) 886.00p -1.77%
Rotork (ROR) 154.10p -1.53%
Michael Page International (MPI) 361.40p -1.26%
Dechra Pharmaceuticals (DPH) 1,185.00p -1.25%
HICL Infrastructure Company Ltd (HICL) 155.90p -1.20%
TalkTalk Telecom Group (TALK) 215.20p -1.19%
HarbourVest Global Private Equity Limited A Shs (HVPE) 895.00p -1.10%
John Laing Infrastructure Fund Ltd (JLIF) 117.50p -0.93%