London midday: Stocks dip as investors mull GDP; airlines fly higher

London stocks had dipped into the red by midday on Thursday as investors mulled news that the UK fell into recession at the end of 2023.

The FTSE 100 was down 0.1% at 7,562.32, reversing earlier gains.

Provisional figures released earlier by the Office for National Statistics showed the UK fell into recession at the end of last year, after a bigger-than-expected contraction in GDP in the fourth quarter.

GDP contracted by 0.3% in the three months, following a 0.1% decline in the third. A recession is defined as two consecutive quarters of negative growth.

Analysts had been expecting another quarter of no growth, although most had been looking for a smaller contraction, of 0.1%.

Over the entirety of 2023, however, the ONS said GDP edged up by 0.1% year-on-year.

During the fourth quarter, there were falls in all three main sectors. Construction output slid 1.3%, production by 1% and services by 0.2%.

On a monthly basis, GDP fell by 0.1% in December, compared to growth of 0.2% in November - revised down from an 0.3% improvement - and a 0.5% fall in October, which was revised down from a 0.3% fall.

Russ Mould, investment director at AJ Bell, said: "Confirmation that the UK is in recession has done nothing to knock UK stocks off course. An economy pushing through mud is not new news and if anything, it might encourage the Bank of England to think harder about cutting interest rates to avoid further economic deterioration."

In equity markets, airlines IAG, Wizz Air and easyJet all flew higher after Jet2 lifted its annual profit guidance.

British Gas owner Centrica rallied even as it posted a fall in annual profits on the back of "sharply "lower" commodity prices. Adjusted operating profit for the year to December 2023 came in at £2.72bn from £3.3bn. The full-year dividend was up 33% to 4p a share.

Business information and analytics firm Relx gained as it hiked its dividend after a robust full-year performance.

Independent North Sea oil and gas explorer Ithaca Energy was up as it said full-year earnings would be in line with guidance.

On the downside, BP, Imperial Brands and Shell all lost ground as they traded without entitlement to the dividend.

Animal genetics firm Genus tumbled as it warned on full-year profits. Genus said fiscal year 2024 adjusted pre-tax profit was set to be "not less than" £58m in actual currency, versus £71.5m a year earlier.

Close Brothers was also sharply lower after saying it was suspending its dividend this year and that future payouts were under review as it awaits the Financial Conduct Authority’s review of motor finance.

Market Movers

FTSE 100 (UKX) 7,562.32 -0.08%
FTSE 250 (MCX) 19,059.75 0.29%
techMARK (TASX) 4,349.46 -0.72%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 148.50p 3.16%
Ocado Group (OCDO) 549.20p 3.08%
Coca-Cola HBC AG (CDI) (CCH) 2,446.00p 2.69%
Centrica (CNA) 138.00p 2.68%
Pearson (PSON) 967.80p 2.30%
Croda International (CRDA) 4,971.00p 2.18%
Rolls-Royce Holdings (RR.) 318.60p 2.05%
NATWEST GROUP (NWG) 213.20p 2.01%
Intermediate Capital Group (ICP) 1,811.00p 1.97%
Burberry Group (BRBY) 1,321.00p 1.89%

FTSE 100 - Fallers

Imperial Brands (IMB) 1,814.00p -4.12%
BP (BP.) 462.35p -2.97%
Shell (SHEL) 2,435.50p -2.48%
Relx plc (REL) 3,276.00p -1.80%
GSK (GSK) 1,654.20p -0.83%
Smith (DS) (SMDS) 316.50p -0.81%
Tesco (TSCO) 275.70p -0.54%
Vodafone Group (VOD) 65.14p -0.35%
AstraZeneca (AZN) 9,690.00p -0.35%
Antofagasta (ANTO) 1,671.00p -0.33%

FTSE 250 - Risers

Ithaca Energy (ITH) 135.60p 4.79%
Dunelm Group (DNLM) 1,104.00p 4.45%
Bluefield Solar Income Fund Limited (BSIF) 102.40p 3.43%
Wizz Air Holdings (WIZZ) 2,132.00p 3.09%
Genuit Group (GEN) 404.00p 2.80%
SDCL Energy Efficiency Income Trust (SEIT) 59.00p 2.61%
easyJet (EZJ) 576.20p 2.53%
NCC Group (NCC) 125.00p 2.29%
BlackRock World Mining Trust (BRWM) 512.00p 1.99%
Pennon Group (PNN) 673.00p 1.82%

FTSE 250 - Fallers

Close Brothers Group (CBG) 292.00p -26.63%
Genus (GNS) 1,660.00p -21.85%
Ferrexpo (FXPO) 80.20p -4.47%
NextEnergy Solar Fund Limited Red (NESF) 75.25p -2.27%
Baltic Classifieds Group (BCG) 226.50p -2.16%
FirstGroup (FGP) 154.10p -1.97%
UK Commercial Property Reit Limited (UKCM) 64.00p -1.84%
TBC Bank Group (TBCG) 2,790.00p -1.59%
Tullow Oil (TLW) 29.98p -1.51%
Trustpilot Group (TRST) 190.00p -1.35%