London midday: Stocks tick higher as investors mull GDP data; Xi-Trump meeting eyed

London stocks had extended gains by midday on Friday as investors mulled over the latest UK GDP figures and looked ahead to this weekend's meeting between Chinese President Xi Jinping and his US counterpart Donald Trump.

The FTSE 100 was 0.3% firmer at 7,423.57, while the pound was up 0.1% against the dollar at 1.2682 and flat versus the euro at 1.1140.

Trump was reported to have said on the sidelines of the G20 summit that he expects talks to be "productive" when he meets China's Xi Jinping. According to AFP, Trump said: "I think it will be productive…It will be a very exciting day."

IG market analyst Joshua Mahony said: "It is worth noting that Trump’s relationship with Xi Jinping has typically been respectful and there is a good chance that once the meeting takes place, we could at least see an outcome which puts negotiations firmly back on the table."

On home shores, the latest figures from the Office for National Statistics confirmed the UK's first-quarter economic growth at 1.8% compared to the same quarter of last year. Quarter-on-quarter, GDP was up 0.5%, in line with consensus.

Rob Kent-Smith, head of GDP at the ONS, said: "GDP grew solidly and was unrevised in the first quarter of 2019, with manufacturing seeing strong growth due to orders being brought forward ahead of the UK’s original EU departure date.

"Household saving has been historically low for 18 months, following a marked drop off in non-pension saving in recent years."

Other figures from the ONS showed that the UK current account deficit rose to its highest level in the first quarter since 2016, driven by gold imports. The deficit widened from £23.7bn in the fourth quarter of last year to £30bn, which is equivalent to 5.6% of GDP.

Capital Economics economist Andrew Wishart said: "That was mainly due to a widening in the trade deficit. But as this was mainly due to a large import of unspecified goods, in particular gold bullion, most of which will probably be reversed in Q2. It may have also been partly due to activity being brought forward ahead of Brexit."

In equity markets, luxury fashion brand Burberry rallied as Goldman Sachs upped its stance on the stock to 'neutral' from 'sell', pointing to a supportive valuation.

Housebuilders were also on the rise, with Berkeley Group, Taylor Wimpey, Persimmon and Barratt Developments all higher as Tory leadership frontrunner Boris Johnson was said to be planning to slash stamp duty in the event of a no-deal Brexit budget.

Merlin Entertainments shares surged after it agreed to be taken private by investors including Lego's founding family and buyout firm Blackstone for almost £6bn in cash. The deal values the owner of Legoland resorts and Madame Tussauds' shares at 455p each - 15.2% more than their closing price on Thursday and a 36.8% premium to the value before one of Merlin's biggest investors called for a sale.

Woodford Patient Capital was in the green as it said it plans to cut debt, is considering share buybacks and announced some board changes following talks with shareholders.

The company, whose shares have been under pressure since the suspension of Neil Woodford's flagship Equity Income Fund, said it plans to cut gearing to below 10% from 16.8% within six months, and to be "generally operating ungeared" within 12 months. It also said it would undertake share buybacks if its shares continue to trade at a "sustained and material" discount to net asset value.

On the downside, Paypoint lost ground after saying it had been unable to agree appropriate renewal terms for its multi-year contract with British Gas and will cease to work with the company after 31 December 2019.

Market Movers

FTSE 100 (UKX) 7,423.57 0.29%
FTSE 250 (MCX) 19,426.78 0.58%
techMARK (TASX) 3,647.53 0.36%

FTSE 100 - Risers

International Consolidated Airlines Group SA (CDI) (IAG) 473.34p 4.19%
Burberry Group (BRBY) 1,857.50p 3.83%
Flutter Entertainment (FLTR) 5,870.00p 2.98%
Berkeley Group Holdings (The) (BKG) 3,678.00p 2.71%
Sainsbury (J) (SBRY) 195.75p 2.27%
Aveva Group (AVV) 4,086.00p 2.20%
Persimmon (PSN) 1,979.50p 2.17%
Taylor Wimpey (TW.) 158.45p 1.93%
British Land Company (BLND) 534.40p 1.60%
London Stock Exchange Group (LSE) 5,536.00p 1.58%

FTSE 100 - Fallers

InterContinental Hotels Group (IHG) 5,154.00p -1.43%
BT Group (BT.A) 195.98p -1.39%
Smurfit Kappa Group (SKG) 2,371.00p -1.25%
Bunzl (BNZL) 2,093.48p -1.02%
Rightmove (RMV) 530.70p -0.84%
Rolls-Royce Holdings (RR.) 837.49p -0.79%
United Utilities Group (UU.) 783.40p -0.79%
Imperial Brands (IMB) 1,876.20p -0.72%
Severn Trent (SVT) 2,035.00p -0.63%
Reckitt Benckiser Group (RB.) 6,177.00p -0.61%

FTSE 250 - Risers

Merlin Entertainments (MERL) 450.30p 14.00%
Restaurant Group (RTN) 132.60p 4.82%
Sirius Minerals (SXX) 15.18p 3.76%
Provident Financial (PFG) 416.90p 3.35%
Bakkavor Group (BAKK) 121.00p 3.07%
Wizz Air Holdings (WIZZ) 3,400.00p 3.00%
Playtech (PTEC) 424.20p 2.96%
Crest Nicholson Holdings (CRST) 357.80p 2.76%
Intu Properties (INTU) 77.20p 2.74%
Acacia Mining (ACA) 179.30p 2.52%

FTSE 250 - Fallers

PayPoint (PAY) 973.00p -4.79%
Amigo Holdings (AMGO) 194.80p -4.74%
Petrofac Ltd. (PFC) 429.20p -4.35%
Vivo Energy (VVO) 133.00p -2.92%
Premier Oil (PMO) 76.84p -2.68%
Balfour Beatty (BBY) 242.20p -1.78%
Tullow Oil (TLW) 208.71p -1.74%
Dixons Carphone (DC.) 108.78p -1.73%
PPHE Hotel Group Ltd (PPH) 1,821.10p -1.56%
Hunting (HTG) 514.00p -1.44%