London open: Stocks nudge up as UK GDP revised higher

London stocks nudged higher in early trade on Friday following positive US and Asian sessions, as investors mulled an upward revision to UK GDP figures and looked ahead to key US inflation data.

At 0830 BST, the FTSE 100 was up 0.1% at 7,630.98.

Data released earlier by the Office for National Statistics showed that the economy grew a touch in the final quarter of last year, meaning a recession was avoided in the second half.

The GDP figure was revised up from an initial estimate of zero growth to 0.1% growth, following an upwardly-revised 0.1% contraction in the third quarter. The initial estimate had shown a 0.2% contraction in Q3.

GDP for 2022 as a whole is now estimated to have risen by 4.1%, up from a previous estimate of 4%.

The figures showed the quarterly GDP in Q4 was 0.6% below where it was pre-Covid in the fourth quarter of 2019, revised upwards from a previous estimate of 0.8% below.

Darren Morgan, director of economic statistics at the ONS, said: "The economy performed a little more strongly in the latter half of last year than previously estimated, with later data showing telecommunications, construction and manufacturing all faring better than initially thought in the latest quarter.

"Households saved more in the last quarter, with their finances boosted by the government's energy bill support scheme.

"Meanwhile, the UK's balance of payments deficit with the rest of the World narrowed, driven by increased foreign earnings by UK companies, particularly in the energy sector."

Investors were also mulling the latest figures from Nationwide, which showed that house prices fell in March at the fastest annual pace since July 2009.

House prices were down 3.1% on the year following a 1.1% decline in February. On the month, prices fell 0.8% in March following a 0.5% drop the month before. This marked the seventh decline in a row and leaves prices 4.6% below their August peak.

The data showed that house price growth slowed across all UK regions. The West Midlands was the strongest performing region, with prices up 1.4% on the year, while Scotland remained the weakest performer, with prices down 3.1%.

Nationwide chief economist Robert Gardner said: "The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget. Since then, activity has remained subdued - the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago.

"It will be hard for the market to regain much momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation. Housing affordability also remains stretched, where mortgage rates remain well above the lows prevailing at this point last year."

Looking ahead to the rest of the day, US PCE data for February is due at 1330 BST.

CMC Markets analyst Michael Hewson said the Federal Reserve will be hoping that there are signs that inflation is cooling here after the surprise spike to 4.7% in the January numbers, which prompted a sharp spike in US rate hike expectations just prior to the meltdown that we saw at the beginning of this month.

"The jump higher in PCE core deflator also happened to coincide with a surge in January personal spending, which rose 1.8%," he said.

"Since then, yields have collapsed on concerns over the stability of the banking system, with US 2-year yields set to see their biggest monthly fall since the financial crisis. While personal spending is expected to slow from the 1.8% gain seen in January to 0.3%, the bigger question is whether we’ll see a similar slowdown in headline core PCE, or at the very least that we don’t move higher."

In equity markets, Rolls-Royce rose after it announced the appointment of BP’s Helen McCabe as its new chief financial officer.

Computacenter gained after it delivered flat annual profit but said revenues in the current year had been "extremely buoyant".

Ocado advanced after saying late on Thursday that it had "comprehensively won" a patent infringement suit brought by Norwegian warehouse robotics group AutoStore at the UK High Court.

BA and Iberia owner IAG flew higher after rating upgrades at Barclays and Deutsche Bank.

NCC shares crumbled, down 47% after the cyber security firm issued a profits warning, citing a further deterioration in the macro-economic and market environment, including the collapse of Silicon Valley Bank and its impact on customer confidence.

The company now expects group adjusted operating profit to be within a range of £28m to £32m, compared with November forecasts of around £47m.

Market Movers

FTSE 100 (UKX) 7,630.98 0.14%
FTSE 250 (MCX) 18,933.17 0.13%
techMARK (TASX) 4,577.35 0.41%

FTSE 100 - Risers

Beazley (BEZ) 618.50p 5.73%
Ocado Group (OCDO) 553.40p 4.97%
International Consolidated Airlines Group SA (CDI) (IAG) 152.26p 2.46%
Pearson (PSON) 832.80p 2.08%
B&M European Value Retail S.A. (DI) (BME) 486.70p 1.67%
Rolls-Royce Holdings (RR.) 152.26p 1.37%
Rio Tinto (RIO) 5,506.00p 1.23%
Frasers Group (FRAS) 779.50p 1.17%
Burberry Group (BRBY) 2,570.00p 1.14%
Hiscox Limited (DI) (HSX) 1,109.50p 1.00%

FTSE 100 - Fallers

SSE (SSE) 1,792.00p -0.97%
Experian (EXPN) 2,642.00p -0.79%
NATWEST GROUP (NWG) 263.40p -0.75%
M&G (MNG) 189.35p -0.66%
United Utilities Group (UU.) 1,051.50p -0.61%
HSBC Holdings (HSBA) 552.20p -0.56%
Scottish Mortgage Inv Trust (SMT) 670.00p -0.53%
Prudential (PRU) 1,109.00p -0.49%
Standard Chartered (STAN) 612.20p -0.42%
Severn Trent (SVT) 2,857.00p -0.38%

FTSE 250 - Risers

PureTech Health (PRTC) 235.00p 5.15%
Genus (GNS) 2,970.00p 4.65%
Pets at Home Group (PETS) 377.20p 4.49%
Future (FUTR) 1,193.00p 4.47%
Hilton Food Group (HFG) 703.00p 3.23%
easyJet (EZJ) 516.80p 3.15%
Apax Global Alpha Limited (APAX) 156.40p 2.89%
Spire Healthcare Group (SPI) 217.50p 2.84%
Mitie Group (MTO) 84.20p 2.81%
Computacenter (CCC) 2,142.00p 2.78%

FTSE 250 - Fallers

NCC Group (NCC) 77.10p -49.67%
Tritax Eurobox (GBP) (EBOX) 57.00p -4.84%
Darktrace (DARK) 254.40p -4.00%
Wood Group (John) (WG.) 198.75p -3.47%
Discoverie Group (DSCV) 750.00p -2.72%
Savills (SVS) 967.00p -2.62%
Rotork (ROR) 308.20p -2.53%
Jupiter Fund Management (JUP) 132.40p -2.43%
Hill and Smith (HILS) 1,320.00p -2.37%
Vesuvius (VSVS) 400.00p -2.20%