London open: Stocks rise as investors mull GDP data

London stocks rose in early trade on Thursday after data showed the UK economy grew more than initially estimated in the second quarter.

At 0835 BST, the FTSE 100 was up 0.3% at 7,128.92.

Figures released earlier by the Office for National Statistics showed the economy expanded by 5.5% between April and June on a quarterly basis, up from a preliminary estimate of 4.8% growth. This left GDP 3.3% below pre-pandemic levels, up from a previous estimate of 4.4% below.

The ONS said that in output terms, the largest contributors to the increase were from wholesale and retail trade, accommodation and food service activities, education and human health, and social work activities.

The figures showed that household spending jumped 7.9% to £24.6bn.

Pantheon Macroeconomics said the upward revision to GDP brings the UK economy’s performance in line with other G7 economies. "The 3.3% shortfall in GDP from its Q4 2019 peak now is identical to that seen in Germany, similar to the 3.2% shortfall in France, and better than the 3.8% shortfall in Italy," said economist Samuel Tombs.

However, he also noted that the revision was mainly driven by some methodological changes to the measurement of output in the health and education sectors.

In equity markets, Diageo was the standout gainer on the top-flight index after saying it made a strong start to the financial year, with "organic net sales momentum across all regions" despite supply chain problems.

The drinks company's North American business is performing strongly based on resilient consumer demand, robust off-trade activity and good momentum in the on-trade business. Africa, Asia Pacific and Latin America are performing well, the company said.

IP Group was the top riser on the FTSE 250 after saying it had realised around £84m through the IPO of Oxford Nanopore.

On the downside, Virgin Money lost ground after saying it would close almost one-fifth of its branches and cut office space as customers increasingly move online during the pandemic.

Elsewhere, Barratt Developments, British American Tobacco, Hays, Travis Perkins, TP ICAP and LXI REIT were all weaker as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,128.92 0.29%
FTSE 250 (MCX) 23,253.85 0.44%
techMARK (TASX) 4,673.83 0.36%

FTSE 100 - Risers

Diageo (DGE) 3,632.00p 1.98%
Pearson (PSON) 724.60p 1.71%
Anglo American (AAL) 2,599.50p 1.68%
Severn Trent (SVT) 2,662.00p 1.45%
JD Sports Fashion (JD.) 1,075.50p 1.37%
Pershing Square Holdings Ltd NPV (PSH) 2,695.00p 1.13%
AstraZeneca (AZN) 8,927.00p 1.06%
Rio Tinto (RIO) 4,870.50p 1.04%
SEGRO (SGRO) 1,218.00p 1.00%
Whitbread (WTB) 3,419.00p 0.97%

FTSE 100 - Fallers

Melrose Industries (MRO) 172.70p -3.82%
Barratt Developments (BDEV) 654.80p -2.30%
British American Tobacco (BATS) 2,676.00p -2.21%
Smith & Nephew (SN.) 1,303.50p -0.87%
HSBC Holdings (HSBA) 390.45p -0.78%
Next (NXT) 8,330.00p -0.76%
Sainsbury (J) (SBRY) 288.30p -0.76%
Standard Chartered (STAN) 434.80p -0.55%
Rolls-Royce Holdings (RR.) 143.90p -0.48%
Prudential (PRU) 1,442.50p -0.35%

FTSE 250 - Risers

IP Group (IPO) 141.40p 3.97%
Trainline (TRN) 371.60p 2.54%
Workspace Group (WKP) 854.00p 2.40%
Investec (INVP) 322.40p 2.35%
AJ Bell (AJB) 402.60p 2.34%
Mediclinic International (MDC) 314.60p 2.14%
Greggs (GRG) 3,060.00p 1.86%
Ferrexpo (FXPO) 323.60p 1.76%
Wood Group (John) (WG.) 229.00p 1.73%
Sirius Real Estate Ltd. (SRE) 131.40p 1.70%

FTSE 250 - Fallers

Hays (HAS) 163.80p -5.59%
Tritax Big Box Reit (BBOX) 208.00p -3.44%
Rank Group (RNK) 169.20p -3.09%
Vesuvius (VSVS) 476.20p -2.42%
Travis Perkins (TPK) 1,578.00p -1.74%
TP Icap Group (TCAP) 163.26p -1.73%
Spire Healthcare Group (SPI) 210.00p -1.41%
LXI Reit (LXI) 141.00p -1.40%
Micro Focus International (MCRO) 409.20p -1.23%
Virgin Money UK (VMUK) 211.00p -1.03%