London open: Stocks rise, pound edges lower after GDP data

London stocks edged higher in early trade on Thursday amid a strong performance from the mining sector and lifted by a weaker pound, as investors digested the latest UK GDP data.

At 0910 GMT, the FTSE 100 was up 0.3% at 7,364.32, while sterling was down 0.2% against the dollar at 1.3382 after figures from the Office for National Statistics showed that economic growth slowed in the third quarter amid supply chain issues.

GDP grew 1.3% between July and September, down from 5.5% in the second quarter and missing expectations for 1.5% growth. That leaves quarterly GDP 2.1% below where it was in the last quarter of 2019, before the pandemic hit.

GDP growth for July was revised down from a 0.1% drop to a 0.2% decline, while August’s was revised to 0.2% growth from 0.4%.

On a monthly basis for September, GDP grew 0.6%, which was ahead of the 0.4% increase expected.

Grant Fitzner, chief economist at the ONS, said: 2Growth picked up in September and the UK economy is now only slightly below pre-pandemic levels.

"This latest increase was led by the health sector, boosted by more visits to GP surgeries in England.

"Lawyers also had a busy month as house buyers rushed to complete purchases before the end of the stamp duty holiday.

"However, these were partially offset by falls in both the manufacture and sale of cars.

"Notably, business investment remained well down on pre-pandemic levels in the three months to September."

Paul Dales, chief UK economist at Capital Economics, said: "The big point is that the best of the recovery is now behind us. And we think progress is going to slow over the next six to nine months as shortages remain an issue and the real spending power of businesses and households is reduced by higher taxes and rising utility prices.

"This won’t prevent the Bank from raising interest rates from +0.10% (perhaps in December), but we think it will contribute to rates going no higher than 0.50% next year."

On the corporate front, investors were wading through a raft of earnings news.

Miners were among the best performers as copper prices rose, with Anglo American, BHP, Glencore, Rio and Antofagasta all higher.

Auto Trader was standout gainer on the FTSE 100 after saying it had achieved its highest ever six-monthly revenue and profits following solid performances from both the trade and retail segments.

On the downside, Johnson Matthey tumbled after it announced the departure of its chief executive alongside plans to sell its battery materials business and said the trading outlook for the full year was towards the lower end of market expectations.

B&M European Value Retail was weaker after the discount retailer reported lower half-year earnings, but said its supply chain remained "robust", despite constraints that have plagued the global economy, along with labour shortages in Britain due to Brexit.

Burberry lost ground even as the luxury fashion brand said revenues are now back at pre-Covid levels, as it reported a jump in interim pre-tax profit and said reinstated its dividend.

TI Fluid Systems slumped after BC Omega - which is indirectly controlled by investment funds advised by Bain Capital - sold 40m shares in the company in a placing.

Market Movers

FTSE 100 (UKX) 7,364.32 0.33%
FTSE 250 (MCX) 23,467.59 0.15%
techMARK (TASX) 4,637.74 0.02%

FTSE 100 - Risers

Auto Trader Group (AUTO) 693.20p 11.77%
Polymetal International (POLY) 1,495.50p 3.21%
3i Group (III) 1,407.50p 3.08%
Anglo American (AAL) 2,811.50p 2.74%
BHP Group (BHP) 1,942.00p 2.16%
Fresnillo (FRES) 978.80p 2.04%
Glencore (GLEN) 362.50p 2.01%
Rio Tinto (RIO) 4,532.50p 1.97%
Barclays (BARC) 195.84p 1.60%
Antofagasta (ANTO) 1,441.00p 1.41%

FTSE 100 - Fallers

Johnson Matthey (JMAT) 2,278.00p -17.55%
Burberry Group (BRBY) 1,807.50p -8.11%
B&M European Value Retail S.A. (DI) (BME) 603.00p -6.34%
ITV (ITV) 122.95p -2.30%
Flutter Entertainment (CDI) (FLTR) 12,250.00p -2.08%
Ocado Group (OCDO) 1,735.00p -1.62%
Royal Dutch Shell 'A' (RDSA) 1,655.20p -1.55%
Royal Dutch Shell 'B' (RDSB) 1,663.80p -1.23%
London Stock Exchange Group (LSEG) 7,032.00p -1.07%
BP (BP.) 344.15p -1.05%

FTSE 250 - Risers

Ferrexpo (FXPO) 303.20p 3.76%
Hochschild Mining (HOC) 167.40p 3.53%
OSB Group (OSB) 514.50p 3.40%
Dechra Pharmaceuticals (DPH) 4,930.00p 2.32%
Centamin (DI) (CEY) 101.90p 2.06%
Vistry Group (VTY) 1,154.00p 1.72%
IG Group Holdings (IGG) 802.00p 1.65%
Restaurant Group (RTN) 81.70p 1.62%
Helios Towers (HTWS) 152.40p 1.60%
Fidelity China Special Situations (FCSS) 332.00p 1.53%

FTSE 250 - Fallers

TI Fluid Systems (TIFS) 247.50p -9.51%
Assura (AGR) 69.70p -4.59%
Trustpilot Group (TRST) 301.80p -2.90%
Cairn Energy (CNE) 184.10p -2.59%
TUI AG Reg Shs (DI) (TUI) 236.60p -2.23%
Trainline (TRN) 316.20p -2.23%
Softcat (SCT) 1,904.00p -2.01%
Airtel Africa (AAF) 128.90p -1.98%
Micro Focus International (MCRO) 398.70p -1.85%
Carnival (CCL) 1,586.80p -1.78%