London close: Stocks buoyed by solid economic data

The FTSE 100 index rose 0.8% to close at 8,347.35 points, while the FTSE 250 gained 0.68% to end the session at 21,094.16 points.

In currency markets, sterling was last up 0.3% on the dollar to trade at $1.2867, while it increased 0.53% against the euro, changing hands at €1.1712.

“A better-than-expected second-quarter GDP rebound in Japan - the strongest since the first quarter of 2023 - led to an over 2% gain in the country's recently battered stock index,” said IG senior market analyst Axel Rudolph.

“A slowing UK economy following Wednesday's US sub-3% year-on-year inflation print and Thursday's strong US retail sales - rising the most in a year - keep rate cut expectations on both sides of the Atlantic firmly on track.

“The UK's FTSE 100 and its European peers benefitted and rallied by around 1% to see a third consecutive day of gains following last week's sharp sell-off.”

Rudolph noted that two- and 10-year UK and US yields rose by around 10 basis points on the day as well.

“The greenback regained recently lost ground as it appreciated across the board, following stronger-than-expected US retail sales.

“The rise in the dollar took the wind out of the gold price's sails but didn't negatively affect the price of silver, nor that of Brent crude oil, both of which recovered from recent weakness.”

UK economy grows as expected, retail sales rise across the pond

On the data front, the UK economy expanded by 0.6% in the second quarter, slightly down from 0.7% in the first quarter, according to data released by the Office for National Statistics (ONS) earlier.

The growth, while modest, was in line with expectations.

The ONS also reported that the economy showed no growth in June, matching forecasts.

“The UK economy has now grown strongly for two quarters, following the weakness we saw in the second half of last year,” said Liz McKeown, director of economic statistics at the ONS.

“Growth across the three months was led by the service sector, where scientific research, the IT industry and legal services all did well.

“In June growth was flat with services falling, due to a weak month for health, retailing and wholesaling, offset by widespread growth in manufacturing.”

Across the Atlantic, retail sales in the US saw a significant uptick in July, driven primarily by a rebound in auto purchases.

The Department of Commerce reported a 1.0% month-on-month increase in retail sales, reaching $709.7bn.

That rise followed a revised 0.2% decline in June and was more than double the 0.3% growth predicted by economists.

Excluding automobiles, retail sales were up by a more modest 0.4%, following a 0.5% increase in June.

Notably, sales of electronics and appliances grew by 1.6%, while sales in building materials and food and beverage stores each rose by 0.9%.

In China, economic data presented a mixed picture, as retail sales rose 2.7% year-on-year in July, surpassing the expected 2.6% increase.

However, industrial production growth fell slightly short of expectations, rising by 5.1% against a forecast of 5.2%.

Fixed asset investment continued to decline, with a 10.2% drop in the year to date, compared to a 10.1% decrease in June.

Additionally, the unemployment rate edged up to 5.2% in July, the first increase since February, up from 5% in June.

Admiral Group surges, ex-dividends prove a drag

On London’s equity markets, Admiral Group surged 6.51% after reporting a 32% increase in half-year pre-tax profits to £310m, exceeding analyst expectations for £304m.

The insurance firm credited improved underwriting performance and claims releases for the strong results.

Admiral also declared an interim dividend of 71p per share, including a special payout, marking a 39% increase and surpassing forecasts of 67.3p.

DCC also advanced, rising 2.22% following an upgrade from RBC Capital Markets to 'outperform' from 'sector perform’.

The broker cited recovery potential in its healthcare and technology segments, despite recent challenges.

C&C Group, the owner of drink brands Magners and Tennent’s, gained 3.17% after affirming that it was on track to meet its full-year earnings expectations.

Rank Group saw a significant rise of 6.57%, driven by its return to profitability for the year ending in June.

The company, which owns Mecca Bingo and Grosvenor, highlighted strong financial progress.

Playtech continued its upward momentum, climbing 3.16% after confirming ongoing talks with Flutter Entertainment on Wednesday regarding the potential sale of its Italian business, Snaitech.

On the downside, OSB Group plunged 18.75% after downgrading its full-year net interest margin outlook to between 230 and 240 basis points, citing increased competition in a sluggish mortgage market.

A number of firms were in the red as they traded ex-dividend, with Abrdn down 2.85%, Anglo American off 0.57%, Rio Tinto losing 5.47%, Hikma Pharmaceuticals slipping 0.67%, and Shell closing 0.05% weaker.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,347.35 0.80%
FTSE 250 (MCX) 21,094.16 0.68%
techMARK (TASX) 4,925.71 0.61%

FTSE 100 - Risers

Admiral Group (ADM) 2,993.00p 6.51%
Standard Chartered (STAN) 760.80p 3.71%
Smurfit Westrock (DI) (SWR) 3,280.00p 3.57%
JD Sports Fashion (JD.) 126.50p 2.89%
Pershing Square Holdings Ltd NPV (PSH) 3,634.00p 2.83%
WPP (WPP) 705.40p 2.82%
Barclays (BARC) 227.75p 2.78%
Scottish Mortgage Inv Trust (SMT) 859.80p 2.60%
Intermediate Capital Group (ICG) 2,120.00p 2.51%
Antofagasta (ANTO) 1,887.50p 2.50%

FTSE 100 - Fallers

Rio Tinto (RIO) 4,751.00p -2.10%
Barratt Developments (BDEV) 541.40p -1.42%
United Utilities Group (UU.) 1,002.50p -1.18%
Flutter Entertainment (DI) (FLTR) 16,040.00p -0.99%
Hikma Pharmaceuticals (HIK) 2,074.00p -0.67%
National Grid (NG.) 982.20p -0.67%
BT Group (BT.A) 145.50p -0.61%
Anglo American (AAL) 2,185.50p -0.57%
Severn Trent (SVT) 2,578.00p -0.46%
Taylor Wimpey (TW.) 163.50p -0.46%

FTSE 250 - Risers

Foresight Group Holdings Limited NPV (FSG) 528.00p 5.81%
Bank of Georgia Group (BGEO) 4,315.00p 5.63%
Watches of Switzerland Group (WOSG) 385.60p 4.61%
SSP Group (SSPG) 173.50p 4.52%
Auction Technology Group (ATG) 436.50p 3.93%
Carnival (CCL) 1,087.00p 3.72%
Softcat (SCT) 1,615.00p 3.46%
Syncona Limited NPV (SYNC) 121.80p 3.22%
C&C Group (CDI) (CCR) 156.40p 3.17%
ICG Enterprise Trust (ICGT) 1,334.00p 3.09%

FTSE 250 - Fallers

OSB Group (OSB) 393.40p -18.75%
Wizz Air Holdings (WIZZ) 1,236.00p -5.79%
Diversified Energy Company (DEC) 1,012.00p -5.24%
NextEnergy Solar Fund Limited Red (NESF) 80.00p -3.61%
Abrdn (ABDN) 151.65p -2.85%
BH Macro Ltd. GBP Shares (BHMG) 378.50p -2.83%
Tritax Eurobox (GBP) (EBOX) 66.50p -2.35%
Greencoat UK Wind (UKW) 141.90p -2.00%
The Renewables Infrastructure Group Limited (TRIG) 100.40p -1.95%
Pennon Group (PNN) 596.50p -1.81%