London close: Stocks finish firmer after upward revision to UK GDP

The FTSE 100 ended the day 0.08% higher at 7,608.08 points, while the FTSE 250 showed more pronounced enthusiasm, rising 1% to 18,279.42.

On the currency front, sterling was last up 0.06% on the dollar, trading at $1.2210, while it weakened 0.06% against the euro to change hands at €1.1541.

“European markets look set to finish a negative quarter on a positive note, with a softening in yields helping to lift the mood after EU headline inflation slowed more than expected in September, boosting optimism that further rate hikes from central banks won’t be necessary,” said CMC Markets chief market analyst Michael Hewson.

“While the DAX and CAC 40 have seen significant losses over the last three months, the FTSE 100 has enjoyed a positive quarter, helped by solid gains for the likes of Rolls-Royce, BP, and Shell, as well as housing, with Taylor Wimpey leading the way in this sector.

“It’s also been a good day for the FTSE 250 after upward revisions to UK GDP.”

Stronger GDP growth but dip in mortgage approvals

In economic news, the Office for National Statistics (ONS) announced that the UK's economic growth for the first quarter had exceeded previous expectations.

Gross domestic product (GDP) increased by 0.3% from January to March, a jump from the previously projected 0.1%.

With that revision, the UK's GDP now surpassed its pre-pandemic figures by 1.8%.

“Today’s latest figures show the GDP growth rate is almost unrevised over the last 18 months,” said ONS chief economist Grant Fitzner.

“Our new estimates indicate a stronger performance for professional and scientific businesses due to improved data sources.

“Meanwhile, healthcare grew less because of new near real-time information showing the cost of delivering services.”

In the housing sector, mortgage approvals saw a downturn in August, marking a six-month low, as surging interest rates impacted lending behaviour.

The Bank of England's recent Money and Credit report revealed a decline in net mortgage approvals for house acquisitions to 45,400, down from 49,500 in July, surprising many analysts who had forecasted a slighter dip.

Concurrently, the number of approvals for remortgaging reached its nadir since July 2012, plummeting to 25,000.

Reflecting the changes in the lending environment, the effective interest rate for new mortgages surged by 16 basis points, standing at 4.82%.

“The renewed rise in mortgage rates has weighed on net mortgage lending, which was a mere £1.2bn in August, down from an average of £5.1bn in 2022,” said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

“This primarily reflects the decline in gross mortgage lending.

“Repayments have also fallen, but this is largely due to the decline in housing transactions and hence fewer mortgages being fully repaid.”

Meanwhile, provisional data from HM Revenue and Customs highlighted that while there was a month-on-month growth of 1% in August 2023's residential transactions, marking three consecutive months of growth, the year-on-year figures revealed a 16% decline compared to August 2022.

On a brighter note, high street retail experienced a surge last week, as the latest BDO High Street Sales Tracker highlighted a 5.51% rise in like-for-like sales for the week ended 24 September.

That surge marked a notable improvement from last year's same week, which had seen a modest 1.33% increase and was affected by a bank holiday due to Queen Elizabeth II's funeral.

BDO suggested that the onset of the autumn season, combined with cooler temperatures and widespread rainfall, might have spurred this spending spree.

Retailers saw buoyancy both offline and online.

On the continent, the cost of living in the common currency area showed signs of relaxation in September.

Data from Eurostat showed that the eurozone consumer price index, on a seasonally adjusted scale, grew 0.3% month-on-month.

That change has led to a decrease in the annual growth rate, from August's 5.2% to 4.3% in September.

Severn Trent, JD Sports, and more see solid gains

On London’s equity markets, Severn Trent saw a robust 5.18% increase, making it one of the day's top performers.

The surge came after the company announced its intentions to raise £1bn towards a transformative plan, expected to generate around 7,000 jobs throughout the Midlands.

Another winner was JD Sports Fashion, which soared by 5.11% based on positive first-quarter results from Nike, suggesting a favourable environment for sportswear retailers.

Specialist media company Future rocketed 24.56% after it managed to hold its annual earnings guidance despite a turbulent market, though it also hinted at mixed trading conditions ahead.

Luxury car manufacturer Aston Martin Lagonda jumped 9.5% after it announced that Lawrence Stroll's Yew Tree Consortium had increased its stake in the company from its previous 3.27% to a significant 26.23%.

Ascential ticked ahead 6.57% following reports that Apax Partners, a buyout firm, was considering acquiring its consumer data subsidiary WGSN.

After an operational update, Land Securities Group added 3.13%, boosted by Shore Capital's revision of its stock recommendation, moving from 'sell' to 'hold', stating that the potential risks and rewards now appear more evenly matched.

Intertek Group enjoyed a 2.33% gain after Citigroup maintained its bullish stock outlook.

Furthermore, it increased the stock's price target from 4,973p to 5,055p, highlighting that it is now aligned with its historical valuation metrics.

On the downside, cruise operator Carnival dipped 4.58% even after the company reported a switch to third-quarter profits and decreased its annual loss predictions, a change propelled by increased ticket prices and solid demand.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,608.08 0.08%
FTSE 250 (MCX) 18,279.42 1.00%
techMARK (TASX) 4,342.23 0.63%

FTSE 100 - Risers

JD Sports Fashion (JD.) 149.70p 4.80%
Severn Trent (SVT) 2,365.00p 4.42%
Croda International (CRDA) 4,915.00p 4.31%
United Utilities Group (UU.) 948.20p 4.08%
Ocado Group (OCDO) 600.40p 3.34%
Land Securities Group (LAND) 589.80p 2.61%
Haleon (HLN) 340.85p 2.33%
SEGRO (SGRO) 719.40p 2.22%
Phoenix Group Holdings (PHNX) 482.20p 2.07%
St James's Place (STJ) 832.20p 2.04%

FTSE 100 - Fallers

Hargreaves Lansdown (HL.) 771.40p -2.05%
Shell (SHEL) 2,606.00p -2.05%
BAE Systems (BA.) 1,001.00p -2.03%
BP (BP.) 531.40p -1.79%
CRH (CDI) (CRH) 4,542.00p -1.77%
Flutter Entertainment (CDI) (FLTR) 13,390.00p -1.22%
Melrose Industries (MRO) 469.20p -1.20%
Vodafone Group (VOD) 76.82p -1.20%
Ashtead Group (AHT) 5,002.00p -1.19%
Imperial Brands (IMB) 1,667.00p -0.80%

FTSE 250 - Risers

Future (FUTR) 889.00p 24.42%
Digital 9 Infrastructure NPV (DGI9) 38.70p 15.52%
Syncona Limited NPV (SYNC) 116.40p 9.60%
Aston Martin Lagonda Global Holdings (AML) 285.80p 9.50%
Pennon Group (PNN) 586.00p 6.35%
Hammerson (HMSO) 25.18p 6.33%
NCC Group (NCC) 118.00p 6.12%
Ascential (ASCL) 209.00p 5.66%
Derwent London (DLN) 1,927.00p 4.84%
TI Fluid Systems (TIFS) 123.20p 4.58%

FTSE 250 - Fallers

Carnival (CCL) 997.60p -4.85%
Ceres Power Holdings (CWR) 314.00p -3.92%
PZ Cussons (PZC) 141.60p -3.41%
Octopus Renewables Infrastructure Trust (ORIT) 87.60p -3.20%
SDCL Energy Efficiency Income Trust (SEIT) 67.30p -3.17%
Foresight Group Holdings Limited NPV (FSG) 430.00p -3.15%
NB Private Equity Partners Ltd. (NBPE) 1,582.00p -3.06%
Hipgnosis Songs Fund Limited NPV (SONG) 80.20p -2.79%
AJ Bell (AJB) 274.40p -1.65%
Direct Line Insurance Group (DLG) 172.20p -1.54%