London midday: FTSE 100 falls 1% on inflation concerns

The FTSE 100 was down 1.1% at 7,538.75 around the midday mark.

The Office for National Statistics reported that the UK economy expanded 0.2% between April and June, with growth picking up from 0.1% in the first quarter. This was the strongest growth rate in over a year, and showed that the economy managed to avoid stagnation like many expected.

In June alone, GDP growth picked up to 0.5% month-on-month, which the ONS suggested could be due to a lack of a bank holiday, compared to May when there were three – one more than normal because of the King's Coronation.

However, analysts were showing concern that the stronger-than-expected data might prompt a move by the Bank of England to tighten monetary policy once again if it can't get a handle on inflationary pressures. Investors will be watching next week's UK consumer price inflation figures for any hint of what the BoE might do next.

As for Friday's session, all eyes now turn to the release of the US producer price index due out at 1330 BST. Economists expect prices to have risen 0.2% in July after a 0.1% the month before.

Stocks on Wall Street closed higher on Thursday after US consumer price data showed that inflation stayed steady at just 0.2% month-on-month in July. The data, which was in line with economists' expectations, raised hopes that the Federal Reserve would hold back from hiking interest rates further at its next meeting in September.

Comments overnight by head of the San Francisco Fed, Mary Daly, will have raised some concern though, after she said that the monetary authority still had more work to do to bring inflation in line with its targets.

Abrdn continues to fall

The share price of asset manager Abrdn fell to its lowest level since January, extending losses after disappointing the market with its first-half results on Tuesday. The FTSE 100 company said it had been impacted by a difficult market and a 'risk-off' environment leading to net outflows of £4.4bn for the first six months of 2023.

Elsewhere in the sector, Antofagasta pulled back after impressing the market with its first-half results on Thursday, while Rio Tinto declined despite announcing the passing of a key milestone at its Simandou iron ore project in Guinea, as it received the green light to develop essential infrastructure.

Anglo American and Glencore were also in the red early on.

Spirax-Sarco was extending losses made on Thursday after its disappointing first-half results. The engineering group, which specialises in thermal energy management and niche pumping equipment, said adjusted operating profits were down 13% organically at £171.7m, below the company-compiled consensus estimate of £176m.

The share price of Capita was given a much-needed boost after Shore Capital upgraded its rating on the business process outsourcing company from 'hold' to 'buy'. The stock, having lost over a quarter of its value in the past month, was up 4%

In small cap news, shares in EMIS Group soared 25% after the healthcare tech company’s plans to be taken private got the go-ahead this morning, as the Competition and Markets Authority provisionally approved its acquisition by UnitedHealth.

Market Movers

FTSE 100 (UKX) 7,538.75 -1.05%
FTSE 250 (MCX) 18,857.82 -0.72%
techMARK (TASX) 4,346.70 -0.69%

FTSE 100 - Risers

Fresnillo (FRES) 543.40p 0.70%
Endeavour Mining (EDV) 1,707.00p 0.59%
NATWEST GROUP (NWG) 236.80p 0.55%
Coca-Cola HBC AG (CDI) (CCH) 2,292.00p 0.53%
BT Group (BT.A) 115.65p 0.35%
Smith (DS) (SMDS) 301.00p 0.33%
Melrose Industries (MRO) 530.80p 0.30%
Burberry Group (BRBY) 2,263.00p 0.27%
Haleon (HLN) 336.95p 0.24%
Bunzl (BNZL) 2,808.00p 0.21%

FTSE 100 - Fallers

SEGRO (SGRO) 729.60p -2.85%
Abrdn (ABDN) 188.25p -2.74%
Entain (ENT) 1,343.00p -2.68%
Antofagasta (ANTO) 1,544.00p -2.43%
Unite Group (UTG) 938.50p -2.24%
Land Securities Group (LAND) 627.20p -2.15%
British American Tobacco (BATS) 2,540.00p -2.10%
Anglo American (AAL) 2,150.50p -1.96%
Glencore (GLEN) 446.00p -1.95%
3i Group (III) 1,910.50p -1.90%

FTSE 250 - Risers

FDM Group (Holdings) (FDM) 585.00p 12.93%
Capita (CPI) 21.30p 4.93%
Me Group International (MEGP) 165.60p 4.15%
TBC Bank Group (TBCG) 2,680.00p 4.08%
4Imprint Group (FOUR) 5,050.00p 2.54%
Darktrace (DARK) 367.60p 2.28%
Wizz Air Holdings (WIZZ) 2,372.00p 1.93%
Dr. Martens (DOCS) 155.30p 1.90%
Savills (SVS) 899.50p 1.64%
OSB Group (OSB) 396.60p 1.38%

FTSE 250 - Fallers

W.A.G Payment Solutions (WPS) 91.20p -5.20%
British Land Company (BLND) 317.70p -5.02%
Jupiter Fund Management (JUP) 102.80p -3.75%
Tritax Eurobox (GBP) (EBOX) 54.10p -3.39%
Great Portland Estates (GPE) 415.20p -3.08%
IntegraFin Holding (IHP) 226.80p -2.99%
Target Healthcare Reit Ltd (THRL) 71.00p -2.74%
Supermarket Income Reit (SUPR) 75.80p -2.57%
Big Yellow Group (BYG) 1,049.00p -2.51%
Liontrust Asset Management (LIO) 636.50p -2.38%