London midday: FTSE touch lower after GDP, ahead of central bank announcements

The FTSE 100 was down 0.1% at 7,470.22.

Figures released earlier by the Office for National Statistics showed the economy returned to growth in October but the UK is still heading for recession.

The economy grew 0.5% following a 0.6% contraction in September, when it took a hit from the funeral of Queen Elizabeth. This was a touch ahead of economists’ expectations for 0.4% growth.

In the three months to October, however, the economy shrank by 0.3%, versus expectations of a 0.4% contraction. This marked the biggest decline since early 2021.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the monthly rise in GDP is likely to have been more of a temporary upswing rather than the start of a more positive chapter for the economy.

"A rebound in services largely accounted for the lift, after many companies scaled back promotional events, and workers had a bank holiday for the monarch’s funeral in September. However, production remains flat and while construction grew by 1.1%, more recent data indicates that sentiment in the building sector soured in November," she said.

"Caution is in the air in financial markets ahead of a series of crunch central bank meetings around the world this week, with yet more interest rate hikes set to be unwrapped as inflation remains stubborn," Streeter said.

"The Bank of England is still expected to raise rates though on Thursday by 0.5%, despite the fragility in the economy which is showing through so starkly as inflationary pressures stay so elevated."

In equity markets, precious metals miner Fresnillo and online supermarket Ocado were the worst performers on the top-flight index.

International Distribution Services also fell after a downgrade to ‘hold’ at HSBC and as Royal Mail strikes took their toll.

Online fashion retailer Asos slumped following a report it is in talks with lenders about whether to hire a restructuring expert following the departure of its chief financial officer.

On the upside, London Stock Exchange Group surged to the top of the FTSE 100 after Microsoft agreed to buy a 4% stake in the company as part of 10-year strategic partnership for next-generation data and analytics and cloud infrastructure solutions.

Wood Group also rallied after an upgrade to ‘buy’ from ‘hold’ at Jefferies, which cited an improved in medium-term cashflow outlook.

Market Movers

FTSE 100 (UKX) 7,470.22 -0.09%
FTSE 250 (MCX) 18,773.48 -0.75%
techMARK (TASX) 4,402.51 0.11%

FTSE 100 - Risers

London Stock Exchange Group (LSEG) 7,664.00p 3.48%
BAE Systems (BA.) 839.80p 1.72%
Centrica (CNA) 93.44p 1.30%
Entain (ENT) 1,416.00p 1.18%
Experian (EXPN) 2,928.00p 1.14%
Haleon (HLN) 317.40p 0.89%
Halma (HLMA) 2,150.00p 0.80%
Croda International (CRDA) 6,850.00p 0.79%
3i Group (III) 1,348.50p 0.78%
Vodafone Group (VOD) 87.40p 0.75%

FTSE 100 - Fallers

Fresnillo (FRES) 838.00p -4.12%
Ocado Group (OCDO) 668.20p -2.62%
Unite Group (UTG) 904.00p -2.59%
British Land Company (BLND) 386.40p -2.57%
Endeavour Mining (EDV) 1,686.00p -2.20%
Land Securities Group (LAND) 614.00p -2.01%
Sainsbury (J) (SBRY) 222.10p -1.90%
Next (NXT) 5,736.00p -1.88%
Kingfisher (KGF) 237.10p -1.86%
Airtel Africa (AAF) 115.90p -1.78%

FTSE 250 - Risers

Wood Group (John) (WG.) 132.85p 4.81%
Petrofac Ltd. (PFC) 81.15p 2.01%
Apax Global Alpha Limited (APAX) 186.00p 1.97%
Moonpig Group (MOON) 127.10p 1.68%
National Express Group (NEX) 155.60p 1.57%
Bridgepoint Group (Reg S) (BPT) 194.00p 1.52%
Drax Group (DRX) 613.00p 1.49%
FirstGroup (FGP) 97.40p 1.46%
Energean (ENOG) 1,274.00p 1.19%
Man Group (EMG) 217.60p 1.12%

FTSE 250 - Fallers

Mitchells & Butlers (MAB) 126.80p -7.58%
Currys (CURY) 65.30p -6.71%
Aston Martin Lagonda Global Holdings (AML) 152.30p -5.08%
Home Reit (HOME) 44.60p -3.88%
ASOS (ASC) 563.00p -3.76%
888 Holdings (DI) (888) 92.50p -3.70%
Marks & Spencer Group (MKS) 118.75p -3.49%
International Distributions Services (IDS) 205.20p -3.48%
Hammerson (HMSO) 23.06p -3.23%
Dunelm Group (DNLM) 945.50p -3.13%