London midday: Stocks hold onto small gains as pound dips after UK GDP data

The FTSE 100 was up 0.2% to 7,527.68, while the pound was down 0.1% against the dollar to 1.2961 after the Office for National Statistics revealed that UK gross domestic product grew 0.2% in the first three months of the year, down from a previous estimate of 0.3% and from 0.7% growth in the final quarter of 2016 as inflation took its toll on spending in the aftermath of the Brexit vote.

GDP was also revised lower on an annual basis, to 2.0% from a previous estimate of 2.1%.

The estimate of growth in services output - which accounts for around 80% of UK economic output - was revised down to 0.2% from 0.3%, reflecting a sharper slowdown in consumer-facing sectors than previously thought.

Chris Williamson, chief business economist at IHS Markit, said: "The economy got off to an even worse start to the year than previously thought, according to fresh official data. There’s a strong likelihood that growth will pick up in the second quarter, but whether robust growth can be sustained further ahead remains highly uncertain.

“It’s hard to see any bright spots in the breakdown of the data with the sole exception of business services and finance, which grew 0.6%. The broader service sector, which has been the mainstay of growth in recent years, grew just 0.2%."

Elsewhere, data from the British Bankers Association showed British high street banks approved fewer mortgages last month, though consumer lending via credit cards bounced back amid a bumper Easter for retailers.

Investors were also mulling over the latest minutes from the Federal Reserve released late on Wednesday, which showed most members of the rate-setting committee think a rate hike should happen soon, as long as the economy continues to rebound from first-quarter weakness.

Meanwhile, oil prices gave up their earlier gains to trade lower after OPEC members agreed to extend by nine months an earlier agreement to cut production by 1.8m barrels a day, although Saudi Arabian oil minister Khalid al-Falih said any deeper cuts were unnecessary. West Texas Intermediate was down 1.7% to $50.50 a barrel and Brent crude was 1.5% lower at $53.14.

In corporate news, Central and Eastern European-focused low-cost airline Wizz Air flew higher as it reported record profit for the year to the end of March despite "challenging" conditions including low fares and increasing fuel prices.

Asset manager Intermediate Capital surged as it hiked its final dividend and reported a jump in full-year pre-tax profit, while Halfords gained ground despite reporting a drop in full-year profit, as it lifted its dividend and said cash generation remained strong.

Card Factory also advanced after saying it made "a good start to the year" as first-quarter like-for-like store sales were at the upper end of its targeted range of 1% to 3% growth, while Pets at Home rose after reporting 1.5% growth in like-for-like sales last year thanks to its vet services businesses.

Rising highest in the FTSE 100 was 3i, which got a boost as Canaccord Genuity bumped up its price target on the stock to 975p from 875p following strong full-year results earlier this month.

On the downside, water company United Utilities fell as it upped its dividend 1.1% after a year where revenue and profit both leaked modestly lower but it remained confident of meeting its long-term targets.

Payment systems provider PayPoint was also in the red despite hailing "good growth" in its core retail networks as gross revenue rose 3.6% in the year to the end of March, while BT Group was weaker after a downgrade to 'underperform' at Exane BNP Paribas.

Petrofac shares plunged to their lowest since 2009 after it suspended chief operating officer Marwan Chedid as the company is investigated by the Serious Fraud Office over bribery and money laundering allegations.

Tate & Lyle was lower even as it posted an 85% jump in full-year pre-tax profit, underpinned by a weaker pound and a solid performance from both divisions, while OneSavings Bank took a hit after JC Flowers sold a 10% stake in the bank.

B&M European traded lower despite saying annual profits rose 26%, while Inchcape declined after it said group revenue rose 18% at actual currency and 8.1% at constant currency in the fourth months to the end of April.

Morrisons, Bunzl, and Capita were all on the back foot as their stock went ex-dividend.

Market Movers

FTSE 100 (UKX) 7,527.68 0.17%
FTSE 250 (MCX) 19,963.43 0.06%
techMARK (TASX) 3,607.52 0.02%

FTSE 100 - Risers

3i Group (III) 863.00p 2.68%
Unilever (ULVR) 4,281.50p 1.64%
Convatec Group (CTEC) 321.90p 1.42%
Reckitt Benckiser Group (RB.) 7,835.00p 1.21%
Royal Mail (RMG) 434.00p 1.17%
Burberry Group (BRBY) 1,772.00p 1.14%
easyJet (EZJ) 1,359.00p 1.12%
Lloyds Banking Group (LLOY) 73.33p 1.05%
Vodafone Group (VOD) 227.55p 0.98%
Coca-Cola HBC AG (CDI) (CCH) 2,281.00p 0.97%

FTSE 100 - Fallers

Mediclinic International (MDC) 798.50p -1.78%
BT Group (BT.A) 312.90p -1.25%
SSE (SSE) 1,525.00p -1.17%
TUI AG Reg Shs (DI) (TUI) 1,160.00p -1.11%
Anglo American (AAL) 1,073.00p -1.01%
Barclays (BARC) 214.45p -0.92%
Smiths Group (SMIN) 1,580.00p -0.88%
DCC (DCC) 7,455.00p -0.86%
Babcock International Group (BAB) 951.50p -0.83%
Paddy Power Betfair (PPB) 8,325.00p -0.77%

FTSE 250 - Risers

Intermediate Capital Group (ICP) 901.50p 11.71%
Wizz Air Holdings (WIZZ) 2,141.00p 10.02%
Evraz (EVR) 199.70p 3.31%
Grainger (GRI) 269.90p 3.21%
Countryside Properties (CSP) 306.30p 3.10%
Britvic (BVIC) 741.50p 2.91%
CLS Holdings (CLI) 204.80p 2.91%
GVC Holdings (GVC) 786.50p 2.81%
Paysafe Group (PAYS) 494.50p 2.70%
Hastings Group Holdings (HSTG) 320.10p 2.53%

FTSE 250 - Fallers

Petrofac Ltd. (PFC) 437.70p -28.83%
Acacia Mining (ACA) 269.30p -11.70%
OneSavings Bank (OSB) 435.00p -6.95%
Amec Foster Wheeler (AMFW) 510.50p -4.40%
Capita (CPI) 553.50p -4.16%
Wood Group (John) (WG.) 723.50p -3.08%
Greencore Group (GNC) 237.60p -2.90%
Softcat (SCT) 408.10p -2.60%
PayPoint (PAY) 964.50p -2.28%
Tate & Lyle (TATE) 772.50p -2.22%