London open: Stocks edge lower as ex-divs weigh; GDP in focus
London equity markets edged lower in early trade, with ex-dividend stocks proving to be a drag as investors digested the latest UK GDP reading.
At 0850 BST, the FTSE 100 was down 0.2% at 7,203.96.
Data released earlier by the Office for National Statistics showed the economy grew by 4.8% between April and June as lockdown restrictions eased, in line with expectations.
This was close to the 5% growth predicted by the Bank of England last week and left the economy 4.4% below its pre-pandemic peak.
In the month of June, GDP rose 1%, which was ahead of the 0.8% expected by economists. However, May’s increase was revised down to 0.6% from 0.8%.
The services sector was the biggest contributor to growth. In June, health, hospitality, and advertising services were the main contributors to the growth in services.
The ONS said visits to GPs increased in June compared with recent months, while NHS Test and Trace services and vaccine schemes across also continued to contribute positively to overall output levels in health.
ONS deputy national statistician Jonathan Athow said: "The UK economy has continued to rebound strongly, with hospitality benefiting from the first full month of indoor dining, while spending on advertising was boosted by the reopening of many services."
ING economist James Smith said: "The latest UK GDP data confirms what we already knew - that the economy was on fire through the second quarter.
"Admittedly, a large part of the 4.8% quarterly growth is a simple function of the re-openings. And indeed, if we look at June data specifically, 0.45% of the 1% monthly growth came from health, which is linked to people visiting their doctor more. Still, quirks aside, we saw a clear increase in optimism among both consumers and businesses through the spring, and that will undoubtedly have helped drive a faster recovery in activity."
In equity markets, Rio Tinto, Barclays, Shell and Next were all lower as they traded without entitlement to the dividend. Rio was particularly weak as it went ex-interim and special dividend.
On the upside, Aviva rallied after saying it would return at least £4bn to shareholders over the next year as the insurer reported a 17% increase in adjusted interim profit.
Cineworld jumped to the top of the FTSE 250 after it posted an interim operating loss of $208.9m as the Covid pandemic forced the closure of cinemas in the opening months of the year, but said trading since reopening had been "encouraging".
Holiday company TUI also gained after it reported a sharp rise in third-quarter revenue but said sales were down almost 80% for the first nine months of 2021.
Market Movers
FTSE 100 (UKX) 7,203.96 -0.22%
FTSE 250 (MCX) 23,769.02 0.05%
techMARK (TASX) 4,744.44 0.19%
FTSE 100 - Risers
Aviva (AV.) 415.70p 2.19%
Weir Group (WEIR) 1,710.00p 1.63%
Phoenix Group Holdings (PHNX) 694.20p 1.40%
Admiral Group (ADM) 3,617.00p 0.92%
Whitbread (WTB) 3,201.00p 0.88%
British American Tobacco (BATS) 2,698.00p 0.84%
Coca-Cola HBC AG (CDI) (CCH) 2,739.00p 0.77%
Vodafone Group (VOD) 120.90p 0.77%
Land Securities Group (LAND) 726.80p 0.69%
BT Group (BT.A) 178.05p 0.68%
FTSE 100 - Fallers
Rio Tinto (RIO) 5,593.00p -8.33%
Evraz (EVR) 607.00p -5.75%
Legal & General Group (LGEN) 274.50p -1.86%
Pearson (PSON) 787.00p -1.55%
Spirax-Sarco Engineering (SPX) 15,570.00p -1.24%
Barclays (BARC) 184.34p -1.16%
Melrose Industries (MRO) 171.95p -1.01%
Entain (ENT) 1,946.00p -0.99%
Next (NXT) 8,016.00p -0.84%
Fresnillo (FRES) 785.00p -0.83%
FTSE 250 - Risers
Cineworld Group (CINE) 66.32p 8.26%
Cairn Energy (CNE) 185.30p 4.22%
TUI AG Reg Shs (DI) (TUI) 343.50p 3.31%
Savills (SVS) 1,261.00p 2.35%
RHI Magnesita N.V. (DI) (RHIM) 4,074.00p 2.05%
Harbour Energy (HBR) 369.20p 1.93%
Discoverie Group (DSCV) 1,066.00p 1.91%
Rank Group (RNK) 184.20p 1.77%
SSP Group (SSPG) 264.70p 1.61%
XP Power Ltd. (DI) (XPP) 5,630.00p 1.44%
FTSE 250 - Fallers
Ferrexpo (FXPO) 418.40p -4.74%
Genesis Emerging Markets Fund Ltd Ptg NPV (GSS) 870.00p -2.25%
Jupiter Fund Management (JUP) 269.80p -2.25%
Direct Line Insurance Group (DLG) 309.30p -2.12%
Vivo Energy (VVO) 103.80p -1.89%
Liontrust Asset Management (LIO) 2,125.00p -1.62%
Hammerson (HMSO) 36.30p -1.49%
Clarkson (CKN) 3,535.00p -1.39%
Meggitt (MGGT) 818.60p -1.37%
Greencoat UK Wind (UKW) 133.40p -1.19%