London open: Miners lead stocks lower despite positive UK GDP

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UK stocks slipped lower on Friday, reversing gains made the previous session, as investors continue to digest a barrage of mixed economic data this week.

Wheaton Precious Metals Corp.NPV (CDI)

5,010.00p

16:30 04/11/24

-2.53%

-130.00p

The FTSE 100 was trading 0.5% lower a 7,577.38 by 0838 BST, more than wiping out the 0.4% gain made the day before.

In economic news today, the UK economy expanded 0.2% between April and June, the Office for National Statistics reported, 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.

While the data was indeed positive, economists were wary about getting carried away, saying that the outlook for the second half of 2023 and beyond was still uncertain. "The upsides facing the economy, plus offsets to the impact of higher rates on borrowers, including higher interest income for savers, mean the economy should continue to grow," said Martin Beck, chief economic advisor to the EY ITEM Club. "But it will probably be well into 2024 before that growth breaks out of the sluggish holding pattern of the last year or so.”

Stocks across Europe and 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.

All eyes now turn to the release of the US producer price index due out at 1330 BST.

Miners fall, Spirax-Sarco continues decline

Wheaton Precious Metals Corp edged lower after reporting a 12.5% decline in second-quarter revenues to $265m, and a 5.1% drop in net earnings to $141.4m.

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.

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) 7,580.59 -0.50%
FTSE 250 (MCX) 18,958.64 -0.19%
techMARK (TASX) 4,369.52 -0.17%

FTSE 100 - Risers

Compass Group (CPG) 2,031.00p 0.69%
Johnson Matthey (JMAT) 1,736.50p 0.35%
BT Group (BT.A) 115.55p 0.26%
Halma (HLMA) 2,158.00p 0.23%
Haleon (HLN) 336.75p 0.18%
Burberry Group (BRBY) 2,261.00p 0.18%
NATWEST GROUP (NWG) 235.90p 0.17%
Lloyds Banking Group (LLOY) 43.06p 0.14%
Sainsbury (J) (SBRY) 268.80p 0.11%
Fresnillo (FRES) 540.20p 0.11%