London open: Stocks nudge up as investors mull UK GDP figures
London stocks nudged higher in early trade on Wednesday as data showed the UK economy continued to stagnate in July.
At 0855 BST, the FTSE 100 was up 0.1% at 8,213.59.
Figures released earlier by the Office for National Statistics showed zero growth in gross domestic product, unchanged on June. Economists had been expecting 0.2% growth.
Output in the services sector grew 0.1% in July following a 0.1% decline in June. Meanwhile, production output fell 0.8% following 0.8% growth in June and construction output fell 0.4% following 0.5% growth in June.
Liz McKeown, director of economic statistics at the ONS, said: "July’s monthly services growth was led by computer programmers and health, which recovered from strike action in June. These gains were partially offset by falls for advertising companies, architects and engineers.
"Manufacturing fell, overall, with a particularly poor month for car and machinery firms, while construction also declined."
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "UK growth continued to flatline in July after a lacklustre June but it’s raising the expectations for interest rate cuts, which is giving a little support for UK stocks early in the session.
"A rise in output from the large services sector was offset by a fall in production and construction during the month. This picture of stagnation is another piece in the jigsaw for Bank of England policymakers to consider when they meet next week.
"There may be slightly heightened concerns around the table that the economy is on the cusp of a downturn. This will reinforce expectations for two rate cuts in the months to come, but the jury is still very much out when it comes to next week’s decision. Financial markets have been assessing the chance that rates will be kept on hold as above 75%, so this data point alone is unlikely to move the dial significantly."
In equity markets, Rightmove ticked higher after it rejected a £5.6bn takeover proposal from Australian peer REA Group, labelling it "wholly opportunistic" and saying it undervalues the UK property platform’s future prospects.
On 5 September, REA proposed 305p in cash and 0.0381 new REA shares for each Rightmove share, which implied an offer value of 698p - a 26% premium to the closing price before REA confirmed speculation about its intentions.
REA said in a statement that the proposal was a “highly compelling proposition”, while Rightmove urged its shareholders not to take any action.
WH Smith surged as it reiterated its full-year outlook and unveiled a £50m share buyback after a buoyant fourth quarter.
The retailer said group sales rose 6% in the three months to 31 August, which includes its peak summer trading period, or by 4% on a like-for-like basis.
Trustpilot was also in the black as it said first-half profit was ahead of market expectations and announced a further £20m share buyback.
On the downside, Rentokil tumbled as the pest control firm scaled back its profit guidance for the full year after weaker-than-expected summer trading in North America.
Dunelm fell as it reported a rise in full-year profit and sales despite a "softer" market and said it continues to see "a challenging consumer environment" and that the timing of a sector recovery remains uncertain.
Market Movers
FTSE 100 (UKX) 8,213.59 0.09%
FTSE 250 (MCX) 20,653.14 -0.01%
techMARK (TASX) 4,847.34 -0.15%
FTSE 100 - Risers
Antofagasta (ANTO) 1,707.50p 2.65%
Burberry Group (BRBY) 585.00p 2.45%
Fresnillo (FRES) 526.00p 2.33%
Prudential (PRU) 615.00p 2.26%
Glencore (GLEN) 371.00p 2.08%
NATWEST GROUP (NWG) 332.00p 1.90%
Rio Tinto (RIO) 4,646.00p 1.86%
Associated British Foods (ABF) 2,201.00p 1.76%
Anglo American (AAL) 2,042.50p 1.67%
BT Group (BT.A) 142.35p 1.64%
FTSE 100 - Fallers
Rentokil Initial (RTO) 394.80p -16.97%
AstraZeneca (AZN) 12,222.00p -1.48%
Smurfit Westrock (DI) (SWR) 3,295.00p -1.41%
Berkeley Group Holdings (The) (BKG) 4,920.00p -1.16%
Pearson (PSON) 1,040.50p -1.14%
GSK (GSK) 1,654.00p -1.02%
Unite Group (UTG) 979.00p -0.96%
Admiral Group (ADM) 2,820.00p -0.88%
InterContinental Hotels Group (IHG) 7,580.00p -0.84%
Hikma Pharmaceuticals (HIK) 1,901.00p -0.83%
FTSE 250 - Risers
WH Smith (SMWH) 1,380.00p 12.47%
Trustpilot Group (TRST) 211.00p 9.33%
Baltic Classifieds Group (BCG) 296.00p 3.68%
Hochschild Mining (HOC) 172.80p 2.61%
Dr. Martens (DOCS) 67.45p 2.59%
Carnival (CCL) 1,117.00p 2.43%
Aston Martin Lagonda Global Holdings (AML) 152.40p 2.42%
PZ Cussons (PZC) 104.60p 2.35%
Ibstock (IBST) 183.40p 2.12%
Rotork (ROR) 329.40p 2.11%
FTSE 250 - Fallers
Mitie Group (MTO) 119.00p -1.98%
CMC Markets (CMCX) 304.50p -1.93%
TBC Bank Group (TBCG) 2,800.00p -1.93%
Mitchells & Butlers (MAB) 288.50p -1.54%
Bloomsbury Publishing (BMY) 666.00p -1.48%
AO World (AO.) 107.00p -1.47%
JPMorgan European Discovery Trust (JEDT) 441.00p -1.45%
Coats Group (COA) 95.70p -1.34%
Jupiter Fund Management (JUP) 80.00p -1.23%
Dunelm Group (DNLM) 1,222.00p -1.05%