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London open: Stocks edge up despite uninspiring GDP data
London stocks edged higher in early trade on Thursday despite uninspiring UK GDP data, taking their cue from a solid session on Wall Street.
At 0830 GMT, the FTSE 100 was up 0.3% at 7,519.27.
Figures released earlier by the Office for National Statistics showed that the economy contracted more than first estimated in the three months to September as household incomes fell.
GDP shrank 0.3% in the third quarter, versus an initial estimate of a 0.2% contraction. The figures showed that household incomes fell by 0.5% during the quarter – the fourth consecutive quarter of negative growth.
The revised data also showed that the economy grew 0.6% in the first quarter and 0.1% in the second, down from previous estimates of 0.7% and 0.2% growth, respectively.
The revisions reflect bigger falls in manufacturing and production than previously estimated. It was suggested that this might reflect changes in business and consumer behaviour in response to higher energy prices after the regulator’s energy price cap rose in April.
The ONS said business investment declined 2.5% in quarterly terms, compared with an initial estimate of a 0.5% fall.
ONS director of economic statistics Darren Morgan said: “Our revised figures show the economy performed slightly less well over the last year than we previously estimated, with manufacturing and electricity generation notably weaker.
“Household incomes continued to fall in real terms, albeit at a slower rate than in the previous two quarters, while – taking account of inflation – household spending fell for the first time since the final Covid-19 lockdown in the spring of 2021.”
Corporate news was thin on the ground as we head towards the Christmas break, but electronics maker discoverIE Group announced the acquisition of US-based Magnasphere Corporation for $22m (£19.1m).
Magnasphere makes magnetic sensors and switches for industrial electronic applications. DiscoverIE said the acquisition is expected to be immediately accretive to group underlying earnings and underlying operating margin.
Elsewhere, LondonMetric was knocked lower by a downgrade to ‘neutral’ at Citi.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
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|||||||
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Croda International Plc | +1.44% | +96.00 | 6,746.00 |
| 2 |  |
Shell Plc | +1.32% | +31.00 | 2,385.50 |
| 3 |  |
Carnival Plc | +1.31% | +8.00 | 619.00 |
| 4 |  |
Hargreaves Lansdown Plc | +1.19% | +10.20 | 866.00 |
| 5 |  |
Kingfisher Plc | +1.16% | +2.70 | 236.10 |
| 6 |  |
Itv Plc | +1.15% | +0.84 | 74.12 |
| 7 |  |
Admiral Group Plc | +1.11% | +23.00 | 2,099.00 |
| 8 |  |
International Consolidated Airlines Group S.a. | +1.10% | +1.42 | 131.00 |
| 9 |  |
Compass Group Plc | +0.99% | +19.00 | 1,939.50 |
| 10 |  |
Bunzl Plc | +0.93% | +26.00 | 2,819.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
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| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
United Utilities Group Plc | -1.62% | -16.50 | 1,001.50 |
| 2 |  |
British American Tobacco Plc | -0.91% | -30.50 | 3,323.00 |
| 3 |  |
Segro Plc | -0.68% | -5.20 | 761.00 |
| 4 |  |
Rightmove Plc | -0.34% | -1.80 | 525.00 |
| 5 |  |
Centrica Plc | -0.33% | -0.32 | 95.56 |
| 6 |  |
Sage Group Plc | -0.32% | -2.40 | 758.40 |
| 7 |  |
Johnson Matthey Plc | -0.23% | -5.00 | 2,134.00 |
| 8 |  |
Vodafone Group Plc | -0.15% | -0.13 | 84.37 |
| 9 |  |
3i Group Plc | -0.15% | -2.00 | 1,327.00 |
| 10 |  |
Bhp Group Limited | -0.08% | -2.00 | 2,583.00 |
US close: Dow adds 500 points as Santa brings his cheer
Wall Street stocks closed in positive territory on Wednesday, as traders refused to give up hope of a possible Santa rally.
At the close, the Dow Jones Industrial Average was up 1.8% at 33,376.48, as the S&P 500 added 1.49% to 3,878.44, and the Nasdaq Composite was ahead 1.54% at 10,709.37.
The Dow closed 526.74 points higher on Wednesday, extending the gains it recorded on Tuesday.
Wednesday’s primary focus was the Conference Board’s consumer confidence index, with data revealing Americans consumers were unexpectedly more upbeat at the end of 2022.
The consumer confidence index jumped from a reading of 101.4 for November to 108.3 in December – its highest reading since the previous April and well ahead of expectations for a print of 101.
Elsewhere on the economic front, US mortgage applications rose 0.9% in the week ended 16 December, according to the Mortgage Bankers Association, cooling off from the previous week’s 3.2% jump.
Applications to refinance a home loan surged 6% as consumers took advantage of a fall in mortgage rates, while applications to purchase a home edged 0.1% lower.
On another note, existing home sales in the US slowed more than expected last month.
According to the National Association of Realtors, in seasonally adjusted terms existing home sales dropped at a month-on-month pace of 7.7% in November to reach an annual rate of 4.09m.
Economists had anticipated a reading of 4.20m.
In the corporate space, Rite Aid tumbled 17.23% despite posting earnings and revenues that beat estimates.
Micron Technology closed up 1.01%, but was last down 1.8% in after-hours action, as it posted its latest set of quarterly results after the closing bell.
Thursday newspaper round-up: Brexit, Pret A Manger, THG
Rishi Sunak is under growing pressure to offer more help to older workers who have fallen out of the workforce due to ill health, as official figures show a sharp increase in the rates of long-term sickness in every region of the UK except London. Highlighting deep regional divisions, figures from the Office for National Statistics show economic inactivity due to long-term sickness has increased most among 50 to 64-year-olds outside the capital since the Covid pandemic. – Guardian
More than three-quarters of firms say the government’s post-Brexit trade deal with the EU has not helped them to expand their business in the last two years despite promises that it was an “oven-ready” deal. A survey by the British Chambers of Commerce (BCC) has prompted the business lobby group to present the government with five urgent recommendations for enhancing the agreement, which has left many exporters struggling to sell into the EU under the current terms. – Guardian
Pret A Manger is axing almost all of its vegetarian-only stores as the novelty of meat-free branches wears off. The sandwich chain is to shut or rebrand 75pc of its Veggie Pret stores six years after they first launched. – Telegraph
Sir Tom Hunter, the billionaire investor and philanthropist, has reaffirmed his commitment to THG, insisting that Matt Moulding’s struggling beauty-to-nutrition retailer has been a “a real success story” (Greig Cameron writes). Hunter, 61, has had a business relationship with Moulding, 50, since 2009 and been a vocal supporter even as THG — formerly The Hut Group — has stumbled. – The Times
Sharan Pasricha, the wealthy entrepreneur behind Gleneagles and the trendy Hoxton hotel chain, has collected an estimated €260 million by selling the underlying assets of the hotels in Amsterdam and Paris. The near €1 million per room paid by Schroders, the buyer of the two properties, is thought to be the biggest per-room price ever paid in Europe for a hotel without suites. – The Times
