London midday: Stocks maintain gains as investors mull GDP

(Sharecast News) - London stocks were still firmly in the black by midday on Thursday as weaker-than-expected UK growth figures added to expectations of a rate cut next month. The FTSE 100 was up 0.7% at 8,362.76.

Data released earlier by the Office for National Statistics showed the economy grew 0.1% in November following contractions of 0.1% in October and September. This was below expectations of 0.2% growth, however.

Most of the growth was put down to a 0.1% expansion in the services sector, following a revised 0.1% drop the month before.

The figures showed that production output fell by 0.4% in November following an unrevised 0.6% contraction in October, while construction output grew 0.4% following a revised 0.3% decline in October.

Liz McKeown, director of economic statistics at the ONS, said: "The economy continues to be broadly flat, having grown slightly in November following two small falls in the previous months.

"Services grew a little, with wholesaling, pubs and restaurants and IT companies all doing well, partially offset by falls in accountancy and business rental and leasing.

"Construction also grew led by new commercial developments, while production continued to decline in November with further falls across a range of manufacturing industries and oil and gas extraction."

On Wednesday, ONS data showed that inflation unexpectedly fell in December after two months of increases.

Consumer price inflation rose 2.5%, down from 2.6% in November, and versus expectations for it to remain unchanged.

Meanwhile, core inflation - which excludes food and energy - declined to 3.2% from 3.5%, versus expectations for a smaller drop to 3.4%.

Services inflation eased to 4.4% in December from 5% the month before. Economists were expecting 4.8%.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: "European markets are waking up with a spring in their step, thanks to cooling US core inflation and upbeat bank earnings fuelling risk-on sentiment. The FTSE 100 is joining the party, up 0.6% in early trading, despite UK GDP data for November that showed growth of a meagre 0.1%.

"Although this was shy of expectations it still signals some resilience, with services and construction pulling their weight despite a manufacturing slump. With inflation easing and sluggish economic growth, a 25bps rate cut by the Bank of England in February seems increasingly likely. UK government bond yields have felt an immediate impact, pulling back yesterday from multi-decade highs, offering some relief to risk-on investors and borrowers alike."

In equity markets, property portal Rightmove was the standout gainer on the FTSE 100 on rate cut hopes and as the latest residential market survey from the Royal Institution of Chartered Surveyors showed that the housing market ended 2024 on a strong note, with prices rising across the country.

Chilean miner Antofagasta was up as it reiterated its 2025 outlook, despite fourth-quarter copper production narrowly missing forecasts.

Trustpilot rallied as it said full-year adjusted EBITDA was set to be ahead of consensus.

Luxury fashion brand Burberry shot higher after Cartier owner Richemont posted a much better-than-expected 10% increase in third-quarter sales. Watches of Switzerland also got a boost.

Deliveroo and Bakkavor gained after a fourth-quarter trading update and a full-year update, respectively.

On the downside, Taylor Wimpey lost ground as the housebuilder backed its profit expectations for the full year but sounded a note of caution as it pointed to increased build costs in 2025.

Educational publisher Pearson was weaker even as it reported 3% underlying group sales growth for 2024, flagging expected adjusted operating profit of £595m to £600m, up 10% year-on-year, with a margin of 16.8%.

Primark owner AB Foods was under the cosh after a downgrade to 'sell' at Citi.

Dunelm fell as the homeware retailer reaffirmed its full-year profit expectations and reported an uptick in first-half, but said the environment remained "challenging".

Premier Inn owner Whitbread was also in the red as it held full-year guidance and said UK accommodation sales in the Christmas/New Year period were up 2%.

Market Movers

FTSE 100 (UKX) 8,362.76 0.74% FTSE 250 (MCX) 20,364.28 0.15% techMARK (TASX) 4,632.97 0.28%

FTSE 100 - Risers

Rightmove (RMV) 653.40p 4.21% Antofagasta (ANTO) 1,758.50p 3.62% Fresnillo (FRES) 689.00p 3.45% Beazley (BEZ) 817.50p 2.44% Rolls-Royce Holdings (RR.) 575.80p 2.20% Experian (EXPN) 3,585.00p 1.90% Entain (ENT) 634.20p 1.77% Glencore (GLEN) 375.25p 1.76% BP (BP.) 430.40p 1.75% Games Workshop Group (GAW) 13,020.00p 1.72%

FTSE 100 - Fallers

Taylor Wimpey (TW.) 109.50p -4.24% easyJet (EZJ) 489.10p -3.38% Pearson (PSON) 1,252.00p -3.32% JD Sports Fashion (JD.) 90.56p -2.50% Associated British Foods (ABF) 1,937.50p -2.32% Whitbread (WTB) 2,904.00p -2.29% BT Group (BT.A) 138.60p -1.42% Flutter Entertainment (DI) (FLTR) 21,150.00p -1.21% Diploma (DPLM) 4,250.00p -1.12% United Utilities Group (UU.) 969.60p -1.06%

FTSE 250 - Risers

Trustpilot Group (TRST) 320.50p 16.76% Burberry Group (BRBY) 1,047.00p 8.84% Raspberry PI Holdings (RPI) 640.50p 7.02% Watches of Switzerland Group (WOSG) 516.50p 6.76% Bakkavor Group (BAKK) 149.50p 4.55% Deliveroo Class (ROO) 135.00p 4.33% Ferrexpo (FXPO) 101.80p 3.46% Oxford Nanopore Technologies (ONT) 149.20p 2.90% Petershill Partners (PHLL) 266.50p 2.90% Me Group International (MEGP) 202.50p 2.48%

FTSE 250 - Fallers

Safestore Holdings (SAFE) 612.00p -7.90% W.A.G Payment Solutions (WPS) 83.20p -4.81% B&M European Value Retail S.A. (DI) (BME) 308.90p -4.07% Dunelm Group (DNLM) 993.50p -3.54% Ashmore Group (ASHM) 151.70p -3.07% Grainger (GRI) 215.00p -2.93% Travis Perkins (TPK) 676.50p -2.52% Wizz Air Holdings (WIZZ) 1,256.00p -2.18% Ibstock (IBST) 167.00p -2.00% Marshalls (MSLH) 256.50p -1.91%