Stocks in London put in a subdued performance during midday trade on Thursday, as the market digested UK economic growth data.
The FTSE 100 index was up 3.42 points at 8,284.22. The FTSE 250 was down 69.37 points, or 0.3%, at 20,882.92, and the AIM All-Share was down 1.12 points, or 0.2%, at 770.39.
The Cboe UK 100 was up 0.1% at 828.00, the Cboe UK 250 was down 0.2% at 18,299.22, and the Cboe Small Companies was down 0.1% at 16,796.00.
Economic growth data from the UK continued to hold influence over the local market at midday. Figures from the Office for National Statistics showed no growth in June, compared to unrevised growth of 0.4% in May.
The GDP was however 0.7% higher than a year ago. In the second quarter, UK GDP growth slowed to 0.6% on-quarter from an increase of 0.7% in the first quarter. Year-on-year, second quarter UK GDP growth was 0.9%.
Some commentators, however, remained optimistic following the print. Analysts at Davy argued that there are still ‘grounds for optimism’ heading into the second half of the year.
‘Momentum looks positive for key sectors behind economic growth, especially within services. While services inflation and underlying wage growth remain high, they appear to be abating,’ Davy explained.
‘This disinflationary trend alongside a growing economy are broadly aligned to a soft landing. The Bank of England is poised to reduce interest rates further, which stands to benefit households – which so far in 2024 have not been a major driver of UK economic growth.’
In a separate release, the ONS said the UK’s trade deficit for goods and services stood at £13.3 billion in the second quarter, widened by £7.1 billion from the first quarter. Exports increased by 2.1% to £214.7 billion, while imports increased by 5.4% to £228.0 billion.
On top of that, the ONS announced that industrial production declined by 0.8% monthly in June, swung from a rise of 0.3% in May. In the second quarter, industrial output edged down 0.1% compared to the first quarter.
In European equities on Thursday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.4%.
The pound was quoted at $1.2851 at midday on Thursday in London, higher compared to $1.2847 at the equities close on Wednesday. The euro stood at $1.1010, lower against $1.1029. Against the yen, the dollar was trading at JP¥147.44, up compared to JP¥146.74.
In the FTSE 100, Admiral Group jumped 7.9%.
For the six months ended June 30, Admiral reported pretax profit of £309.8 million, up 32% from £233.9 million a year prior. Group turnover of the financial services company was up 43% to £3.21 billion from £2.24 billion.
Insurance revenue rose 38% to £2.21 billion from £1.61 billion, while return on equity came to 45% from 39% the previous year. Of note was Admiral’s interim dividend, which enjoyed a 39% bump to 71.0 pence from 51.0p.
Elsewhere, Artemis Resources was up 64%.
The mineral exploration company’s shares enjoyed a boost, after it announced the discovery of a rock chip sample with over 10,000 grammes of gold per tonne. The sample was found at the Titan prospect ,which is part of the firm’s ground reconnaissance programme at the Karratha gold project in Western Australia.
On AIM, Kazera gained 20%.
The London-based firm, which invests in early-stage mineral projects in Africa, enjoyed a boost after receiving certifications from the National Nuclear Regulator in South Africa. This will enable the Whale Head Minerals project to start mining and production for heavy mineral sands, it explained.
By contrast, accesso Technology Group lost 27%.
The Berkshire-based provider of software for the leisure, entertainment and cultural sectors lowered full-year revenue expectations to between $150 million and $153 million, rather than the ‘not less than $160 million’ communicated at the time of the group’s final results in April.
It explained this was a result of recent trading volumes in the early part of the northern hemisphere summer months, and slippage in timelines for specific new park openings. Accordingly, accesso will take measures to manage its cost base in line with this lower revenue expectation.
Stocks in New York were seen higher. The Dow Jones Industrial Average and the S&P 500 index were both called up 0.2%, and the Nasdaq Composite up 0.3%, following a strong end to the session on Wednesday.
At the close, all three indices finished in the green, with the Dow up 0.6%, at 40,008.39, the S&P 500 up 0.4% at 5,455.21, and the Nasdaq up slightly at 17,192.60.
‘Gains in the US followed inflation figures which were a smidge lower than anticipated, solidifying expectations the Federal Reserve will cut interest rates at its next opportunity in mid-September,’ said AJ Bell’s Russ Mould.
‘Later today, US retail sales and the latest numbers from Walmart will tell the market plenty about the state of US consumer demand and whether recent fears over recession have much credence to them.’
In the world of politics, Joe Biden and Kamala Harris are due to make their first joint trip since the former dropped out of this year’s presidential election.
Biden and Harris will put on a show of unity at an event in Maryland, near Washington, on Thursday, less than three weeks after their seismic switch-up at the top of the Democratic Party ticket. They are due to deliver a major economic announcement, aimed at boosting Harris’ White House hopes.
Biden indicated on Wednesday that the announcement would involve his core policy of reducing drug prices, while the White House said they would unveil steps to ‘lower costs for the American people.’
Gold was quoted at $2,456.20 an ounce early on Thursday, higher than $2,453.60 per ounce at the close.
Brent oil was trading at $80.18 a barrel early on Thursday, higher than $79.89 late Wednesday.
Still to come on Thursday’s economic calendar, there are retail sales, industrial production, and initial jobless claims - among other readings - from the US.
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