- UK growth in line with expectations
- FTSE 100 holds at five-month high
- RBS, banks lead UK stocks higher
techMARK 2,639.25 -0.11%
FTSE 100 6,721.34 +0.12%
FTSE 250 15,491.63 -0.23%
Stocks finished broadly flat on Friday as investors adopted a cautious approach ahead of the weekend and refrained from building positions with markets already trading at five-month highs.
Still, London's FTSE 100 inched 8.16 points higher to 6,721.34; it has not closed above this level since May 28th. However, the index was largely rangebound for most of the session with just 24 points separating the index's intraday low (6,704) and high (6,728).
There was little reaction to third-quarter UK gross domestic product (GDP) growth figures this morning which came in as expected by analysts. The UK economy expanded at a quarter-on-quarter rate of 0.8% in the July to September period, a slight pick-up from the 0.7% growth registered in the second quarter and the strongest quarterly growth since the second quarter of 2010.
Analyst Blerina Uruçi from Barclays highlighted comments from the Monetary Policy Committee (MPC) which suggested at its latest meeting that the recovery could be stronger than originally estimated. "This raises risks that policy tightening might begin sooner than had been indicated in the August Inflation Report [...] although we would not expect it to be a dramatic revision," Uruçi said.
Limiting upside on markets today was the German IFO survey for October which showed that confidence declined slightly among that business executives for the first time in six months. The business climate index fell to 107.4 in October from 107.7 compared to a consensus estimate of 108.
Economic data from the US also failed to impress investors with a strong surge in durable goods order distorted largely by a big jump in the volatile transportation sector; core orders excluding transportation actually declined for the third straight month. Meanwhile, American consumer confidence slipped in October as sentiment was hit by the prolonged government shutdown.
"Global markets were lethargic today as investors couldn't decide whether buying on multi-year highs amidst a generally disappointing European reporting season is justified," said Financial Trader Shavaz Dhalla from Spreadex.
He said that with just 57% of European firms meeting or beating expectations in the current quarter - down from 63% earlier this week - "many analysts are bracing for a correction to the downside as investors are bound to eventually realise that earnings are equally as important as macro-economic headlines".
RBS leads banks higher
Domestic banking stocks were performing well with RBS, Lloyds and Barclays making gains. RBS was higher after leading investors urged Chancellor George Osborne not to go ahead with a 'good bank-bad bank' split of the part-nationalised lender. Meanwhile, reports that the initial public offering of its US subsidiary Citizens Financial could come sooner than expected also gave the stock a boost.
Oil and gas stocks were on the up this morning with Tullow Oil, BG Group and Premier Oil among the best performers.
Premier Oil shares
rose after the company this afternoon announced that first production from the Rochelle gas-condensate field in the UK North Sea has commenced.
Tullow yesterday announced plans to offer $500m in senior notes to repay certain existing debts.
BSkyB was in the red after analysts at Macquerie downgraded their rating on the pay-TV and broadband provider from 'outperform' to 'neutral'. They said that the company could face competition from telecoms group BT over rights to broadcast the Champion's League.
Security solutions group G4S was a high riser this morning after HSBC upgraded the stock to 'neutral' and hiked their target price from 205p to 250p. The company also announced this morning that its UK Chief Executive Richard Morrison is being replaced by Chief Operating Officer Eddie Ashton.
Speciality chemicals group Elementis surged after saying it delivered a "resilient performance" for the three months ended September 30th and saw a return to more normal trading patterns in oilfield drilling.
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 368.40p +3.34%
ARM Holdings (ARM) 983.00p +2.34%
G4S (GFS) 258.50p +2.17%
Tullow Oil (TLW) 978.50p +2.03%
Aberdeen Asset Management (ADN) 459.10p +1.93%
Sage Group (SGE) 331.90p +1.50%
Fresnillo (FRES) 1,037.00p +1.47%
WPP (WPP) 1,344.00p +1.43%
Croda International (CRDA) 2,597.00p +1.37%
Associated British Foods (ABF) 2,133.00p +1.33%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 349.70p -3.93%
Hargreaves Lansdown (HL.) 1,155.00p -2.53%
British Sky Broadcasting Group (BSY) 928.50p -2.26%
Vedanta Resources (VED) 1,068.00p -1.84%
Standard Life (SL.) 366.60p -1.43%
easyJet (EZJ) 1,329.00p -1.41%
Weir Group (WEIR) 2,318.00p -1.11%
Intertek Group (ITRK) 3,309.00p -1.08%
GKN (GKN) 372.20p -1.06%
Bunzl (BNZL) 1,357.00p -1.02%
FTSE 250 - Risers
Elementis (ELM) 266.40p +9.05%
ITE Group (ITE) 316.10p +5.12%
Grainger (GRI) 192.60p +3.88%
Premier Oil (PMO) 347.70p +3.82%
Fisher (James) & Sons (FSJ) 1,122.00p +3.70%
Computacenter (CCC) 570.00p +3.54%
Imagination Technologies Group (IMG) 290.80p +3.34%
Hunting (HTG) 917.50p +3.09%
Diploma (DPLM) 690.00p +2.37%
Hochschild Mining (HOC) 172.40p +2.31%
FTSE 250 - Fallers
Tullett Prebon (TLPR) 309.60p -3.67%
Millennium & Copthorne Hotels (MLC) 580.00p -3.25%
Keller Group (KLR) 1,030.00p -3.20%
Synergy Health (SYR) 1,060.00p -3.11%
Dialight (DIA) 1,149.00p -3.04%
De La Rue (DLAR) 845.00p -2.65%
Paragon Group Of Companies (PAG) 329.10p -2.23%
Rank Group (RNK) 150.50p -2.15%
Pace (PIC) 309.00p -2.15%
Fenner (FENR) 409.00p -2.15%