- UK GDP beats expectations in Q3
- Japan to boost asset purchases, says newspaper
- Unilever and AstraZeneca provide a lift after Q3 updates
After a cautious start, the FTSE 100 was registering decent gains by Thursday lunchtime after UK gross domestic product (GDP) figures showed the country exiting its double-dip recession and speculation about Japanese stimulus lifted sentiment.
The UK economy xpanded by 1.0% in the third quarter, compared with the 0.4% decline seen in the second quarter and well ahead of the 0.6% increase expected. That was the strongest reading since late 2007 and means that the economy exited from its double-dip recession.
Analysts at Barclays Research and Investec now expect quantitative easing (QE) to be off the table at the next Monetary Policy Committee (MPC) meeting. Having said that, a poll by Reuters out over the weekend placed the probability for further QE in November at just 60%.
"We have changed our policy call and now expect the current round of asset purchases, due to be completed at the end of this month, to be the last (we had previously expected an additional £50bn of QE in November)," they said.
"Our change of view has been prompted by stronger-than-expected Q3 GDP data as well as relatively upbeat comments on underlying economic growth from two pivotal members of the MPC. In light of these developments, as well as recent signs of additional inflation stickiness, we now think it is unlikely that a majority of the MPC will support additional QE in November."
Meanwhile, reports from a Japanese newspaper that the Bank of Japan would boost stimulus were also helped to lift markets higher today. According to the Nikkei newspaper, Japan will up its asset purchase programme by 10trn yen to 90trn yen at its policy meeting on October 30th.
In other central bank news, the Federal Reserve confirmed last night that it would continue to buy mortgage-backed securities until a better economic recovery - specifically in the jobs market - is achieved.
A barrage of economic data is due out in the US today, including weekly initial jobless claims, durable goods orders and pending home sales. For jobless claims in particular, these are expected to have been 370,000 last week, down from the 388,000 rise the week before.
FTSE 100: Unilever and Astra impress; WPP sinks after Q3 slowdown
Consumer products giant Unilever was in demand after underlying sales growth beat expectations in the third quarter, helped by a strong performance in the emerging markets.
Pharmaceuticals giant AstraZeneca was higher after beating earnings expectations in third quarter and maintained its full-year targets.
Heading the other way was media giant WPP after it admitted its third-quarter growth was slower than that seen in the second quarter, which also came in short of expectations, while the fourth quarter is set to slow further.
Costa and Premier Inn owner Whitbread also fell after Citigroup downgraded its rating on the stock to 'neutral'.
Mining giant Anglo American gained after a solid third-quarter production statement, with increases experiences across five of the seven commodities it mines. In contrast, Kazakhmys was unwanted after failing to impress with its own third-quarter figures despite saying that it's on track to meet full-year targets.
Precious metals producer Fresnillo rose after approving the feasibility study for the development of the $500m San Julian silver project in Mexico.
FTSE 250: AZ Electronic, Debenhams and Salamander lead the risers
Speciality chemicals producer AZ Electronic Materials jumped after maintaining full-year guidance, saying that it made "solid progress" in the third quarter despite an uncertain macro-economic environment. Group revenues rose 1% year-on-year in the quarter.
Department store group Debenhams surged after the company reported resilient full-year results and said it would be continuing its share buy-back programme for the next 12 months amidst 'challenging' conditions for the British consumer.
Salamander Energy, an independent upstream oil and gas exploration and production company, gained after saying the Bravo jacket is now en route to the Bualuang oil field, where the company's operated block B8/38 is located, in the Gulf of Thailand.
FTSE 100 - Risers
Unilever (ULVR) 2,330.00p +2.87%
Johnson Matthey (JMAT) 2,279.00p +2.84%
Fresnillo (FRES) 1,934.00p +2.38%
Kingfisher (KGF) 286.10p +2.00%
Prudential (PRU) 855.50p +1.54%
Barclays (BARC) 233.45p +1.54%
Old Mutual (OML) 173.30p +1.46%
Aviva (AV.) 335.00p +1.42%
Lloyds Banking Group (LLOY) 40.99p +1.36%
Aberdeen Asset Management (ADN) 322.50p +1.35%
FTSE 100 - Fallers
WPP (WPP) 785.50p -2.78%
Evraz (EVR) 243.90p -2.56%
ARM Holdings (ARM) 660.50p -2.22%
Amec (AMEC) 1,033.00p -1.53%
Eurasian Natural Resources Corp. (ENRC) 337.30p -1.26%
Royal Dutch Shell 'A' (RDSA) 2,095.00p -1.18%
Royal Dutch Shell 'B' (RDSB) 2,165.00p -1.12%
British American Tobacco (BATS) 3,128.00p -0.82%
Kazakhmys (KAZ) 745.00p -0.67%
BP (BP.) 432.30p -0.62%
FTSE 250 - Risers
AZ Electronic Materials SA (DI) (AZEM) 336.70p +6.55%
Debenhams (DEB) 115.40p +5.87%
Salamander Energy (SMDR) 192.90p +5.70%
Bwin.party Digital Entertainment (BPTY) 123.00p +4.59%
Anite (AIE) 140.30p +3.93%
Pace (PIC) 168.40p +3.89%
Ashtead Group (AHT) 362.00p +3.37%
Interserve (IRV) 386.00p +3.32%
UBM (UBM) 682.50p +3.17%
Halfords Group (HFD) 347.70p +2.96%
FTSE 250 - Fallers
New World Resources A Shares (NWR) 270.00p -3.78%
Euromoney Institutional Investor (ERM) 776.50p -2.02%
Daejan Holdings (DJAN) 2,864.00p -2.02%
Bumi (BUMI) 252.70p -1.90%
Rathbone Brothers (RAT) 1,298.00p -1.59%
Dechra Pharmaceuticals (DPH) 593.00p -1.58%
Lonmin (LMI) 495.90p -1.51%
Supergroup (SGP) 661.00p -1.49%
JPMorgan Indian Inv Trust (JII) 361.00p -1.45%
Petropavlovsk (POG) 419.60p -1.22%