- UK growth expected to pick-up in Q3
- German, US data also in focus
- Investors urge Osborne against RBS split
techMARK 2,638.50 -0.14%
FTSE 100 6,710.89 -0.03%
FTSE 250 15,493.44 -0.22%
Markets opened broadly flat on Friday morning as investors awaited key economic growth data from the UK and other key indicators from Germany and the US.
UK gross domestic product (GDP) is pegged to rise at an annual rate of 1.5% from 1.3% in the previous quarter, consensus estimates show. This would represent an 0.8% expansion quarter-on-quarter (q/q).
Chief Market Strategist Michael Hewson from CMC Markets UK said that Markit purchasing managers' indices (PMIs) over the past month - along with a host of independent CBI and BRC data - would suggest that third-quarter growth is likely to be "extremely positive". However, official statistics from the Office for National Statistics have tempered these hopes after contrasting figures for manufacturing and industrial production in August.
"A [quarter/quarter] figure below 0.8% is likely to see the pound get sold off on initial disappointment, and raise further questions about the divergence between independent and official data; however any response needs to be tempered by the fact that the data only accounts for about 40% of the total output and subsequent revisions could well get pushed up towards 1%," he said.
Also on today's agenda, the Ifo Institute for Economic Research will publish its business climate index, a leading gauge of economic activity in Germany. The index is anticipated to rise slightly to 108.0 in October from 107.7 last month.
In the US, durable goods orders for September will likely rise by 2% compared to August when it increased 0.1%, analysts predict, while the final October reading of the University of Michigan consumer confidence index is expected to slip to 75 from the initial estimate of 75.2.
Investors urge Osborne against RBS split
Banking stocks were mixed this morning with domestic lenders RBS, Lloyds and Barclays making gains and global banks HSBC and Standard Chartered registering losses.
RBS was making gains after leading investors urged Chancellor George Osborne not to go ahead with a 'good bank-bad bank' split of the part-nationalised lender. Meanwhile, speculation over the initial public offering of its US subsidiary Citizens Financial has also begun to ramp up.
Pharmaceuticals group Shire was building on its +9% surge on Thursday as analysts reacted to its strong third-quarter results which beat forecasts across the board. JPMorgan Cazenove and Deutsche Bank both maintained their positive ratings on the shares
and raised their target prices for the stock this morning.
Security solutions group G4S was a high riser this morning after analysts at HSBC upgraded the stock to 'neutral' and hiked their target price from 205p to 250p.
Precious metals miner Polymetal was also higher after Citigroup raised its recommendation to 'neutral'.
Closed life fund group Phoenix gained after revealing it is on track to hit the top end of its 2013 cash generation target range following a strong financial performance in recent months.
FTSE 100 - Risers
Royal Bank of Scotland Group (RBS) 365.70p +2.58%
G4S (GFS) 258.70p +2.25%
British Land Co (BLND) 635.00p +1.93%
SSE (SSE) 1,442.00p +1.41%
Hammerson (HMSO) 537.00p +1.32%
Tullow Oil (TLW) 969.50p +1.09%
Barclays (BARC) 269.20p +1.03%
Fresnillo (FRES) 1,031.00p +0.88%
Land Securities Group (LAND) 999.00p +0.86%
WPP (WPP) 1,336.00p +0.83%
FTSE 100 - Fallers
International Consolidated Airlines Group SA (CDI) (IAG) 356.00p -2.20%
Intertek Group (ITRK) 3,288.00p -1.70%
Vedanta Resources (VED) 1,070.00p -1.65%
British Sky Broadcasting Group (BSY) 936.50p -1.42%
easyJet (EZJ) 1,331.00p -1.26%
Burberry Group (BRBY) 1,535.00p -0.78%
Capita (CPI) 967.50p -0.77%
Rio Tinto (RIO) 3,210.00p -0.77%
HSBC Holdings (HSBA) 677.80p -0.65%
ARM Holdings (ARM) 954.50p -0.62%
FTSE 250 - Risers
Phoenix Group Holdings (DI) (PHNX) 799.50p +3.16%
Imagination Technologies Group (IMG) 288.40p +2.49%
Polymetal International (POLY) 617.50p +1.81%
Fisher (James) & Sons (FSJ) 1,101.00p +1.76%
esure Group (ESUR) 244.70p +1.54%
Barr (A.G.) (BAG) 531.50p +1.53%
Drax Group (DRX) 666.50p +1.52%
Caledonia Investments (CLDN) 1,935.00p +1.52%
Cranswick (CWK) 1,080.00p +1.50%
Menzies(John) (MNZS) 803.50p +1.39%
FTSE 250 - Fallers
Debenhams (DEB) 98.20p -2.77%
AZ Electronic Materials SA (DI) (AZEM) 274.70p -2.59%
Mitie Group (MTO) 309.20p -1.53%
WH Smith (SMWH) 893.50p -1.49%
Bellway (BWY) 1,512.00p -1.43%
Supergroup (SGP) 1,168.00p -1.43%
Ferrexpo (FXPO) 193.60p -1.27%
Homeserve (HSV) 235.00p -1.26%
Dixons Retail (DXNS) 47.70p -1.20%
DCC (DCC) 2,740.00p -1.19%