London midday: Stocks touch lower amid earnings avalanche, ahead of US data

(Sharecast News) - London stocks were a smidgen lower by midday on Thursday amid a deluge of corporate earnings, as worries about the banking sector continued to play on investors' minds and ahead of key US GDP and jobs data. The FTSE 100 was down 0.1% at 7,848.66.

Neil Wilson, chief market analyst at Markets.com, said: "US GDP data later in the session will be the one to watch - expected to show annualised growth of 2% in Q1, slowing from 2.6% in the fourth quarter.

"US weekly jobless claims data also important - last week showed continuing unemployment claims rose 61k to 1.865m, their highest level since November 2021 - pointing to rate hikes taking effect."

The GDP data and jobless claims figures are due at 1330 BST.

In equity markets, Barclays was the top performer on the FTSE 100 after saying it was on track to meet full-year guidance, as it posted a 16% jump in pre-tax profits driven by growth across all its businesses. The bank said group income rose 11% to £7.2bn, with pre-tax profit coming in at £2.6bn, generating a group return on tangible equity of 15% and earnings per share of 11.3p.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: "Barclays has posted a very solid first quarter, comfortably beating market consensus on profit amidst a turbulent tie for the broader banking sector.

"It's still early doors for the major UK banks reporting cycle, but signs look promising that issues over the pond aren't leaking into the wider ecosystem. Credit card defaults in the UK remain below pre-pandemic levels, highlighting the UK consumers' resilience despite mounting costs.

"There are some signs of strain in the US, where credit card balances are building. That benefits Barclays, especially in a higher rate environment, but the flip side is higher default rates. It's nothing to get too worried about for now, credit impairments were comfortably within target range, but worth keeping an eye on."

RS Group rallied after announcing the acquisition of Distrelec, a distributor of industrial and maintenance, repair and operations products for €365m (£323m).

Consumer goods giant Unilever gained as it said that underlying sales growth in the first quarter accelerated to 10.5%, versus analysts' expectations of 7.5%.

Lancashire Holdings was also higher after a well-received Q1 update.

On the downside, Legal & General, Rightmove, Relx and Derwent London all lost ground as they traded without entitlement to the dividend.

St James's Place, Schroders, WPP, Weir and Capricorn Energy all fell after updates, while Sainsbury's nudged lower as it lifted guidance for the current fiscal year after posting a fall in 2022/23 profits.