London open: Stocks tick higher as investors mull GDP data

(Sharecast News) - London stocks edged higher in early trade on Friday as investors mulled the latest UK GDP data. At 0825 BST, the FTSE 100 was up 0.3% at 7,487.20.

Figures released earlier by the Office for National Statistics showed the economy contracted in the second quarter.

GDP fell 0.1% following 0.8% growth in the previous quarter. Analysts had been expecting a 0.2% contraction.

There was a 0.4% decline in services output, with the largest negative contribution from human health and social work activities.

ONS director of economic statistics Darren Morgan said: "Health was the biggest reason the economy contracted as both the test and trace and vaccine programmes were wound down, while many retailers also had a tough quarter.

"These were partially offset by growth in hotels, bars, hairdressers and outdoor events across the quarter, partly as a result of people celebrating the Platinum Jubilee."

Monthly estimates from the ONS showed that GDP fell by 0.6% in June following a downwardly-revised 0.4% increase in May and versus consensus expectations for a 1.2% contraction.

Last week, the Bank of England warned the UK would enter a recession at the end of this year, as it hiked interest rates by the most in 27 years.

Ruth Gregory, senior UK economist at Capital Economics, said: "Overall, the figures suggest that the risks to our below-consensus forecast of a 0.2% q/q fall in Q3 and a 0.4% q/q drop in Q4 are now on the upside. But the sheer size of the squeeze on real incomes suggests to us that a recession is still on the cards in late 2022 and early 2023."

In equity markets, bookmaker Flutter surged to the top of the FTSE 100 as it said US revenues were set to be ahead of expectations and that interim pre-tax losses had widened in the first half.

GlaxoSmithKline gained after saying it would that it would "vigorously defend" all claims related to its now-discontinued heartburn drug Zantac. It also said that both the US FDA and the European Medicines Agency have concluded there is no evidence of a causal association between ranitidine therapy (marketed as Zantac) and the development of cancer.

Shares in the pharmaceuticals giant had tumbled on Thursday amid worries about upcoming litigation.

Meanwhile, Haleon ticked higher - also after heavy losses a day earlier - as it said that it was not a party to any of the claims related to Zantac.

B&Q owner Kingfisher and homeware retailer Dunelm were both under the cosh after rating downgrades at UBS.

Defence technology firm Qinetiq was also down after an undisclosed institutional shareholder sold around £90m worth of its shares in a placing. According to terms seen by Bloomberg, the shares have been sold at 352p each, which is a discount of around 5.9% to the closing share price on Thursday.

Market Movers

FTSE 100 (UKX) 7,487.20 0.29% FTSE 250 (MCX) 20,236.12 -0.05% techMARK (TASX) 4,340.93 0.41%

FTSE 100 - Risers

Flutter Entertainment (CDI) (FLTR) 9,950.00p 6.05% GSK (GSK) 1,460.00p 4.29% Centrica (CNA) 79.30p 1.98% Aviva (AV.) 467.80p 0.97% M&G (MNG) 224.10p 0.86% Entain (ENT) 1,369.00p 0.85% Rio Tinto (RIO) 4,853.00p 0.77% Unite Group (UTG) 1,165.00p 0.69% AstraZeneca (AZN) 10,572.00p 0.63% CRH (CDI) (CRH) 3,227.00p 0.62%

FTSE 100 - Fallers

Kingfisher (KGF) 246.40p -3.67% Scottish Mortgage Inv Trust (SMT) 905.40p -2.29% Rightmove (RMV) 647.80p -1.37% Halma (HLMA) 2,269.00p -1.18% Auto Trader Group (AUTO) 657.00p -1.11% JD Sports Fashion (JD.) 130.10p -1.10% Rentokil Initial (RTO) 531.00p -1.04% Aveva Group (AVV) 2,427.00p -1.02% Ocado Group (OCDO) 923.20p -0.99% Experian (EXPN) 2,898.00p -0.86%

FTSE 250 - Risers

Drax Group (DRX) 725.50p 3.50% TBC Bank Group (TBCG) 1,600.00p 3.49% Playtech (PTEC) 480.60p 2.34% Hochschild Mining (HOC) 85.00p 1.80% Aston Martin Lagonda Global Holdings (AML) 550.00p 1.74% Hiscox Limited (DI) (HSX) 923.00p 1.50% Beazley (BEZ) 593.00p 1.45% Morgan Sindall Group (MGNS) 1,880.00p 1.40% Ruffer Investment Company Ltd Red PTG Pref Shares (RICA) 306.00p 1.32% Network International Holdings (NETW) 235.60p 1.29%

FTSE 250 - Fallers

Oxford Instruments (OXIG) 2,105.00p -3.22% QinetiQ Group (QQ.) 362.60p -3.05% Dunelm Group (DNLM) 818.00p -2.73% Countryside Partnerships (CSP) 282.40p -2.42% Britvic (BVIC) 835.00p -2.28% Victrex plc (VCT) 1,847.00p -1.81% Crest Nicholson Holdings (CRST) 273.00p -1.73% Bytes Technology Group (BYIT) 441.00p -1.52% ASOS (ASC) 992.00p -1.49% Hays (HAS) 122.50p -1.37%