London midday: FTSE maintains gains after GDP data, ahead of US inflation

(Sharecast News) - London stocks were still in the black by midday on Friday as investors mulled better-than-expected UK GDP data and looked ahead to a key US inflation reading. The FTSE 100 was up 0.5% at 8,222.14.

Figures released earlier by the Office for National Statistics showed gross domestic product grew by 0.7% in the first three months of the year, up from an initial estimate of 0.6% growth. This follows 0.1% and 0.3% contractions in the third and fourth quarters of last year, respectively.

The figures showed that the services sector expanded by 0.8%, up from an initial estimate of 0.7% growth. Meanwhile, production was up 0.6% in the first quarter, down from 0.8% initially estimated.

The construction sector contracted 0.6%.

Paul Dales, chief UK economist at Capital Economics, said the upward revision to Q1 GDP "suggests whoever is Prime Minister this time next week may benefit from the economic recovery being a bit stronger than our already above-consensus forecast".

Looking ahead to the rest of the day, investors were eyeing US personal consumption expenditure for May at 1330 BST.

Russ Mould, investment director at AJ Bell, said: "US inflation numbers dominate the agenda, with the market expecting core prices to have fallen to 0.1% month-on-month in May versus 0.2% in April. The annual change is expected to fall to 2.6% in May versus 2.8% in April.

"US core PCE price index is the Federal Reserve's preferred gauge to measure inflation and this new round of data will play a crucial role in the central bank's decision-making as it looks at when to ease monetary policy.

"The market is likely to react positively if inflation comes in as expected as it would boost confidence that we're only a stone's throw away from the Fed cutting rates."

In equity markets, Tyman gained after Quanex Building Products announced an increased and final recommended cash and share offer the company. The revised proposal includes a special interim dividend of 15p per share in addition to the previous consideration of 240p and 0.05715 of a new Quanex share per Tyman share.

Moonpig sparked after the online greeting card retailer posted a jump in annual sales and profits.

JD Sports tumbled after Nike plunged on Thursday as it cut its full-year guidance and said sales were set to fall 10% during the current quarter. It pointed to soft sales in China and "uneven" consumer trends.

Auction Technology was under the cosh after private equity firm TA Associates offloaded a 5% shareholding in the marketplace tech firm through a share placing with institutional investors.

Outside the FTSE 350, Keywords Studios rallied after saying it had received a sweetened £1.96bn takeover proposal from private equity firm EQT Group that it would be minded to recommend if a firm offer was made.

Market Movers

FTSE 100 (UKX) 8,222.14 0.52% FTSE 250 (MCX) 20,377.02 0.22% techMARK (TASX) 4,730.00 0.19%

FTSE 100 - Risers

3i Group (III) 3,114.00p 3.83% Intertek Group (ITRK) 4,858.00p 2.32% Beazley (BEZ) 711.00p 1.64% Legal & General Group (LGEN) 229.90p 1.59% Rolls-Royce Holdings (RR.) 461.90p 1.58% CRH (CDI) (CRH) 5,906.00p 1.48% easyJet (EZJ) 459.30p 1.41% Intermediate Capital Group (ICG) 2,232.00p 1.36% Phoenix Group Holdings (PHNX) 527.00p 1.35% International Consolidated Airlines Group SA (CDI) (IAG) 163.05p 1.34%

FTSE 100 - Fallers

JD Sports Fashion (JD.) 121.30p -4.00% Smith (DS) (SMDS) 418.60p -1.78% Bunzl (BNZL) 3,034.00p -1.17% WPP (WPP) 732.80p -1.11% Compass Group (CPG) 2,187.00p -0.64% Reckitt Benckiser Group (RKT) 4,326.00p -0.60% Smiths Group (SMIN) 1,715.00p -0.58% Lloyds Banking Group (LLOY) 55.78p -0.53% Rentokil Initial (RTO) 464.10p -0.51% Experian (EXPN) 3,682.00p -0.38%

FTSE 250 - Risers

Moonpig Group (MOON) 192.60p 5.25% Aston Martin Lagonda Global Holdings (AML) 146.10p 2.89% Tyman (TYMN) 360.00p 2.71% Investec (INVP) 578.50p 2.39% Ascential (ASCL) 345.00p 2.37% Carnival (CCL) 1,352.00p 2.04% Hiscox Limited (DI) (HSX) 1,163.00p 2.02% Lancashire Holdings Limited (LRE) 608.00p 2.01% Wizz Air Holdings (WIZZ) 2,238.00p 2.01% Bridgepoint Group (Reg S) (BPT) 221.60p 1.93%

FTSE 250 - Fallers

Auction Technology Group (ATG) 517.00p -7.01% Safestore Holdings (SAFE) 761.00p -2.69% Barr (A.G.) (BAG) 614.00p -2.07% Future (FUTR) 1,087.00p -1.81% Indivior (INDV) 1,260.00p -1.33% Clarkson (CKN) 4,190.00p -1.30% Coats Group (COA) 80.10p -1.11% Mitie Group (MTO) 117.20p -1.01% Oxford Instruments (OXIG) 2,485.00p -1.00% Tate & Lyle (TATE) 606.00p -0.98%