London midday: Stocks extend losses as St James's Place, Reckitt drop

(Sharecast News) - London stocks had extended gains by midday on Wednesday, dragged lower by St James's Place and Reckitt Benckiser after disappointing results, as investors eyed US GDP data. The FTSE 100 was down 0.7% at 7,633.17.

Market participants were looking ahead to the latest US growth figures and key inflation data, due later in the day and on Thursday, respectively.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Today, the US will reveal its latest GDP numbers. The US economy is expected to have grown 3.3% in Q4. That's lower than the 5% printed in the Q3, but it's still a very strong growth for an economy that underwent the most aggressive tightening cycle of its modern history. And if Atlanta's GDP prediction is an indication, the slowdown will slow in the first quarter of this year.

"Robust growth is good, if it's not accompanied by stronger inflation. Is it possible? Yes, it is possible, if supply grows faster than demand, but I think that's not necessarily the case for the US right now. Demand remains strong despite the latest weakness in consumer spending and durable goods orders. And core PCE - which will be released tomorrow - is expected to print the biggest jump in a year on a monthly basis. Therefore, good news (on GPD data) has the potential to be bad news for market sentiment, provided that strong growth and higher inflation would push the Federal Reserve (Fed) rate cut expectations further down the road.

"Pricing today suggests that the market expects a 75bp cut from the Fed this year - matching what the Fed members plotted on their latest dot plot in December. The probability of a June rate cut slipped just below 60% yesterday. A U-turn in inflation won't only delay the first rate cut but likely slow the pace of the future cuts as well. That's not good news for risk appetite."

In equity markets, St James's Place tanked as the wealth manager said it swung to a full-year loss as it cut its dividend and set aside £426m for potential client refunds.

Reckitt Benckiser was also under the cosh as the consumer goods giant's fourth-quarter sales missed expectations.

Housebuilder Taylor Wimpey lost ground as it said 2023 profits almost halved as higher mortgage rates hit demand, but added that current trading was showing "some encouraging signs of improvement with reduced mortgage rates positively impacting affordability".

Luxury carmaker Aston Martin edged lower as it said that annual losses more than halved last year, driven by higher prices for its high-end vehicles.

Outside the FTSE 350, Halfords tumbled as it slashed its profit guidance for this year, saying it had seen "a further material weakening" in three of its four core markets, resulting in a significant drop in like-for-like revenue growth in the retail business.

On the upside, Direct Line surged following a report it has rejected a takeover approach from Belgian insurer Ageas.

Vodafone ticked up after confirming media speculation that it plans to sell its Italian operations to Swiss telecoms group Swisscom for an enterprise value of €8bn.

Market Movers

FTSE 100 (UKX) 7,633.17 -0.65% FTSE 250 (MCX) 19,043.74 -0.63% techMARK (TASX) 4,372.69 -0.64%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 365.60p 1.95% Barclays (BARC) 169.52p 1.59% NATWEST GROUP (NWG) 237.10p 1.45% JD Sports Fashion (JD.) 116.55p 1.44% Sage Group (SGE) 1,224.50p 1.41% B&M European Value Retail S.A. (DI) (BME) 524.40p 1.39% Kingfisher (KGF) 233.70p 1.39% WPP (WPP) 719.60p 0.81% Melrose Industries (MRO) 621.80p 0.75% Admiral Group (ADM) 2,595.00p 0.70%

FTSE 100 - Fallers

St James's Place (STJ) 443.90p -28.52% Reckitt Benckiser Group (RKT) 5,178.00p -11.31% Smith & Nephew (SN.) 1,060.00p -4.85% Ocado Group (OCDO) 476.80p -3.44% Fresnillo (FRES) 454.70p -2.82% Endeavour Mining (EDV) 1,241.00p -2.82% Taylor Wimpey (TW.) 136.65p -2.77% Prudential (PRU) 785.80p -2.75% Burberry Group (BRBY) 1,278.00p -2.55% Haleon (HLN) 315.05p -2.17%

FTSE 250 - Risers

HICL Infrastructure (HICL) 126.00p 3.62% AO World (AO.) 93.80p 1.96% Currys (CURY) 67.70p 1.80% Me Group International (MEGP) 161.20p 1.51% Bank of Georgia Group (BGEO) 4,585.00p 1.44% Trustpilot Group (TRST) 193.70p 1.36% Morgan Sindall Group (MGNS) 2,330.00p 1.30% Vietnam Enterprise Investments (DI) (VEIL) 590.00p 1.20% GCP Infrastructure Investments Ltd (GCP) 72.30p 1.12% International Public Partnerships Ltd. (INPP) 127.00p 1.11%

FTSE 250 - Fallers

Watches of Switzerland Group (WOSG) 415.00p -5.03% Direct Line Insurance Group (DLG) 156.45p -4.22% Future (FUTR) 647.00p -4.01% Coats Group (COA) 66.70p -3.75% Close Brothers Group (CBG) 345.40p -3.41% PureTech Health (PRTC) 204.50p -2.85% UK Commercial Property Reit Limited (UKCM) 62.60p -2.80% Quilter (QLT) 94.55p -2.78% Jupiter Fund Management (JUP) 83.05p -2.64% Drax Group (DRX) 408.60p -2.58%