London midday: Stocks stay up as EY Item Club lifts growth forecasts

(Sharecast News) - London stocks were still a little firmer by midday on Monday, having taken their opening cue from solid gains on Wall Street at the end of last week, with an upbeat report from EY Item Club helping to underpin the mood. The FTSE 100 was up 0.2% at 7,473.67.

Russ Mould, investment director at AJ Bell, said: "A strong session last Friday for Wall Street saw the S&P 500 hit a new record high and that positivity extended to Europe at the start of the new trading week."

On home shores, EY Item Club said that a quicker-than-expected drop in inflation was expected to support UK growth in 2024 and beyond, as it upgraded its economic projections for the next two years.

According to the EY ITem Club's new Winter Forecast, the UK's "prolonged period of economic stagnation" should begin to ease this year as slowing inflation, interest rate cuts and tax reductions give the economy momentum in 2024 and 2025.

The economic forecasting group is now predicting 0.9% and 1.8% GDP growth in 2024 and 2025, up from October's estimates of 0.7% and 1.7%, respectively.

Meanwhile, inflation - which averaged 7.3% in 2023 - is now expected to average 2.4% in 2024, lower than the 2.9% predicted in the Autumn Forecast, "suggesting a more positive outlook for real household incomes", EY Item Club said. Inflation is expected to reach the Bank of England's 2% target by May.

Martin Beck, EY Item Club's chief economic advisor, said: "Although it remains possible that the UK may have slipped into a technical recession in Q4 2023, the mood music around the economy is justifiably improving."

In equity markets, Ladbrokes owner Entain and 888 Holdings both gained after La Francaise des Jeux made a €2.45bn offer for Swedish online gaming firm Kindred.

Bodycote rallied as the thermal processing specialist said it would start a $60m share buyback programme after spending less than planned on acquisitions.

Caterer Compass Group nudged lower after agreeing to buy rival CH&CO in a £475m deal.

Endeavour Mining fell after saying it achieved production guidance in 2023 but that costs were higher than expected.

In broker note action, Segro was boosted by an upgrade to 'buy' from 'neutral' at Citi, while Sage was knocked lower by a downgrade to 'underweight' from 'equalweight' at Barclays.

Market Movers

FTSE 100 (UKX) 7,473.67 0.16% FTSE 250 (MCX) 19,018.20 0.78% techMARK (TASX) 4,337.01 0.19%

FTSE 100 - Risers

Entain (ENT) 943.00p 2.86% Persimmon (PSN) 1,474.00p 2.50% Barclays (BARC) 144.54p 2.48% Melrose Industries (MRO) 590.80p 2.32% Pershing Square Holdings Ltd NPV (PSH) 3,696.00p 2.10% Rightmove (RMV) 539.80p 2.08% NATWEST GROUP (NWG) 212.20p 2.02% Auto Trader Group (AUTO) 726.80p 1.96% Barratt Developments (BDEV) 534.20p 1.95% Lloyds Banking Group (LLOY) 43.48p 1.91%

FTSE 100 - Fallers

Endeavour Mining (EDV) 1,358.00p -1.81% Rio Tinto (RIO) 5,289.00p -1.67% Glencore (GLEN) 406.10p -1.50% SSE (SSE) 1,733.00p -1.37% GSK (GSK) 1,545.40p -1.16% Reckitt Benckiser Group (RKT) 5,524.00p -1.00% Smurfit Kappa Group (CDI) (SKG) 2,898.00p -0.75% Mondi (MNDI) 1,401.50p -0.71% Haleon (HLN) 326.25p -0.68% Sage Group (SGE) 1,146.00p -0.52%

FTSE 250 - Risers

Bodycote (BOY) 623.00p 4.53% Babcock International Group (BAB) 446.20p 3.77% OSB Group (OSB) 418.60p 3.67% Trustpilot Group (TRST) 170.00p 3.47% International Distributions Services (IDS) 254.40p 3.46% Wood Group (John) (WG.) 174.00p 3.20% Mobico Group (MCG) 86.00p 3.06% Just Group (JUST) 87.50p 2.82% Ferrexpo (FXPO) 82.95p 2.72% Vistry Group (VTY) 933.50p 2.47%

FTSE 250 - Fallers

Fidelity China Special Situations (FCSS) 186.00p -2.41% RHI Magnesita N.V. (DI) (RHIM) 3,290.00p -1.97% Scottish American Inv Company (SAIN) 501.00p -1.96% Sequoia Economic Infrastructure Income Fund Limited (SEQI) 82.70p -1.55% Abrdn (ABDN) 175.80p -1.54% Johnson Matthey (JMAT) 1,564.50p -0.82% Worldwide Healthcare Trust (WWH) 310.50p -0.80% International Public Partnerships Ltd. (INPP) 127.40p -0.78% Templeton Emerging Markets Inv Trust (TEM) 142.60p -0.70% Harbour Energy (HBR) 285.40p -0.70%