London open: FTSE gains as investors mull GDP data

(Sharecast News) - London stocks rose in early trade on Thursday, taking their cue from gains in the US and Asia, as investors mulled news that the UK fell into recession at the end of 2023. At 0830 GMT, the was up 0.6% at 7,610.79.

Provisional figures released earlier by the Office for National Statistics showed the UK fell into recession at the end of last year, after a bigger-than-expected contraction in GDP in the fourth quarter.

GDP contracted by 0.3% in the three months, following a 0.1% decline in the third. A recession is defined as two consecutive quarters of negative growth.

Analysts had been expecting another quarter of no growth, although most had been looking for a smaller contraction, of 0.1%.

Over the entirety of 2023, however, the ONS said GDP edged up by 0.1% year-on-year.

During the fourth quarter, there were falls in all three main sectors. Construction output slid 1.3%, production by 1% and services by 0.2%.

On a monthly basis, GDP fell by 0.1% in December, compared to growth of 0.2% in November - revised down from an 0.3% improvement - and a 0.5% fall in October, which was revised down from a 0.3% fall.

Richard Hunter, head of markets at Interactive Investor, said the market impact of the GDP print was "limited not only due to the better-than-expected inflation number yesterday, but also because some of the UK market's recent lethargy has been based on anaemic or negative growth over recent months".

"In addition, the economy is estimated to have grown by 0.1% for the year as a whole. The indicator is also akin to driving in the rear-view mirror and as such does not indicate the current state of play. The GDP print for January is not due for release until March and the Bank of England has indicated that it expects the economy to pick up this year. In the meantime, the news also raises the possibility of interest rate cuts to bolster a struggling economy, although inflation including the impact of currently strong pay rises are complicating the central bank's decision on timing, with no easing expected until June at the earliest."

In equity markets, British Gas owner Centrica was the standout gainer on the FTSE 100 even as it posted a fall in annual profits on the back of "sharply lower" commodity prices.

Adjusted operating profit for the year to December 2023 came in at £2.72bn from £3.3bn. The full-year dividend was up 33% to 4p a share.

Business information and analytics firm Relx advanced as it hiked its dividend after a robust full-year performance.

On the downside, BP, Imperial Brands and Shell all lost ground as they traded without entitlement to the dividend.

Animal genetics firm Genus tumbled as it warned that full-year profits would be below expectations.

Close Brothers was also sharply lower after saying it was suspending its dividend this year and that future payouts were under review as it awaits the Financial Conduct Authority's review of motor finance.

Market Movers

FTSE 100 (UKX) 7,610.79 0.56% FTSE 250 (MCX) 19,074.87 0.37% techMARK (TASX) 4,380.56 -0.01%

FTSE 100 - Risers

Centrica (CNA) 141.40p 5.21% Rolls-Royce Holdings (RR.) 320.60p 2.69% Intermediate Capital Group (ICP) 1,821.50p 2.56% Rentokil Initial (RTO) 417.90p 2.55% Coca-Cola HBC AG (CDI) (CCH) 2,436.00p 2.27% Diageo (DGE) 2,932.00p 2.21% Relx plc (REL) 3,406.00p 2.10% Pearson (PSON) 964.20p 1.92% JD Sports Fashion (JD.) 110.25p 1.85% B&M European Value Retail S.A. (DI) (BME) 511.20p 1.83%

FTSE 100 - Fallers

Imperial Brands (IMB) 1,827.00p -3.44% BP (BP.) 470.05p -1.35% Shell (SHEL) 2,473.00p -0.98% Smith (DS) (SMDS) 317.40p -0.53% Airtel Africa (AAF) 100.70p 0.00% GSK (GSK) 1,668.20p 0.01% Glencore (GLEN) 391.50p 0.01% Unilever (ULVR) 3,990.00p 0.10% Vodafone Group (VOD) 65.45p 0.12% Rio Tinto (RIO) 5,316.00p 0.13%

FTSE 250 - Risers

Keller Group (KLR) 875.00p 4.17% Spirent Communications (SPT) 118.30p 3.95% Dr. Martens (DOCS) 92.45p 2.84% Redde Northgate (REDD) 348.50p 2.80% Wizz Air Holdings (WIZZ) 2,125.00p 2.76% PZ Cussons (PZC) 102.40p 2.40% Mobico Group (MCG) 82.50p 2.36% PureTech Health (PRTC) 185.00p 2.21% Oxford Instruments (OXIG) 2,150.00p 1.90% Currys (CURY) 47.08p 1.82%

FTSE 250 - Fallers

Genus (GNS) 1,750.00p -17.61% Close Brothers Group (CBG) 334.00p -16.08% Empiric Student Property (ESP) 87.30p -3.00% AO World (AO.) 85.05p -2.47% Tullow Oil (TLW) 29.90p -1.77% Greencoat UK Wind (UKW) 129.10p -1.53% Savills (SVS) 935.50p -1.42% UK Commercial Property Reit Limited (UKCM) 64.30p -1.38% Trustpilot Group (TRST) 191.10p -0.78% FirstGroup (FGP) 156.20p -0.64%