London open: Stocks edge up as investors mull GDP data; Spirent surges

(Sharecast News) - London stocks edged up in early trade on Thursday, as investors digested data confirming the UK fell into recession in the second half of last year. At 0820 GMT, the FTSE 100 was up 0.3% at 7,953.44, with trade expected to be quiet as we head towards the long Easter break.

Final figures released earlier by the Office for National Statistics showed that GDP contracted by 0.3% in the last three months of the year, unrevised from an earlier estimate. This followed a 0.1% contraction in the period from July to September.

Chancellor Jeremy Hunt said in response to the data: "Last year was tough as interest rates had to rise to bring down inflation, but we can see our plan is working.

"Inflation has fallen decisively from over 11% to 3.4%, the economy grew in January and real wages have increased for eight months in a row.

"Our cuts to National Insurance will boost growth by rewarding work and putting over £900 a year back into the average earner's pocket."

Ashley Webb, UK economist at Capital Economics, said: "Overall, today's data release does not change much. The UK's mild technical recession at the end of last year was as mild as previously thought and the economic recovery is probably already underway.

"And our forecast for inflation to fall further than the consensus and for interest rates to be cut faster and further than current market pricing suggests the economic recovery in 2024 and 2025 will be stronger than most expect."

Looking ahead, Richard Hunter, head of markets at Interactive Investor, said that even though markets will be closed on Friday, the US inflation report will be the subject of close scrutiny.

"The performance of markets over a successful opening quarter to the year has shown that investors are increasingly accepting that three rate cuts are the most likely outcome, rather than the several which had previously been pencilled in," he said.

"Some of this changing sentiment has come from the realisation that the general strength of the economy has reduced pressure on the Federal Reserve to ease monetary policy and indeed moving too soon to cut rates could do more harm than good in the longer term if they are not currently necessary."

In equity markets, Spirent Communications surged after Keysight Technologies reached a deal to buy the company for £1.16bn, outbidding US peer Viavi Solutions, which had already agreed to buy the telecoms group earlier this month.

Spirent said it is now recommending a 201.5p-per-share offer from Keysight, which represents a 26.5p or 15% premium to Viavi's offer.

JD Sports Fashion also racked up strong gains after saying it expects full-year profits to be within guidance of £915m to £935m. It said the current year would be "challenging" due to less product innovation and more discounting, but expects sales to pick up on the back of the Paris Olympics and European football finals in the summer.

Electrical retailer AO World rallied as it said FY24 adjusted pre-tax profit was set to be "at least" at the top end of the previously guided range of £28m to £33m as the core business continued to trade positively in the fourth quarter.

On the downside, M&G, Prudential, Smith & Nephew, Taylor Wimpey, Moneysupermarket.com, Primary Health Properties, Travis Perkins, Ithaca Energy and Hargreaves Lansdown were all weaker as they traded without entitlement to the dividend.

Market Movers

FTSE 100 (UKX) 7,953.44 0.27% FTSE 250 (MCX) 19,824.33 0.07% techMARK (TASX) 4,499.79 -0.01%

FTSE 100 - Risers

Airtel Africa (AAF) 107.50p 2.58% Fresnillo (FRES) 468.10p 2.43% easyJet (EZJ) 568.40p 1.94% Anglo American (AAL) 1,951.20p 1.48% Glencore (GLEN) 434.70p 1.39% Antofagasta (ANTO) 2,011.00p 1.31% Barclays (BARC) 183.86p 1.29% Hikma Pharmaceuticals (HIK) 1,902.50p 1.17% Lloyds Banking Group (LLOY) 52.24p 1.10% NATWEST GROUP (NWG) 265.40p 0.99%

FTSE 100 - Fallers

M&G (MNG) 223.40p -4.86% Smith & Nephew (SN.) 1,010.50p -3.16% Taylor Wimpey (TW.) 137.05p -2.28% Diploma (DPLM) 3,694.00p -1.49% Rolls-Royce Holdings (RR.) 416.10p -1.40% CRH (CDI) (CRH) 6,774.00p -1.14% Spirax-Sarco Engineering (SPX) 10,020.00p -0.79% Smurfit Kappa Group (CDI) (SKG) 3,602.00p -0.72% Aviva (AV.) 492.80p -0.69% Legal & General Group (LGEN) 253.80p -0.67%

FTSE 250 - Risers

AO World (AO.) 97.00p 7.96% Pennon Group (PNN) 670.50p 2.21% TUI AG Reg Shs (DI) (TUI) 660.50p 2.17% Fidelity China Special Situations (FCSS) 202.00p 2.02% British Land Company (BLND) 400.00p 1.73% Quilter (QLT) 106.20p 1.53% Safestore Holdings (SAFE) 760.00p 1.47% Dunelm Group (DNLM) 1,123.00p 1.26% Watches of Switzerland Group (WOSG) 358.80p 1.18% Merchants Trust (MRCH) 535.00p 1.13%

FTSE 250 - Fallers

Ithaca Energy (ITH) 139.30p -4.33% Lancashire Holdings Limited (LRE) 609.00p -2.40% Balfour Beatty (BBY) 375.20p -2.29% SThree (STEM) 419.00p -2.22% Discoverie Group (DSCV) 722.00p -2.17% TR Property Inv Trust (TRY) 318.50p -2.15% Hipgnosis Songs Fund Limited NPV (SONG) 62.60p -1.73% Plus500 Ltd (DI) (PLUS) 1,781.00p -1.55% Bridgepoint Group (Reg S) (BPT) 256.20p -1.54% Coats Group (COA) 80.60p -1.47%