(Alliance News) - Stocks in London were called marginally higher on Friday, after a surprise upward revision to UK economic growth figures lifted investor sentiment.
The FTSE 100 had been called down 0.1% prior to GDP figures, but stock market futures now indicate a positive open.
The UK economy is now estimated to have grown 0.2% in the second quarter from the first, according to the Office for National Statistics. This compares with a previous estimate that had indicated a 0.1% contraction.
Consensus, according to FXStreet, had not been expecting any revision to the figures.
This follows 0.8% growth in the first quarter from the final quarter of 2021.
On an annual basis, gross domestic product grew by 4.4% in the second quarter. This compares with a previous estimate of just 2.9%.
It is still a sharp slowdown from the 8.7% annual growth seen in the first quarter, however.
The second quarter GDP growth defies the Bank of England's prediction of a recession as early as the third quarter. The BoE last week said the UK economy will shrink 0.1% in the third quarter. Had it also declined in the second, it would have met a basic definition of a recession - being two successive quarters of economic decline.
In corporate news, Barclays had its knuckles rapped by a US regulator, agreeing a USD200 million penalty for the overselling of financial instruments. JD Sports Fashion partnered with fellow sportswear apparel maker Nike.
Here is what you need to know ahead of the London market open:
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MARKETS
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FTSE 100: called marginally higher at 6,882.29
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Hang Seng: up 0.1% at 17,190.17
Nikkei 225: closed down 1.8% at 25,937.21
S&P/ASX 200: closed down 1.2% at 6,474.20
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DJIA: closed down 458.13 points, or 1.5%, at 29,225.61
S&P 500: closed down 78.57 points, or 2.1%, at 3,640.47
Nasdaq Composite: closed down 314.13 points, or 2.8%, at 10,737.51
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EUR: down at USD0.9767 (USD0.9781)
GBP: up at USD1.1116 (USD1.1033)
USD: down at JPY144.46 (JPY144.48)
Gold: up at USD1,665.91 per ounce (USD1,658.20)
Oil (Brent): down at USD88.58 a barrel (USD88.71)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
1100 CEST EU unemployment
1100 CEST EU flash CPI
0700 CEST Germany retail sales
0955 CEST Germany unemployment
0830 EDT US core personal consumption expenditures
1000 EDT US University of Michigan consumer sentiment index
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UK Prime Minister Liz Truss and Chancellor Kwasi Kwarteng will meet with head of the Office of Budget Responsibility on Friday, in the latest effort by the pair to reassure markets and voters that the economic turmoil of recent days is under control. Treasury and Downing Street sources hit back at suggestions it was an emergency meeting, but it comes after days of chaos in the financial markets and fears of rocketing mortgage bills sparked by the Chancellor's mini-budget last week. The pair will meet with Richard Hughes, the head of the independent spending watchdog pushed to the fore amid the political and economic fallout from Friday's mini-budget.
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UK house price growth slowed in September, according to figures from Nationwide. UK house prices rose 9.5% on an annual basis in September, easing from a 10% surge in August. On a monthly basis, prices were unchanged in September. They had risen 0.7% in August from July. "There have been further signs of a slowdown in the market over the past month, with the number of mortgages approved for house purchase remaining below pre-pandemic levels and surveyors reporting a decline in new buyer enquiries. Nevertheless, the slowdown to date has been modest and, combined with a shortage of stock on the market, this has meant that price growth has remained firm," Nationwide analyst Robert Gardner commented.
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The number of adverts for job vacancies has fallen amid concern among employers about the economy, according to a new report. The Recruitment & Employment Confederation said 143,000 new job adverts were posted last week, the lowest figure of the year and 8% down on a month earlier. The figure took the total to 1.45 million adverts. There were notable increases in postings for teachers, school secretaries and school crossing patrol staff, the REC said. The biggest weekly decline was for driving instructors, ship and hovercraft officers and floorers and wall tilers, according to the report. REC Chief Executive Neil Carberry said: "Weekly jobs postings have returned to levels last seen in April this year.
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BROKER RATING CHANGES
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Berenberg starts Auction Technology Group with 'buy' - price target 900 pence
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Berenberg raises AB Dynamics to 'buy' (hold) - price target 1,530 (1,850) pence
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COMPANIES - FTSE 100
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Barclays will pay a total of USD361 million to settle matters related to an overselling of financial instruments, a US watchdog. The Securities & Exchange Commission said Barclays has agreed to pay a USD200 million civil penalty, as well as prejudgement interest of more than USD161 million. The second sum was deemed as satisfied by an offer of rescission made by Barclays to investors involved. Barclays in March admitted it sold more products to investors than it was allowed to. The London-based bank explained that securities offered and sold under its US shelf registration statement for an approximate one-year period had exceeded a registered amount. This, the bank explained at the time, gave the purchasers of the affected securities a right of rescission. The SEC said the bank had offered and sold some USD17.7 billion of securities in "unregistered transactions".
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JD Sports Fashion announced it has been chosen as the first European retail partner for Nike's Connected Partnership - a new loyalty programme. "JD's customers, starting in the UK, [will have] unprecedented access to select Nike member-only footwear and apparel when they opt to link their JD and Nike Membership accounts through the JD mobile app," it explains.
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COMPANIES - FTSE 250
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Water utility Pennon said it traded in line with expectations in the first half ended September 30, despite tough macro-economic conditions. It hailed its progress in achieving on outcome delivery incentives. "South West Water delivered the second highest ODI performance in the sector for 2021/22, and as a group we are on track for a net positive ODI outcome in 2022/23," Pennon added. The company said 95% of its energy usage for financial 2023 is hedged, though it expects total power costs to now be around GBP50 million higher year-on-year. In addition, it said it is allocating GBP160 million for investment in renewable energy generation.
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Aston Martin Lagonda Global sealed GBP654m capital raise, to help the firm "both meaningfully deleverage its balance sheet, and to strengthen and accelerate its long-term growth".
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OTHER COMPANIES
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Cineworld reported a narrowed interim loss. In the first half of 2022, pretax loss narrowed to USD364.9 million from USD576.4 million a year before. Revenue jumped to USD1.52 billion from USD292.8 million. Admissions in the first quarter were below expectations, the picture house chain owner said. It expects the next quarter to be strong, "supported by the scheduled release of Black Adam, Black Panther: Wakanda Forever, Avatar: The Way of Water and other blockbuster films".
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Restore said it has signed its largest contract to date. The document management and IT recycling business has been picked to manage the BBC's archive of entertainment related assets. The deal has an expected value of GBP22 million over 10 years, Restore said.
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By Elizabeth Winter; elizabethwinter@alliancenews.com
Copyright 2022 Alliance News Limited. All Rights Reserved.
Barclays (BARC)
JD Sports (JD.)
Aston Martin Lagonda (AML)
Pennon (PNN)
Restore (RST)
Auction Technology Group (ATG)
AB Dynamics (ABDP)
