London midday: Stocks pare losses as housebuilders rally

(Sharecast News) - London stocks had pared earlier losses by midday on Wednesday, helped along by a strong showing in the housebuilding sector, as investors digested the latest UK GDP reading.
The FTSE 100 was down just 0.1% at 7,121.05, while sterling was up 0.3% against the dollar at 1.3629.

Figures released earlier by the Office for National Statistics showed the economy grew a touch less than expected in August despite the easing of Covid measures.

The economy grew 0.4% in August following a 0.1% contraction in July. This was a little weaker than consensus expectations for a 0.5% increase and leaves GDP 0.8% below its pre-pandemic level in February 2020.

July's contraction was revised down from a previous estimate of 0.1% growth.

The service sector grew by 0.3% in August, while manufacturing was 0.5% higher. Production output rose 0.8%, thanks mainly to the reopening of oil rigs, while construction output shrank 0.2%.

Darren Morgan, director of economic statistics at the ONS, said: "The economy picked up in August as bars, restaurants and festivals benefited from the first full month without Covid-19 restrictions in England.

"This was offset by falls in health activity with fewer people visiting GPs and less testing and tracing.

"However, later and slightly weaker data from a number of industries now mean we estimate the economy fell a little overall in July."

Paul Dales, chief UK economist at Capital Economics, said: "The improvement in August probably had a lot to do with the fading of the restraint from July's 'pingdemic', which at one point meant more than 1m people were self-isolating."

Later in the day, investors will turn their attention to US inflation data and the latest minutes from the Federal Open Market Committee.

In equity markets, miners were the worst performers, with Rio, BHP and Anglo American all on the back foot.

IG market analyst Joshua Mahony said iron ore dependent miners such as the three names above "remain at risk of a volatile time as traders seek to ascertain exactly how much these Chinese energy curbs will dampen industrial production".

Centrica was weaker after the British Gas owner said it was postponing its capital markets day due to an unprecedented crisis in the energy sector.

BT was knocked lower by a downgrade to 'reduce' at HSBC, while RHI Magnesita was hit by a downgrade to 'sector perform' at RBC Capital Markets.

Informa slumped after a downgrade to 'sell' from 'neutral' at UBS, which pointed to material short-term earnings downgrades. UBS said the recovery in travel was likely to be slower than the market expects.

Just Eat Takeaway fell even as it reported a 25% jump in third-quarter orders and reiterated its full-year guidance.

On the upside, house builder Barratt was the standout performer on the FTSE 100 after it said strong demand for its homes had continued into the current fiscal year despite a reduction in government incentives, adding it was on track to deliver full-year medium targets. Peers Taylor Wimpey, Persimmon and Berkeley also pushed higher.

Man Group surged to the top of the FTSE 250 after it posted a rise in third-quarter assets under management, driven by "strong" net inflows.

Britvic was boosted by an upgrade to 'buy' at HSBC, which pointed to a better outlook.

Market Movers

FTSE 100 (UKX) 7,121.05 -0.13%
FTSE 250 (MCX) 22,676.96 0.93%
techMARK (TASX) 4,554.30 0.35%

FTSE 100 - Risers

Barratt Developments (BDEV) 679.20p 5.83%
Taylor Wimpey (TW.) 155.80p 4.28%
Johnson Matthey (JMAT) 2,720.00p 4.17%
Persimmon (PSN) 2,669.00p 4.05%
Croda International (CRDA) 8,716.00p 3.47%
Ashtead Group (AHT) 5,696.00p 2.63%
Next (NXT) 7,710.00p 2.55%
Bunzl (BNZL) 2,504.00p 2.50%
Berkeley Group Holdings (The) (BKG) 4,310.00p 2.47%
Associated British Foods (ABF) 1,814.00p 2.46%

FTSE 100 - Fallers

Informa (INF) 555.00p -3.14%
Rio Tinto (RIO) 4,879.50p -2.51%
BP (BP.) 351.35p -1.91%
BHP Group (BHP) 1,913.60p -1.87%
Royal Dutch Shell 'A' (RDSA) 1,706.40p -1.43%
Anglo American (AAL) 2,755.00p -1.27%
Admiral Group (ADM) 3,011.00p -1.25%
BT Group (BT.A) 143.50p -1.20%
Royal Dutch Shell 'B' (RDSB) 1,722.40p -1.11%
Prudential (PRU) 1,442.00p -1.10%

FTSE 250 - Risers

Man Group (EMG) 219.30p 8.14%
Cineworld Group (CINE) 68.16p 6.04%
Baltic Classifieds Group (BCG) 218.00p 4.81%
Howden Joinery Group (HWDN) 873.00p 4.78%
Darktrace (DARK) 879.00p 4.64%
Marks & Spencer Group (MKS) 184.00p 4.13%
Kainos Group (KNOS) 1,884.00p 3.86%
Liontrust Asset Management (LIO) 2,095.00p 3.71%
Vistry Group (VTY) 1,166.50p 3.69%
Crest Nicholson Holdings (CRST) 370.80p 3.63%

FTSE 250 - Fallers

RHI Magnesita N.V. (DI) (RHIM) 2,936.00p -7.61%
Ferrexpo (FXPO) 306.40p -3.77%
Wood Group (John) (WG.) 218.60p -2.89%
easyJet (EZJ) 608.80p -2.65%
Centrica (CNA) 59.68p -2.29%
Micro Focus International (MCRO) 362.20p -2.11%
Babcock International Group (BAB) 348.00p -1.97%
Chrysalis Investments Limited NPV (CHRY) 227.00p -1.73%
National Express Group (NEX) 231.80p -1.70%
CMC Markets (CMCX) 267.00p -1.66%