London midday: Stocks edge down ahead of China update; UK GDP in focus

London stocks had edged lower by midday on Friday as investors mulled the latest UK GDP data and awaited an update on China's stimulus plans.

The FTSE 100 was down 0.2% at 8,221.11.

Dan Coatsworth, investment analyst at AJ Bell, said: "A lot of investors are sitting on their hands, waiting for tomorrow’s update from China’s finance ministry about plans to accelerate economic growth in the country."

On home shores, figures from the Office for National Statistics showed the economy returned to growth in August.

GDP rose 0.2% following no growth in June and July, in line with economists’ expectations.

Services output grew 0.1% in August following an increase of 0.1% in July, while production output rose 0.5% following a revised 0.7% decline the month before.

Output in construction was up 0.4% in August following a 0.4% drop In July.

ONS director of economic statistics, Liz McKeown, said: "All main sectors of the economy grew in August, but the broader picture is one of slowing growth in recent months, compared to the first half of the year.

"In August, accountancy, retail and many manufacturers had strong months, while construction also recovered from July's contraction. These were partially offset by falls in wholesaling and oil extraction."

ING economist James Smith said: "The bottom line is that the economy still seems to be growing at a reasonable pace, but the 0.6/0.7% quarterly GDP readings we became accustomed to in the first two quarters of the year are not going to be repeated in the second half of the year. We’re looking for 0.2% growth in the third quarter overall.

"That has two main implications for policy. Firstly, it suggests the Bank of England was right to take those stronger first-half growth figures with a pinch of salt. It could have conceivably used those better figures as an opportunity to revise up its growth forecasts for the next couple of years, but it rightly has chosen not to do so.

"That means next week’s services inflation figures will be more important. We think this should start to undershoot BoE forecasts, which is likely to accelerate policy easing. We expect cuts in both November and December.

"Secondly, if the Treasury was hoping the stronger first-half growth would unlock some extra fiscal headroom in the forthcoming budget, then it is likely to be left disappointed."

In equity markets, Sainsbury’s was under the cosh after its biggest shareholder, Qatar Investment Authority, placed 109m shares in the supermarket chain. The shares were placed via Goldman Sachs at 280p each, which is a discount of around 2.8% to the closing share price on Thursday.

BP dipped as it followed sector rival Shell and said it expected third-quarter realised refining margins to hit operating profit by $0.4bn to $0.6bn and warned its oil trading result would be weak as it felt the impact of lower crude prices.

Jupiter Fund Management fell after it reported lower assets under management as clients pulled £1.6bn during the third quarter.

On the upside, recruiter Hays gained even as it said it expects earnings to be sequentially lower in the first half as a result of ongoing challenging market conditions, which resulted in a big drop in fees in the first quarter.

Saga rallied as the travel-to-insurance business revealed it was in advanced discussions with Belgium’s Ageas about a potential partnership deal.

Market Movers

FTSE 100 (UKX) 8,221.11 -0.20%
FTSE 250 (MCX) 20,707.72 0.00%
techMARK (TASX) 4,759.86 -0.30%

FTSE 100 - Risers

Mondi (MNDI) 1,458.50p 1.67%
Vistry Group (VTY) 916.00p 1.66%
Barratt Redrow (BTRW) 459.50p 1.35%
Rio Tinto (RIO) 5,112.00p 0.85%
Diploma (DPLM) 4,236.00p 0.81%
Anglo American (AAL) 2,317.50p 0.80%
Flutter Entertainment (DI) (FLTR) 18,315.00p 0.71%
Taylor Wimpey (TW.) 153.00p 0.69%
Fresnillo (FRES) 658.50p 0.69%
IMI (IMI) 1,797.00p 0.62%

FTSE 100 - Fallers

Sainsbury (J) (SBRY) 271.80p -5.63%
BT Group (BT.A) 143.40p -1.54%
Melrose Industries (MRO) 428.30p -1.54%
Reckitt Benckiser Group (RKT) 4,613.00p -1.35%
Croda International (CRDA) 4,030.00p -1.35%
Prudential (PRU) 679.00p -1.34%
B&M European Value Retail S.A. (DI) (BME) 405.40p -1.24%
Vodafone Group (VOD) 73.86p -1.07%
GSK (GSK) 1,490.00p -1.00%
Tesco (TSCO) 355.90p -0.97%

FTSE 250 - Risers

Hochschild Mining (HOC) 200.50p 5.30%
Centamin (DI) (CEY) 152.10p 2.08%
Investec (INVP) 588.00p 1.99%
Bluefield Solar Income Fund Limited (BSIF) 105.40p 1.74%
Hays (HAS) 87.10p 1.57%
Quilter (QLT) 137.00p 1.48%
Raspberry PI Holdings (RPI) 391.10p 1.43%
Sirius Real Estate Ltd. (SRE) 93.70p 1.30%
Endeavour Mining (EDV) 1,722.00p 1.23%
Future (FUTR) 985.50p 1.23%

FTSE 250 - Fallers

Ithaca Energy (ITH) 102.70p -2.56%
Alpha Group International (ALPH) 2,060.00p -2.37%
Close Brothers Group (CBG) 364.40p -2.10%
Helios Towers (HTWS) 105.80p -2.04%
Currys (CURY) 87.35p -2.02%
Jupiter Fund Management (JUP) 86.10p -1.71%
W.A.G Payment Solutions (WPS) 81.00p -1.70%
Foresight Group Holdings Limited NPV (FSG) 494.00p -1.59%
Baillie Gifford Japan Trust (BGFD) 738.00p -1.47%
Apax Global Alpha Limited (APAX) 140.00p -1.41%