London midday: FTSE edges up as attention turns to US inflation reading

(Sharecast News) - London stocks had edged higher by midday on Friday, helped along by a strong showing from the defensive utilities sector, as investors mulled the latest UK GDP and retail sales figures, and looked ahead to a key US inflation reading.

The FTSE 100 was up 0.2% at 8,681.85.

Russ Mould, investment director at AJ Bell, said: "A jump in retail sales in February and confirmation the UK economy managed to grow in the final quarter of 2024 were treated as small wins by the market. While not earth-shattering data, investors are taking any nuggets of good news they can get in the current fragile environment."

Figures from the Office for National Statistics showed the economy grew more strongly than initially thought last year.

The ONS revised its estimate for real annual GDP in 2024 to 1.1% from 0.9%.

Leading the annual improvement were upward revisions of 0.1 percentage points in the first and second quarters of 2024.

Growth in the second half was largely left unchanged, however.

In the third quarter there was none, and the ONS confirmed an 0.1% uptick in the final three months, although year-on-year, fourth quarter real GDP was revised up to 1.5% from 1.4%

The ONS said that of the periods open to review, growth was unrevised in five of the eight quarters compared with the first estimate.

The ONS's early estimates are regularly reviewed, as it receives updated or revised source data.

Separate figures from the ONS revealed that retail sales volumes rose by 1% in February.

That was down on January's revised 1.4% increase, but well ahead of consensus expectations of a 0.3% fall. Sales volumes were also at their highest since July 2022.

Driving the growth were non-food sales, which grew "strongly", the ONS said, and helped offset softer supermarket volumes.

Non-food stores, which include department, clothing and household retailers, rose by 3.1%. Jewellers reported strong demand for gold, in light of mounting geopolitical uncertainty, while household stores saw a 6.8% spike, the largest monthly rise since April 2021.

In contrast, food stores sales volumes fell 2% on the month, following a bumper 4.8% rise in January.

Year-on-year, overall retail sales volumes were 2.2% stronger.

In the three months to February, sales volumes rose 0.3% or by 2% year-on-year.

The ONS revised January's figure down to 1.4% from its initial estimate of 1.7% growth.

Looking ahead to the rest of the day, investors will be turning their attention to the release of the Federal Reserve's preferred measure of inflation, the personal consumption expenditures index, which is due for release at 1230 GMT.

Richard Hunter, head of markets at Interactive Investor, said the market is expecting a 2.5% year-on-year rise for February, equalling the January number, and 0.3% for the month.

In equity markets, utilities, which are defensive stocks, were standout gainers on the FTSE 100, with SSE, National Grid, United Utilities and Severn Trent all up.

SSE was also in focus after saying it has promoted its chief commercial officer Martin Pibworth to the CEO position, replacing current boss Alistair Phillips-Davies who will formally leave the company this summer.

Fresnillo, Endeavour and Hochschild Mining all rallied as gold prices hit fresh highs as the latest round of trade tariffs imposed by Donald Trump reignited fears of a global trade war.

Spot gold reached a record high of $3,086.21 earlier in the session, before retreating slightly. However, it remained 0.9% higher at $3,083.33 per ounce. It is now the fourth consecutive weekly gain, after the precious metal hit $3,000 for the first time ever earlier in March.

On the downside, WH Smith fell after selling its UK High Street business to Modella Capital for an enterprise value of �76m on a cash and debt-free basis.

The retailer, which will now focus on its travel outlets, said it expected net cash proceeds of around �25m when adjusted for transaction and separation costs, which would be spent in-line with its capital allocation policy.

It added that the deal did not include the funkypigeon.com personalised online greeting card business where strategic options were now being considered, including a possible sale.

Aston Martin was under the cosh again amid concerns about the impact of Trump's auto tariffs.

Market Movers

FTSE 100 (UKX) 8,681.85 0.18%

FTSE 250 (MCX) 19,924.08 0.05%

techMARK (TASX) 4,671.03 0.53%

FTSE 100 - Risers

SSE (SSE) 1,586.00p 2.55%

Severn Trent (SVT) 2,499.00p 2.50%

United Utilities Group (UU.) 1,001.00p 2.46%

National Grid (NG.) 1,004.00p 2.30%

Kingfisher (KGF) 253.20p 2.06%

Vodafone Group (VOD) 73.66p 1.97%

Sainsbury (J) (SBRY) 241.40p 1.86%

Marks & Spencer Group (MKS) 354.10p 1.67%

Haleon (HLN) 387.90p 1.57%

BT Group (BT.A) 165.35p 1.57%

FTSE 100 - Fallers

International Consolidated Airlines Group SA (CDI) (IAG) 284.10p -2.30%

Spirax Group (SPX) 6,425.00p -2.21%

Anglo American (AAL) 2,280.50p -1.79%

IMI (IMI) 1,915.00p -1.74%

Barclays (BARC) 298.65p -1.60%

Entain (ENT) 625.40p -1.51%

Rolls-Royce Holdings (RR.) 785.40p -1.46%

BP (BP.) 440.45p -1.24%

Rentokil Initial (RTO) 351.00p -1.18%

Melrose Industries (MRO) 510.80p -1.12%

FTSE 250 - Risers

Endeavour Mining (EDV) 1,836.00p 2.63%

Hochschild Mining (HOC) 274.00p 2.63%

NCC Group (NCC) 141.40p 2.61%

Crest Nicholson Holdings (CRST) 173.20p 2.12%

Harworth Group (HWG) 173.50p 2.06%

Vistry Group (VTY) 588.50p 2.00%

Spire Healthcare Group (SPI) 175.40p 1.98%

Telecom Plus (TEP) 1,756.00p 1.97%

BlackRock World Mining Trust (BRWM) 497.00p 1.95%

Derwent London (DLN) 1,849.00p 1.87%

FTSE 250 - Fallers

Close Brothers Group (CBG) 314.20p -5.02%

Trustpilot Group (TRST) 240.50p -3.99%

WH Smith (SMWH) 1,054.00p -3.67%

Aston Martin Lagonda Global Holdings (AML) 66.45p -3.06%

Playtech (PTEC) 707.00p -2.89%

Wizz Air Holdings (WIZZ) 1,618.00p -2.76%

Fidelity China Special Situations (FCSS) 273.50p -2.15%

Chemring Group (CHG) 378.50p -1.81%

Baillie Gifford Japan Trust (BGFD) 749.00p -1.71%

Serco Group (SRP) 157.10p -1.57%