ADVFN Morning London Market Report: Monday 12 December 2022

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London open: Stocks edge lower as investors mull GDP


London stocks edged lower in early trade on Monday as investors digested the latest UK GDP data and looked ahead to a week filled with key central bank announcements.

At 0850 GMT, the FTSE 100 was down 0.3% at 7,455.86.

Figures released earlier by the Office for National Statistics showed the economy returned to growth in October but the UK is still heading for recession.

The economy grew 0.5% in October following a 0.6% contraction in September, when it took a hit from the funeral of Queen Elizabeth. This was a touch ahead of economists’ expectations for 0.4% growth.

In the three months to October, however, the economy shrank by 0.3%, versus expectations of a 0.4% contraction. This marked the biggest decline since early 2021.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the monthly rise in GDP is likely to have been more of a temporary upswing rather than the start of a more positive chapter for the economy.

“A rebound in services largely accounted for the lift, after many companies scaled back promotional events, and workers had a bank holiday for the monarch’s funeral in September. However, production remains flat and while construction grew by 1.1%, more recent data indicates that sentiment in the building sector soured in November,” she said.

“Caution is in the air in financial markets ahead of a series of crunch central bank meetings around the world this week, with yet more interest rate hikes set to be unwrapped as inflation remains stubborn,” Streeter said.

“The Bank of England is still expected to raise rates though on Thursday by 0.5%, despite the fragility in the economy which is showing through so starkly as inflationary pressures stay so elevated.”

In equity markets, online supermarket Ocado was the worst performer on the top-flight index.

International Distribution Services also slumped after a downgrade to ‘hold’ at HSBC and as a string of Royal Mail strikes were set to take place.

On the upside, London Stock Exchange Group surged to the top of the FTSE 100 after Microsoft agreed to buy a 4% stake in the company as part of 10-year strategic partnership for next-generation data and analytics and cloud infrastructure solutions.

Wood Group also rallied after an upgrade to ‘buy’ at Jefferies.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Bae Systems Plc +1.65% +13.60 839.20
2 Centrica Plc +1.45% +1.34 93.58
3 Direct Line Insurance Group Plc +0.73% +1.50 206.50
4 Sse Plc +0.65% +11.00 1,707.00
5 British American Tobacco Plc +0.36% +12.00 3,328.00
6 Hikma Pharmaceuticals Plc +0.24% +3.50 1,484.50
7 Experian Plc +0.21% +6.00 2,901.00
8 Ashtead Group Plc +0.18% +9.00 4,911.00
9 Severn Trent Plc +0.18% +5.00 2,745.00
10 Smith & Nephew Plc +0.18% +2.00 1,100.00


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Fresnillo Plc -4.07% -35.60 838.40
2 Ocado Group Plc -3.99% -27.40 658.80
3 Marks And Spencer Group Plc -2.97% -3.65 119.40
4 British Land Company Plc -2.87% -11.40 385.20
5 Tui Ag -2.72% -3.95 141.25
6 Land Securities Group Plc -2.52% -15.80 610.80
7 Carnival Plc -2.35% -15.40 639.60
8 Prudential Plc -2.25% -24.50 1,066.00
9 Sainsbury (j) Plc -2.21% -5.00 221.40
10 Next Plc -2.02% -118.00 5,728.00


Monday newspaper round-up: Twitter, power prices, Channel 5, National Grid

Twitter is relaunching its subscription service on Monday, offering users verified status for $8 (£6.50) a month or $11 a month on their iPhone. The move follows a botched revamp of the service last month that resulted in a host of impersonator accounts appearing on the platform as some users took advantage of the chance to launch bogus “verified” accounts for major companies and public figures. – Guardian

UK power prices have hit record levels as an icy cold snap and a fall in supplies of electricity generated by wind power have combined to push up wholesale costs. The day-ahead price for power for delivery on Monday reached a record £675 a megawatt-hour on the Epex Spot SE exchange. The price for power at 5-6pm, typically around the time of peak power demand each day, passed an all-time high of £2,586 a megawatt-hour. – Guardian

Channel 5 is spearheading a bid to scupper longer television ad breaks on ITV over concerns the move would hand its rival a £150m revenue boost. Regulator Ofcom is reviewing whether to relax limits on advert breaks for public service broadcasters from an average of seven to nine minutes per hour to reflect growing competition from streaming services. – Telegraph

WhatsApp is threatened with a shut down in Britain as ministers press ahead with plans to require easier access to messages for police and MI5, the messaging app has warned. Will Cathcart, head of WhatsApp at Meta, which also owns Facebook and Instagram, told The Telegraph he was prepared to see the app blocked for British smartphone users rather than weaken its security. – Telegraph

National Grid has triggered emergency plans to fire up old coal plants as cold, still weather sparked fears of a supply shortage this evening. The company responsible for keeping the lights on has instructed two coal-fired units at Drax power plant in Yorkshire to be warmed up ready for potential usage today. – The Times

The privately owned company behind Octopus Energy has ambitious plans to go into what it calls “the death business” after buying a majority stake in a start-up that helps people to plan for their demise. Octopus Group is taking majority control of Guardian Angel, which was set up to help people to get their affairs in good order ahead of dying. The London-based business sells services such as will-writing, lasting powers of attorney and life assurance, as well as helping relatives to connect with undertakers and to tackle financial questions and bereavement problems after death. – The Times


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