London midday: FTSE ekes out small gain as miners rally

(Sharecast News) - London stocks were just a smidgen higher by midday on Friday, with miners providing a boost in an otherwise lacklustre session, as investors digested a raft of UK data releases.

The FTSE 100 was up 0.1% at 10,754.42.

Dan Coatsworth, head of markets at AJ Bell, said: "Markets have lost their foothold after several weeks when it appeared they were successfully climbing the wall of worry.

"Weakened sentiment is emerging as the US-Iran impasse continues and concerns about government debt mount.

"Dismissed colourfully as a 'band-aid on a bullet hole' in some quarters, the relief offered by the US Treasury's intervention in longer-dated US government bonds this week has proved short-lived.

"Underlying factors, like the sheer scale of US government borrowings, having crossed the $40 trillion threshold, the size of deficits across the West, and the ongoing push higher in oil prices, mean yields have ticked up once more.

"This spelled trouble for Wall Street, as US stocks endured a rocky session, and led to a lukewarm start in Europe after mixed trading in Asia.

"The FTSE 100 did better than most, supported by its plethora of resources stocks. Gold prices pushed through the $4,500 mark as its safe-haven and inflation hedging credentials come to the fore."

Investors were sifting through a raft of economic releases, including a survey showing that the UK economy gained traction in August, underpinned by growth in the services sector.

The S&P Global flash UK PMI composite output index rose to 52.5 from 52.2 in July, coming in above the 50 mark that separates contraction from expansion for the second month in a row.

The services PMI business activity index ticked up to a six-month high of 52.8 in August, from 52.1 the month before. The flash UK manufacturing output index dipped to a five-month low of 51.2 this month from 52.9 in July.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "The UK economy picked up a bit more pace in August, adding to signs that we should see solid economic growth of around 0.3% in the third quarter. The expansion is being helped by sunny weather and tech investment, though as expected we have seen some softening of growth in the manufacturing sector as precautionary stock building cools.

"This reflects easing concerns, for now, over the economic impact of the war in the Middle East. Businesses are feeling more upbeat than at any time since the war began. Job losses are also moderating."

Figures released earlier by the Office for National Statistics showed that retail sales fell 0.5% in July, as expected, following a revised 0.7% rise in June, having been boosted a month earlier by hot weather and promotions. The ONS had previously estimated that sales rose 1% in June.

The ONS said clothing retailers reported earlier promotions bringing sales forward from July into June, as well as hot weather reducing footfall in July. On the year, retail sales grew 1.6% in July following 3.8% growth in June.

ONS chief economist Grant Fitzner said: "Retail sales increased in the latest three months, with all main sectors, apart from motor fuel, seeing growth.

"Some retailers told us that hot weather and promotions helped sales of outdoor products and items such as fans, with clothing and online sports merchandise also doing well."

Separate data from the ONS showed that government borrowing rose in July as spending growth outpaced receipts despite strong self-assessed income tax revenue.

Government borrowing was £1.8bn in July, up by £0.7bn from the same month a year earlier and £2.3bn above the Office for Budget Responsibility's forecast. Borrowing for the financial year to July was £56.7bn, down £6bn on the same period a year earlier, but £2.3bn above the OBR forecast.

ONS chief economist Grant Fitzner said: "Public sector borrowing was lower in the financial year to date than in the same period last year, both in total and as a share of the economy. However, it is above the OBR spring forecast.

"Conversely, borrowing was slightly higher this month than in July last year, with spending growth outpacing higher receipts, including from self-assessed taxes which often feed in more strongly in July."

Elsewhere, a survey showed UK consumer confidence hit its highest level in two years in August.

In equity markets, miners were the top performers on the FTSE 100 as metals prices rose, with Antofagasta, Anglo American, Fresnillo, Glencore and Rio Tinto all up. Hochschild and Endeavour Mining also shone.

JD Sports racked up strong gains, having tumbled on Thursday after downgrading full-year guidance.

Gamma Communications shot higher as it confirmed it is in preliminary talks with Waterland and Giacom about a possible takeover.

Domino's Pizza rose as Shore Capital upgraded its stance the shares to 'buy' from 'hold', saying the company's first-half results were reassuring, with good sales momentum, robust profit delivery and strong cash generation.

Precision engineering group Hunting tumbled as it reported lower firsthalf revenues and earnings and trimmed its fullyear underlying earnings guidance.

Market Movers

FTSE 100 (UKX) 10,754.42 0.06%

FTSE 250 (MCX) 24,608.73 0.41%

techMARK (TASX) 6,114.15 -0.41%

FTSE 100 - Risers

Antofagasta (ANTO) 3,931.00p 6.07%

JD Sports Fashion (JD.) 84.68p 5.84%

Anglo American (AAL) 4,084.00p 2.90%

Fresnillo (FRES) 3,242.00p 2.37%

Lion Finance Group (BGEO) 13,060.00p 2.27%

3i Group (III) 2,846.00p 1.90%

Glencore (GLEN) 595.30p 1.83%

Croda International (CRDA) 3,387.00p 1.59%

British Land Company (BLND) 431.20p 1.46%

Rio Tinto (RIO) 7,600.00p 1.37%

FTSE 100 - Fallers

GSK (GSK) 1,879.00p -2.16%

Smith & Nephew (SN.) 1,051.50p -2.10%

Experian (EXPN) 2,913.00p -1.82%

InterContinental Hotels Group (IHG) 157.70p -1.31%

BAE Systems (BA.) 2,119.00p -1.21%

Games Workshop Group (GAW) 18,540.00p -1.12%

Babcock International Group (BAB) 1,107.00p -1.07%

Bunzl (BNZL) 2,728.00p -1.02%

Rolls-Royce Holdings (RR.) 1,486.40p -0.89%

Melrose Industries (MRO) 470.20p -0.86%

FTSE 250 - Risers

Gamma Communications (GAMA) 1,045.00p 7.27%

Hochschild Mining (HOC) 631.50p 5.69%

Pan African Resources (PAF) 135.90p 5.28%

Endeavour Mining (EDV) 4,692.00p 4.36%

Domino's Pizza Group (DOM) 202.20p 3.59%

Oxford Biomedica (OXB) 522.00p 3.16%

Ithaca Energy (ITH) 276.50p 3.13%

Raspberry PI Holdings (RPI) 608.00p 2.91%

Dr. Martens (DOCS) 80.70p 2.28%

Trainline (TRN) 194.40p 2.16%

FTSE 250 - Fallers

Michael Page (PAGE) 215.40p -2.36%

Chemring Group (CHG) 577.50p -2.28%

Aston Martin Lagonda Global Holdings (AML) 33.80p -2.26%

Hays (HAS) 66.65p -2.06%

Bridgepoint Group (Reg S) (BPT) 317.60p -1.67%

Worldwide Healthcare Trust (WWH) 390.00p -1.64%

Spire Healthcare Group (SPI) 233.00p -1.27%

Hansa Investment Company Limited (DI) (HAN) 332.00p -1.19%

WPP (WPP) 383.60p -1.13%

JPMorgan Japanese Inv Trust (JFJ) 801.00p -1.11%