UK stock markets continued their recovery on Thursday helped by positive economic data and a revival across the mining sector, a major contributor to the leading FTSE 100 index, with Anglo American’s (AAL) 3% gain topping the early leader board.
At 9am, the benchmark FTSE 100 was up 0.57% at 7,148.35, while mid-caps were even stronger, the FTSE 250 rallying 0.7% to 23,316.7.
UK GDP increased by 5.5% in the second quarter, revised up from the previous reading of 4.8%. Health services and the arts performed better than initially thought, according to the Office for National Statistics.
UK house prices also firmed, albeit modestly, up by 0.1% in September from August, according to Nationwide. On an annual basis, prices were up 10%.
‘STRONG’ START FOR DIAGEO
Drinks giant Diageo (DGE) was among the early leaders after the company made a ‘strong’ start to fiscal 2022, with organic net sale momentum across all regions. European business is recovering ahead of company expectations.
But the expectation that organic operating margins stand to benefit from a further recovery in sales volumes, positive channel mix and premiumisation trends got investors excited, lifting the share price 2.65% to £36.56.
Online fashion brand Boohoo (BOO:AIM) was a major casualty on Thursday, slumping 10% to 231.3p after dampening profit margin expansion hopes through the rest of the year.
First-half sales rose 20% to £975.9 million while gross profit rose similarly to £533.3 million, but elevated short-term cost headwinds experienced in the first half are expected to continue in the second six months.
That means that despite an expectation for full year sales growth of 20% to 25%, adjusted earnings before interest, tax, depreciation and amortisation margins are now expected to be 9% to 9.5%, compared to 9.5% to 10% as previously guided.
British American Tobacco (BATS) was the biggest early FTSE 100 loser being one of a handful of major stocks to go ex-dividend (where new investors lose the rights to the next dividend), as is the usual Thursday practice. BAT saw its share price fall 2.5% to £26.69.
Also in this category are housebuilder Barratt Developments (BDEV), down 2% and medical products group Smith & Nephew (SN.), 0.4% lower.
SPEEDY GROCERCIES HEAT UP
Food delivery platform Deliveroo (ROO) and soon to go private Morrisons (MRW) have launched Hop, a rapid grocery delivery service that promises to increase the competition on this emerging market.
Deliveroo stock rose 2% to 299.3p, with investors still cautious over the firm’s ability to turn revenue growth into profits.
Investors were all over shares of biotech Oxford Nanopore Technologies (ONT) sending them soaring more than 30% within minutes of their market debut on Thursday, indicating huge interest in life sciences companies listing in London.
The stock was trading at 605p having listed and debuted today at 425p, valuing the business at floatation at around £4.51 billion.
Also enjoying a strong start to trading was digital business Made Tech (MTEC), which opened at 130p and rallied to 147.5p.
