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London midday: Stocks maintain gains after GDP; TUI surges

By Michele Maatouk

Date: Tuesday 11 Feb 2020

London midday: Stocks maintain gains after GDP; TUI surges

(Sharecast News) - London stocks were still firmly in the green by midday on Tuesday as investors mulled the latest UK GDP figures, with well-received updates from the likes of TUI lending a hand.

The FTSE 100 was up 0.9% at 7,513.36.

Spreadex analyst Connor Campbell said: "The coronavirus death toll is now above 1000. Professor Gabriel Leung, the head of public health at Hong Kong University, has warned the illness 'could infect 60%' of the world population. And there have been increased criticisms about how the Chinese government has handled the outbreak.

"However, a slowing infection rate, and the assumption that global central banks will step in to provide liquidity when needed, has allowed the coin toss of the market's mood to come up positive."

On home shores, investors were digesting the latest data from the Office for National Statistics, which showed the economy stagnated during the last quarter of 2019, as the political turmoil and uncertainty surrounding Brexit weighed heavily.

According to the first estimate from the ONS, the UK's gross domestic product was flat in the fourth quarter, in line with forecasts, against revised growth of 0.5% in the third quarter. Year-on-year, fourth-quarter GDP rose 1.1% down, from a revised 1.2% in the previous three months.

However, the first estimate for December's GDP showed that it grew by 0.3%, compared to a 0.3% decline a month previously. That figure was slightly above expectations.

Overall, the ONS said that for the whole of 2019, GDP grew by 1.4%. That was a slight improvement on 2018, but remains one of the slowest rates of growth since the financial crisis.

ING said the GDP data "is now old news" for markets. "Not only did the Bank of England's recent projections factor in no growth in the fourth quarter, virtually every business survey has pointed to fresh optimism after the December election.

"The question now is whether this improved sentiment will filter into the dataflow. It is possible that we see an improvement in consumer spending this year, given that wage growth has been strong at a time where household energy costs are set to drag inflation lower. That said, the global coronavirus outbreak is a clear risk to spending over the next few months were it to spread more widely."

In equity markets, TUI racked up strong gains after the travel company upgraded full-year profits guidance as higher demand at its markets and airlines unit offset costs from the Boeing 737 MAX aircraft grounding. The company forecast underlying earnings before interest and tax of €850m - €1.05bn, compared with €893m it reported in the previous period.

Russ Mould, investment director at AJ Bell, said: "Given the backdrop of travel fears around the coronavirus and pictures of an infected cruise ship all over the news, TUI's positive news has taken the market by surprise.

"This is a solid update and one certainly helped by the demise of former rival Thomas Cook which has enabled TUI and others to increase market share. However, the message may not be the same in three months' time if the coronavirus isn't contained."

Ocado rose even as it said its annual loss more than quadrupled as costs rose and the online grocer and logistics company paid for the destruction by fire of a high-tech warehouse.

JD Sports was up even as the Competition and Markets Authority said its £90m takeover of Footasylum would "substantially" lessen competition. The CMA said its current view is that blocking the deal by requiring JD Sports to sell the Footasylum business may be the only way of addressing its competition concerns.

The stock was higher, however, as JD Sports said it had had a "robust" post-Christmas sales period in its key overseas markets and that earnings for the year to January 2020 were set to be "at least equal" to the top end of current market expectations of between £403m and £434m , after adjusting for IFRS16.

Airlines easyJet and IAG flew higher, while miners advanced, while William Hill rallied as it announced a strategic partnership with CBS Sports in the US.

Hammerson was boosted by an upgrade to 'buy' at Peel Hunt.

On the downside, UAE healthcare provider NMC Health was under the cosh again after US private equity firm KKR said it had not made a bid for the company.

Market Movers

FTSE 100 (UKX) 7,513.36 0.89%
FTSE 250 (MCX) 21,581.20 0.41%
techMARK (TASX) 4,161.37 0.59%

FTSE 100 - Risers

TUI AG Reg Shs (DI) (TUI) 961.40p 12.31%
Ocado Group (OCDO) 1,256.00p 3.20%
JD Sports Fashion (JD.) 871.40p 3.00%
International Consolidated Airlines Group SA (CDI) (IAG) 624.40p 2.97%
United Utilities Group (UU.) 1,013.00p 2.51%
easyJet (EZJ) 1,529.50p 2.44%
British Land Company (BLND) 583.20p 2.32%
Severn Trent (SVT) 2,617.00p 2.23%
Standard Chartered (STAN) 644.20p 2.16%
BP (BP.) 473.90p 2.00%

FTSE 100 - Fallers

NMC Health (NMC) 799.00p -13.73%
Evraz (EVR) 384.20p -1.28%
Compass Group (CPG) 1,978.00p -0.60%
SEGRO (SGRO) 909.40p -0.48%
Burberry Group (BRBY) 1,988.00p -0.40%
Bunzl (BNZL) 1,980.50p -0.33%
Barratt Developments (BDEV) 821.20p -0.32%
Whitbread (WTB) 4,595.00p -0.24%
Rolls-Royce Holdings (RR.) 691.00p -0.14%
Smith & Nephew (SN.) 1,866.00p -0.03%

FTSE 250 - Risers

William Hill (WMH) 186.80p 4.68%
FirstGroup (FGP) 128.70p 3.79%
Kaz Minerals (KAZ) 486.20p 3.67%
Hammerson (HMSO) 236.50p 3.37%
GVC Holdings (GVC) 930.60p 2.72%
888 Holdings (888) 137.90p 2.30%
Equiniti Group (EQN) 214.00p 2.29%
Cairn Energy (CNE) 169.40p 2.17%
Hunting (HTG) 314.40p 2.14%
Wood Group (John) (WG.) 387.20p 2.11%

FTSE 250 - Fallers

Tullow Oil (TLW) 43.10p -4.22%
Vivo Energy (VVO) 109.20p -4.21%
Beazley (BEZ) 590.00p -2.72%
TalkTalk Telecom Group (TALK) 115.40p -2.29%
Bakkavor Group (BAKK) 136.60p -1.73%
Avast (AVST) 454.40p -1.69%
IP Group (IPO) 66.20p -1.63%
Watches of Switzerland Group (WOSG) 373.40p -1.53%
Apax Global Alpha Limited (APAX) 180.00p -1.50%
Syncona Limited NPV (SYNC) 234.00p -1.47%


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