FTSE CLOSE: Recession over as GDP rises 1% in Q3; banks rise

| October 25, 2012 | 0 Comments

By
This Is Money Reporters

02:19 EST, 25 October 2012


|

11:30 EST, 25 October 2012

17.10 (close): London’s leading shares index stood still today as investors heeded warnings that figures showing an end to Britain’s double-dip recession masked weak underlying health.

The FTSE 100 Index had been higher after the Office for National Statistics revealed a higher-than-expected one per cent surge in gross domestic product (GDP) in the third quarter.

But the top flight pulled back to close flat at 5805.1 as analysts warned the bounce-back was driven by one-off factors such as the Olympics and growth would slowdown in the quarters ahead.


Recovery: Figures out today are expected to show the economy is finally out of recession

The strong headline figure did boost the pound, however, which rose to 1.61 against the US dollar and 1.24 against the euro.

Miners reversed gains towards the end
of the session with Evraz sinking to the bottom of the FTSE 100 Index,
dropping 14.9p to 235.4p, while Eurasian Natural Resources dropped 8.2p
at 333.4p.

In a busy day for corporate news,
households goods giant Unilever was among the biggest blue-chip risers
after beating expectations with a 5.9 per cent rise in underlying sales.

The Hellmann’s and Dove soap maker rose two per cent or 45p to 2310p after the third quarter update.

Banks were also on the risers board despite a hefty profits drop at Spanish-owned Santander.

Parent group Banco Santander reported
a 94 per cent plunge in third quarter profits as it took a hit on real
estate losses in Spain, while its UK arm also came under pressure after
falling profit margins left profits 27 per cent lower.

But Barclays brushed this aside,
rising 2.95p to 232.9p, and Lloyds Banking Group was also ahead, up 0.2p
to 40.7p, an improvement of one per cent.

Advertising and marketing giant WPP
was among the fallers, down two per cent, or 18.5p to 789.5p, after it
cut its full-year growth outlook for a second time in three months due
to fears over the prospects for trading in the United States and Europe.

Debenhams surged to the top of the
FTSE 250 Index risers board after it reported a 4.2 per cent rise in
pre-tax profits to £158.3million for the year to September 1. The
figures were accompanied by plans for another 17 UK stores over the next
five years. Shares jumped nine per cent, or 10p to 119p, and helped
other retail stocks to make headway.

They included JD Sports Fashion, which lifted 12p to 752p, and Dixons Retail Group with an improvement of 0.3p to 21p.

Details of a 42 per cent hike in five
month profits for ASOS failed to boost shares as the online retailer
poured cold water on market talk of a bid by internet giant Amazon.

The stock dropped  seven per cent, down 167p to 2326p.

Harry Potter publisher Bloomsbury was
also lower, down five per cent or 6.8p to 131.8p, after reporting a 42
per cent drop in first-half profits to £850,000 as global demand for
best-selling phenomenon Fifty Shades of Grey saw it lose out to rivals.

The biggest Footsie risers were
Carnival up 74p at 2505p, Fresnillo ahead 41p at 1930p, Aggreko up 43p
at 2089p and Unilever ahead 45p at 2310p.

The biggest Footsie fallers were
Evraz down 14.9p at 235.4p, Eurasian Natural Resources off 8.2p at
333.4p, WPP down 18.5p at 789.5p and Kazakhmys off 14p at 736p.

15:30:
London’s FTSE 100 Index rose 22.4 points to 5827.3 after the official
figures revealed the biggest improvement in GDP since 2007.

The
Dow Jones Industrial Average on Wall Street was also higher – up 0.5
per cent soon after opening and mirroring gains in Europe – as data
showed a hike in manufacturing orders.

Better-than-forecast earnings from US giant Procter Gamble also buoyed stocks.

In
a busy day for corporate news, households goods giant Unilever was
among the biggest blue-chip risers after beating expectations with a 5.9
per cent rise in underlying sales.

13:25: Santander’s UK savings products
provided a rare bright spot in otherwise gloomy financial results for
its Spanish parent, Europe largest bank, as savers flocked to its high
paying Isa and 123 current accounts.

Santander UK attracted a net
£5.6billion in bank deposits in the nine months to October. It
represents a turnaround after the bank saw net outflows of £2.1billion on the same basis a year ago. Read more here.

The
GDP figures lifted spirits on the FTSE 100 Index, which rose 15.1 points
to 5819.8, with the market also higher amid a flurry of corporate
results and trading updates.


Banks were also on the risers board despite a hefty profits drop at Spanish-owned Santander.
JD Sports Fashion lifted 19.75p to 759.75p, and Dixons Retail Group with an improvement of 0.5p to 21.2p.

Details of a 42 per cent hike in five month profits for ASOS failed to boost shares as the online retailer poured cold water on market talk of a bid by internet giant Amazon.
The stock dropped 7 per cent, down 186p to 2307p.

Harry
Potter publisher Bloomsbury was also lower, down 5 per cent or 7.5p to
131p, after reporting a 42 per cent drop in first-half profits to
£850,000 due to weak sales of its children’s and educational books.

Ford
said today it will stop making vans in Britain next year, cutting 1,400
jobs on top of 4,300 to be axed in Belgium as part of a plan by the
U.S. car maker to stem European losses expected to exceed $1.5 billion
this year.

It
is the fourth vehicle plant closure in recession-hit Europe announced
this year and comes just a day after Ford itself said it would shut its
48-year-old Genk plant in Belgium by 2014, as part of a wide-ranging
restructuring programme.

11:05

The FTSE 100 is up 21.93 points at 5,826.71 on better-than-expected GDP figures.

Debenhams is to open a further 17 UK
stores over the next five years, as it continued to buck the high street
gloom with a set of strong year-end results.

Pre-tax profits rose by 4.2 per cent to £158.3 million in the year to September 1, following a recent sales revival. 

Online
sales did particularly well, up 39.8 per cent to £250.6 million in the
year. Debenhams increased its medium term target to £600 million from
£500 million as a result. Read more here.

09:30

The
UK economy climbed out of the double-dip recession between July and
September after nine months of negative growth. GDP rose by a bigger
than expected one per cent, following a 0.4 per cent decline in the
previous quarter, according to the Office for National Statistics.
Read more here.

The FTSE 100 is up 28.44 points to 5,833.22.

The third-quarter growth rate was the highest since Q2 2007

The third-quarter growth rate was the highest since Q2 2007

09:00

Hellmann’s
and Dove soap maker Unilever topped the FTSE 100 Index risers board
today after impressing investors with third quarter trading figures.

Shares
in the household goods firm rose 3 per cent amid a better session for
the wider London market, with the top flight 33.2 points higher at
5837.6.

This
was despite a fall of 3 per cent, or 24.25p to 783.75p, for advertising
and marketing giant WPP after it cut its full-year growth outlook due
to fears over the prospects for trading in the United States and Europe.

Most
other blue-chip stocks were on the front foot, with Barclays up 3.45p
to 233.35p and Lloyds Banking Group ahead 0.7p to 41.2p. Unilever was
72.5p higher at 2337.5p after it reported a better-than-expected 5.9 per
cent rise in underlying sales growth for the quarter to September 30.

Debenhams
surged to the top of the FTSE 250 Index risers board after it reported a
4.2 per cent rise in pre-tax profits to £158.3 million for the year to
September 1. The figures, which were better than expected, were
accompanied by plans for another 17 stores over the next five years.
Shares jumped 7 per cent, or 7.3p to 116.3p, and helped other retail
stocks to make headway.

They included JD Sports Fashion, which lifted 13.75p to 329.85p, and Dixons Retail Group with an improvement of 0.2p to 20.9p.

08:10

Britain’s top share index edged
higher on Thursday, with miners gaining on expectations of an
improvement in demand for raw materials in top consumer China, while
some companies gained after announcing results.

At
08:10, the blue-chip FTSE 100 index was up 4.67 points, or 0.1 per
cent, at 5,809.75 points. It slipped to a two-week low in the previous
session before closing 0.1 per cent higher in choppy trade.

UK
mining index rose 1 per cent, mirroring gains in base metals, after
China’s Ministry of Industry and Information Technology said the
country’s factory output should grow faster in the last three months of
2012.

Consumer goods giant Unilever, up 2.7
per cent, topped the gainers’ list after posting a 5.9 per cent rise in
underlying sales in the third quarter, beating analyst forecasts.

However, WPP, the world’s largest
advertising group, fell 3.7 per cent after cutting its full-year outlook
for the second time in two months. 

PREVIEW:

The blue-chip index closed up 0.1 per cent, or 6.87 points higher, at 5,804.78 points, yesterday.

London copper rose this morning,
snapping four sessions of losses, on encouraging manufacturing data from
the United States and China and after the U.S. Federal Reserve’s
decision to leave its current stimulus policies unchanged.

China’s
factory output should grow faster in the last three months of 2012 than
in the third quarter, though the recovery remains clouded by
uncertainty in export markets, the Ministry of Industry and Information
Technology said today.

Britain probably came out of recession between July and September, economic growth numbers are widely expected to show later today, but the dangers of a relapse loom large.

The U.S. Federal Reserve yesterday stuck to its plan to keep stimulating U.S. growth until the job market improves even as it acknowledged some parts of the economy were looking a bit better.

Brent futures rose above $108 on hopes of a recovery in demand growth, although a worsening outlook for Europe capped gains. 

SHARES TO WATCH TODAY

ANGLO AMERICAN : The miner posted increased volumes in five of its seven key commodities including copper and iron ore in the third quarter, as it was cushioned for now from the full impact of weeks of crippling South African strikes.

UNILEVER : Consumer goods giant Unilever posted a 5.9 per cent rise in underlying sales in the third quarter, beating analyst forecasts, helped by strong demand for its goods in emerging markets.

ASTRAZENECA : The company’s sales slumped 19 per cent in the third quarter, underscoring the scale of the challenge confronting the drugmaker’s new chief executive, Pascal Soriot.

WPP : The world’s largest advertising group cut its full-year outlook for the second time in two months after a slowdown in trading in North America and Continental Europe hit its third quarter.

KAZAKHMYS : The company said copper cathode production was on target to reach full year guidance of between 285,000 to 295,000 tonnes.

DEBENHAMS : The company said yearly group profit before tax was up 4.2 per cent to £158.3 million.

INCHCAPE : Multinational car dealer Inchcape posted a 3.2 per cent rise in third-quarter underlying sales, helped by robust premium and luxury car sales and growth in Asia.

Filed Under: finance news

Leave a Reply

You must be logged in to post a comment.

Get Adobe Flash player