30th Sep 2022 12:28
(Alliance News) - Stock prices in London were trading higher at midday on Friday, following a surprise upward revision to UK economic growth, and the promise of an independent forecast from the Office of Budget Responsibility in relation to the government's mini-budget.
The FTSE 100 index was 31.82 points higher, 0.5%, at 6,913.41. Friday rounds off a tough quarter for equities, which has seen the FTSE lose around 4%.
The FTSE 250 was up 223.27 points, 1.3% at 17,013.67, and the AIM All-Share was 3.21 points, 0.4% at 801.60.
The Cboe UK 100 was up 0.8% at 690.71, the Cboe UK 250 was up 1.1% at 14533.39, and the Cboe Small Companies was up 0.9% at 12692.94.
Market sentiment was lifted by better-than-expected figures for UK gross domestic product.
"UK second quarter final GDP grew by 0.2% improving versus the initial estimate for a contraction of 0.1%, helping the UK economy to avoid a recession at least for now. However, growth remains below its pre-pandemic levels unlike the rest of the G7 nations which have recovered their pre-covid levels of real GDP," Victoria Scholar, head of investment at interactive investor.
Consensus, according to FXStreet, had not been expecting any revision to the figures.
Meanwhile, the Office of Budget Responsibility said it will deliver an "independent" forecast of the government's controversial economic plan following a meeting with the prime minister and chancellor.
The unusual meeting between Liz Truss, Kwasi Kwarteng and the independent spending watchdog, which appeared to last under 50 minutes, came amid market turmoil following last week's mini-budget.
In a statement published shortly after the meeting, the OBR said it will deliver an initial forecast – which "will, as always, be based on our independent judgment about economic and fiscal prospects and the impact of the government's policies" – to the chancellor on October 7.
It said it will set out the full timetable up to November 23 next week, when the chancellor is due to reveal his highly-anticipated medium-term fiscal plan.
The meeting came amid widespread demands for a credible fiscal forecasts, after last Friday's budget rocked the markets and tanked the value of the pound.
Sterling has since staged something of a recovery, however. The pound was quoted at USD1.1097 at midday Friday, higher compared to USD1.1033 at the close on Thursday.
In European equities on Friday, the CAC 40 in Paris was up 1.0%, while the DAX 40 in Frankfurt was up 0.7%.
Inflation in the eurozone is forecast to accelerate faster than expected in September, according to preliminary figures from the statistical office of the EU.
Eurostat's flash estimate showed annual inflation is expected to reach 10% in September, picking up pace from 9.1% in August.
Inflation sped up quicker than predicted, overshooting FXStreet-cited consensus of 9.7%.
"The September reading for inflation is ugly across the board with all broad categories experiencing accelerating inflation," ING analysts.
The print all but guarantees another 75 basis point hike from the European Central Bank in October, ING concludes.
The euro stood at USD0.9766 at Friday, lower against USD0.9781 at the same time on Thursday.
Against the yen, the dollar was trading at JPY144.50, higher compared to JPY144.48 late Thursday.
In London, housebuilders led the way. Shares in the sector have suffered recently, as investors fret over rising interest rates.
Barratt Developments was up 4.2%, Taylor Wimpey gained 2.8% and Persimmon rose 3.4%.
Among midcaps, JLEN Environmental Assets was up 6.9% after it said it has bought a 50% equity stake Gigabox No 4, which holds the development rights to construct a battery energy storage plant in Scotland.
The environmental infrastructure investment fund said the 49.9 megawatts lithium-ion battery energy storage plant is based in Angus, Scotland.
The acquisition will see JLEN invest up to GBP16.4 million, with construction ready to start in early 2024.
The project will be connected to the Scottish Hydro Electric Power Distribution PLC's distribution network and has a 49.9 megawatts import and export connection.
JLEN added that the connection will be initially with a capacity of 45 megawatts, increasing to the full capacity by early 2025.
Fellow renewables investor, Bluefield Solar was up 4.3%.
It reported a net asset value total return of 28% in its financial year. NAV per share rose to 140.30 pence at June 30 from 115.83p a year before.
It boasted strong financial footing, and said it remains a "safe haven" for investors.
On AIM, Science in Sport fell 29%.
The sports nutrition company said it is beginning a strategic review, stating its current market capitalisation "fundamentally undervalues the company".
The review could result in the sale of the company or of certain assets, it said.
In the six months to June 30, SIS' loss widened to GBP7.2 million from GBP2.9 million a year before. It is also planning a placing to raise GBP5.0 million.
Stocks in New York were called higher, with the DJIA called up 0.8%, the S&P 500 index up 0.9%, and the Nasdaq Composite expected 0.9% higher.
On the US economic calendar, there is a core personal consumption expenditures reading. Core PCE is the Federal Reserve's preferred inflationary gauge.
Brent oil was quoted at USD89.23 a barrel at midday Friday, up from USD88.58 late Thursday. Gold was quoted at USD1,665.33 an ounce Friday, up against USD1,658.20.
By Elizabeth Winter; [email protected]
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