London equity markets drifted lower in early trade on Thursday, with a number of stocks trading ex-dividend, as investors mulled the latest UK GDP data.
At 0825 BST, the FTSE 100 was down 0.3% at 9,138.16.
Data released earlier by the Office for National Statistics showed that economic growth slowed less than expected in the second quarter.
The economy grew 0.3% following 0.7% growth in the first quarter, and versus expectations for a 0.1% expansion.
The ONS said growth was driven by increases of 0.4% in services and 1.2% in construction, while growth the production sector fell 0.3%.
In the month of June, the economy grew 0.4%.
Liz McKeown, director of economic statistics at the ONS, said: “Growth slowed in the second quarter after a strong start to the year.
“The economy was weak across April and May, with some activity having been brought forward to February and March ahead of stamp duty and tariff changes, but then recovered strongly in June.
“Across the second quarter as a whole growth was led by services, with computer programming, health and vehicle leasing growing.
“Construction also increased while production fell back slightly.
“Growth for the quarter was also boosted by updated source data for April, which while still showing a contraction, was better than initially estimated.
“Services also drove growth in June with scientific R&D, engineering and car sales all having a strong month.
“Within production, which recovered, manufacture of electronics performed especially well.”
Danni Hewson, head of financial analysis at AJ Bell, said: “Whether you are a cup half empty or a cup half full type of person will determine how you view this latest set of UK growth figures.
“The economy has continued its positive trajectory and grew by more than had been expected in the three months to June, despite a challenging backdrop – not least from the government’s own actions on business taxation. But that growth has slowed significantly from the 0.7% charge at the start of the year and even the most charitable can’t consider the pace as anything other than sluggish, especially when you factor in population growth.
“For Rachel Reeves today’s figures will provide a welcome boost as she draws up her Budget plans, with promises that she is looking for ways to go further and faster when it comes to stimulating the economy. The government put growth at the top of its agenda, so expansion in the construction sector will provide a glimmer of hope that at least some of its plans are beginning to bear fruit.
“The slowdown had been anticipated as the threat of tariffs became reality in April, which spurred many manufacturers to front load production. Trump’s Liberation Day shock forced some businesses to temporarily halt lines, but a favourable trade agreement has enabled output to pick up again as June showed growth in all sectors including manufacturing.
“Despite shaky consumer confidence, the service sector delivered the biggest boost to June’s figures. This was helped along by balmy temperatures which tempted people to visit beer gardens and ice cream parlours.
“The question now is whether growth can be sustained in the face of speculation about tax rises in the autumn, which could further undermine flagging business sentiment.”
In equity markets, Rio Tinto, GSK, Hikma, BP and Unilever all fell as they traded without entitlement to the dividend.
Diploma tumbled as it said that chief financial officer Chris Davies has resigned with immediate effect. “This decision follows a recent company event where, through a lapse in judgement, his personal behaviour did not meet the high standards required of the group’s leadership team,” the company said in a brief statement.
On the upside, Aviva shot to the top of the FTSE 100 after it said half-year operating profit surged 22% as it hiked prices and grew premium income.
Admiral was also a high riser as it posted a 69% increase in first-half pre-tax profit before continuing operations to a record £521m.
Centrica advanced after it and Energy Capital Partners bought National Grid’s Grain LNG business for £1.66bn.
Real estate advisor Savills gained as it reported a rise in first-half profit and revenue, pointing to a strong first-quarter performance but a more subdued transactional market in the second quarter.
Market Movers
FTSE 100 (UKX) 9,138.16 -0.30%
FTSE 250 (MCX) 21,816.12 -0.16%
techMARK (TASX) 5,259.76 -0.08%
FTSE 100 – Risers
Aviva (AV.) 678.00p 2.88%
Admiral Group (ADM) 3,438.00p 2.08%
Centrica (CNA) 164.70p 1.60%
Rolls-Royce Holdings (RR.) 1,096.00p 1.34%
CRH (CDI) (CRH) 8,352.00p 1.04%
Babcock International Group (BAB) 976.00p 0.93%
BAE Systems (BA.) 1,747.00p 0.90%
Flutter Entertainment (DI) (FLTR) 21,540.00p 0.89%
St James’s Place (STJ) 1,295.00p 0.86%
Smurfit Westrock (DI) (SWR) 3,290.00p 0.77%
FTSE 100 – Fallers
Rio Tinto (RIO) 4,479.00p -4.06%
GSK (GSK) 1,410.50p -1.71%
HSBC Holdings (HSBA) 941.30p -1.48%
Shell (SHEL) 2,632.00p -1.40%
Hikma Pharmaceuticals (HIK) 1,786.00p -1.38%
Diploma (DPLM) 5,375.00p -1.29%
Unilever (ULVR) 4,517.00p -1.16%
BP (BP.) 413.65p -1.12%
Anglo American (AAL) 2,136.00p -1.07%
Persimmon (PSN) 1,117.50p -1.02%
FTSE 250 – Risers
Dr. Martens (DOCS) 78.00p 3.11%
Bakkavor Group (BAKK) 239.50p 2.79%
TBC Bank Group (TBCG) 4,825.00p 2.55%
Auction Technology Group (ATG) 343.00p 2.39%
Savills (SVS) 995.00p 2.05%
Currys (CURY) 115.00p 1.68%
Wizz Air Holdings (WIZZ) 1,339.00p 1.29%
Ocado Group (OCDO) 358.30p 1.27%
Breedon Group (BREE) 381.60p 1.22%
Aston Martin Lagonda Global Holdings (AML) 73.95p 1.02%
FTSE 250 – Fallers
Harbour Energy (HBR) 228.40p -4.03%
Wickes Group (WIX) 210.00p -3.67%
Abrdn (ABDN) 196.00p -3.16%
Investec (INVP) 537.00p -3.16%
The Renewables Infrastructure Group Limited (TRIG) 78.90p -2.47%
Bytes Technology Group (BYIT) 351.20p -2.44%
Vesuvius (VSVS) 354.40p -2.42%
WH Smith (SMWH) 1,055.00p -2.13%
Genuit Group (GEN) 362.00p -1.90%
Greencoat UK Wind (UKW) 115.80p -1.78%