London midday: Stocks tick up after GDP figures; NMC Health tumbles

(Sharecast News) - London stocks had ticked a little higher by midday on Friday as third-quarter UK economic growth was revised up, but gains were unspectacular as the Christmas lull began to set in.
The FTSE 100 was 0.2% higher at 7,588.53 , while the pound was up 0.1% against the dollar at 1.3020 and 0.3% firmer versus the euro at 1.1733 as MPs were set to vote on Prime Minister Boris Johnson's Brexit deal.

Neil Wilson, chief market analyst at Markets.com, said "GBP crosses may be sensitive to some of the headlines but by-and-large there ought to be no surprises with the bill expected to pass easily".

Oanda analyst Craig Erlam reflected on the "strange" week gone by. "The US President has been impeached, we've got a new UK government after it was confirmed around this time last week that the Conservatives have their biggest majority in decades and today, said government will likely pass the EU withdrawal bill.

"And yet, this has largely been a week to forget as long as the markets are concerned. I guess when you remove all of the political theatre and strip it down to what it all means, there's nothing there that really moves the needle and ultimately, that's all investors care about.

"Trump won't be impeached by members of his own Republican Party in the Senate, certainly not with a two thirds majority. The UK election result was priced in last week and with it, the passing of the bill. While this may be a forgetful week for the markets, it's easy to forget it's been far from a normal week, generally speaking."

Investors were mulling over the latest figures from the Office for National Statistics. Quarter-on-quarter UK economic growth in the three months to September was 0.4%, an upward revision of 0.1 percentage points. Analysts had predicted no change.

Year-on-year, UK GDP increased 1.1%, also a 0.1 percentage point upward revision.

The ONS also said that the current account deficit had narrowed to £15.9bn in the third quarter from £24.2bn in the previous three months. That was marginally above consensus expectations of £15.5bn.

Rob Kent-Smith, head of GDP at the ONS, said: "GDP growth was revised up slightly for the third quarter of 2019, as later data showed the service sector performed more strongly than previously estimated. On the other hand, new data lead to a small downward revision to growth in the last quarter of 2018.

"The UK's balance of payments deficit with the rest of the world shrank, mainly due to a jump in UK goods exports."

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "The upward revision to GDP growth leaves the year-over-year growth rate only fractionally below the Monetary Policy Committee's estimate of its trend range of a 'bit below 1.5%', weakening the case for immediate rate cuts.

"The most discouraging aspect of the national accounts is the downward revision to estimates of households' incomes in recent quarters, with the result that the saving rate now appears to have flatlined at a low level over the last three years, and not recovered as previously thought. This suggests that households don't have much scope to ride out future income shocks and carry on spending.

"Nonetheless, we still expect a recovery in consumers' confidence, a pick-up in employment and low CPI inflation to ensure that households' spending rises at a solid rate over the next couple of quarters."

On the corporate front, AstraZeneca rose after selling the rights to two cancer drugs in Europe, Africa and certain other countries for $181m.

NMC Health tumbled following a report that the Abu Dhabi-based healthcare operator was in talks to raise hundreds of millions of dollars of off-balance sheet debt to fund new hospitals. According to the Financial Times, NMC has sought this year to raise a €200m loan through a complicated chain of special-purpose vehicles.

NMC Health has been under pressure this week after research firm and short-seller Muddy Waters put out a report highlighting "serious concerns" about its financial statements and accusing the company of manipulating its balance sheet to understate debt.

Oil giant Royal Dutch Shell was weaker after it forecast full-year capital expenditure near the lower end of the $24bn-29bn range in 2019 and flagged fourth quarter post-tax impairment charges of between $1.7bn and $2.3bn.

Just Eat was in the red after the food delivery business rejected a final enhanced takeover offer from South Africa's Prosus and urged shareholders to approve the £6.3bn bid from Takeaway.com of the Netherlands.

The company said it "continues to believe that the combination with Takeaway.com is based on a compelling strategic rationale that allows shareholders to participate in the upside potential of the enlarged group".



Market Movers

FTSE 100 (UKX) 7,588.53 0.19%
FTSE 250 (MCX) 21,592.50 -0.34%
techMARK (TASX) 4,194.86 0.39%

FTSE 100 - Risers

Scottish Mortgage Inv Trust (SMT) 571.00p 2.24%
Croda International (CRDA) 4,968.00p 2.10%
Burberry Group (BRBY) 2,192.00p 1.91%
London Stock Exchange Group (LSE) 7,596.00p 1.82%
Reckitt Benckiser Group (RB.) 6,077.00p 1.81%
Compass Group (CPG) 1,902.00p 1.77%
Hargreaves Lansdown (HL.) 1,991.50p 1.68%
Pearson (PSON) 624.60p 1.56%
Imperial Brands (IMB) 1,854.20p 1.56%
AstraZeneca (AZN) 7,752.00p 1.55%

FTSE 100 - Fallers

NMC Health (NMC) 1,199.00p -21.97%
Persimmon (PSN) 2,615.00p -1.84%
Standard Chartered (STAN) 725.60p -1.76%
Land Securities Group (LAND) 948.40p -1.50%
Barclays (BARC) 180.68p -1.47%
Royal Bank of Scotland Group (RBS) 243.90p -1.41%
Next (NXT) 7,036.00p -1.35%
British Land Company (BLND) 605.20p -1.34%
Just Eat (JE.) 801.20p -1.33%
BT Group (BT.A) 202.05p -1.22%

FTSE 250 - Risers

Hochschild Mining (HOC) 156.90p 3.22%
Synthomer (SYNT) 355.40p 2.36%
Watches of Switzerland Group (WOSG) 354.00p 2.31%
Beazley (BEZ) 547.00p 2.24%
PZ Cussons (PZC) 184.40p 2.10%
IWG (IWG) 415.80p 1.41%
Spectris (SXS) 2,921.00p 1.35%
Ultra Electronics Holdings (ULE) 2,144.00p 1.32%
Euromoney Institutional Investor (ERM) 1,294.00p 1.25%
St. Modwen Properties (SMP) 475.00p 1.17%

FTSE 250 - Fallers

Stagecoach Group (SGC) 158.50p -3.47%
Capita (CPI) 163.45p -3.28%
Fisher (James) & Sons (FSJ) 1,996.00p -3.11%
Ferrexpo (FXPO) 152.50p -3.05%
Drax Group (DRX) 324.60p -2.87%
McCarthy & Stone (MCS) 144.00p -2.70%
TBC Bank Group (TBCG) 1,286.00p -2.58%
Go-Ahead Group (GOG) 2,134.00p -2.47%
William Hill (WMH) 177.15p -2.45%
Virgin Money UK (VMUK) 185.80p -2.39%