FTSE 100 climbs on stronger UK GDP, on track for worst month since March
EWU•The FTSE 100 rose 0.26% to 10,664.93 as stronger-than-expected UK GDP lifted sentiment, but the index was on course for its biggest monthly loss since March. The FTSE 250 gained 0.74% but was set to fall for the month.
1. GDP supports stocks
Britain’s economy grew 0.5% in the second quarter, faster than previously thought, the Office for National Statistics said. The stronger data helped cyclical stocks, with banks providing the biggest boost to the FTSE 100. The index was also headed for its seventh consecutive quarterly gain.
2. Sector moves diverge
Utilities rose 2.7% after UK Prime Minister Andy Burnham made policy announcements for the sector a day earlier. National Grid and SSE each added about 3%, while United Utilities and Severn Trent climbed about 2.3% each. Energy stocks fell around 1%, limiting gains.
3. Rates and company news
Persistent inflation concerns and rising bond yields dampened sentiment. Bank of England policymaker Alan Taylor said it was unclear whether a single rate hike could tame inflation without prompting unwarranted speculation about further increases; traders were pricing at least one 25-basis-point hike this year. Greggs advanced 7.4% after raising its annual profit outlook as underlying sales growth accelerated in the third quarter.
