The UK’s benchmark index FTSE 100 was flat on Thursday as gains from an in-line UK GDP data, showing a still-healthy economy, were offset by losses in companies that traded without entitlement to their latest dividend payouts.
The bluechip FTSE 100 was flat as of 0711 GMT after logging four sessions of gains, while the midcap FTSE 250 was down 0.2%.
Britain’s economy grew 0.6% in the second quarter of 2024, in line with economists’ expectations and building on a rapid 0.7% recovery in the first quarter of the year after a shallow recession in the second half of 2023.
“It’s worth noting that June’s GDP figure was completely flat, which might initially raise concerns. However, this could actually provide the Bank of England with further justification to consider cutting interest rates next month,” said Sam North, market analyst at investment platform eToro.
The pound was higher against the US dollar and money markets still see a 40% chance of BoE cutting rates by 25 basis points in September.
Overall, the investor sentiment remained sanguine partly after the benign US consumer inflation data overnight reinforced bets for the Federal Reserve to start cutting interest rates next month.
Among sectors, industrial metal miners slid 1.1%, on track for its third session of declines, as Rio Tinto and Anglo American traded ex-dividend.
Admiral Group jumped 11.6% after the motor and home insurer posted a forecast-beating 32% rise in pre-tax profit for the first half of the year, and said it would pay a special dividend.
FTSE 100 ends higher as softer CPI boosts rate optimism
Index heavyweight AstraZeneca was up 0.8% after the US Food and Drug Administration (FDA) granted its blockbuster cancer drug Imfinzi a priority review for patients with limited-stage small cell lung cancer in the United States.
HSBC, Barclays, and Entain were among the bottom performers as these companies also traded without entitlement to their latest dividend payouts.
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