FTSE 100 Thursday
- GDP surprises after June surge
- Aviva hails strong performance
- Centrica buys Grain LNG facility
Market update: Insurers surge on results, FTSE 100 fades after record close
10:03 , Graeme EvansA surge for Admiral and Aviva was today offset by falls for ex-dividend stocks HSBC and BP as the FTSE 100 index failed to benefit from the UK’s GDP surprise.
London’s top flight underperformed leading European benchmarks with a decline of 7.91 points to 9157.32, having set a record close of 9165.23 last night.
The fact that a large number of blue-chips began trading without the right to their latest dividend award hindered the FTSE 100 as Rio Tinto reversed 4% or 179.5p to 4489p, BP fell 8.05p to 410.3p and HSBC lost 11.4p to 944p.
Admiral shares led the risers board, up 6% or 208p to 3576p after a 69% increase in half-year profit to £521 million came in ahead of City expectations.
Chief executive Milena Mondini de Focatiis called the first half performance “excellent” as she declared a 62% increase in dividend to 115p a share.
She added: “In the UK, car insurance prices have been falling for the last 18 months due to softer inflation. Our disciplined approach to pricing and growth means that we reported a great performance across the board.”
Aviva boss Amanda Blanc was also upbeat after half-year operating profit rose by 22% to £1.1 billion. This was 10% stronger than the City consensus.
The results did not include Direct Line after the acquisition of the Churchill and Green Flag insurer completed on 1 July. Aviva intends to publish more details on the integration and targets for the business in November.
Blanc said: “Trading has been very good right across Aviva. We are the number one UK wealth player, with more than £200 billion of assets, and net flows are up 16%.
“In general insurance we remained disciplined, growing sales by 7%, and operating profit by 29%.”
The shares rose 4% or 26.6p to a fresh multi-year high of 685.6p.
British Gas owner Centrica was another strong performer in the FTSE 100, lifting 4p to 166.1p after it announced the acquisition of the Grain LNG terminal from National Grid.
The site provides import and export facilities, regasification and rapid response gas storage capacity to balance the energy system.
The acquisition has been made in conjunction with Bridgepoint business Energy Capital Partners and involves a Centrica equity investment of £200 million.
Among other stocks on the risers board, Rolls-Royce lifted another 2% or 25p to 1106.5p after UBS upped its price target on the engines giant to 1375p.
Better-than-expected growth of 0.3% in today’s second quarter GDP release failed to boost the FTSE 250 index, which stood 13.61 points lower at 21,837.95.
Fallers included property group Savills, which dropped 38p to 937p after reporting a slower second quarter for transactional activity alongside half-year results that showed a 10% rise in underlying profits to £23.3 million.
Strong June boosts outlook for 2025 GDP
09:00 , Graeme EvansAn unexpectedly strong June performance today lifted second quarter GDP by 0.3%, much better than the 0.1% growth forecast in the City.
Capital Economics described the quarterly result as impressive given that some activity had been pulled forward into the first quarter ahead of rises in US import tariffs and UK stamp duty charges on 1 April.
However, the consultancy doubts the economy will maintain June’s pace of growth in the third quarter.
It said: “The weak global economy will remain a drag on UK GDP growth for a while yet.
“The full drag on business investment from April’s tax rises has yet to be felt. And the ongoing speculation about further tax rises in the Autumn Budget will probably keep consumers in a cautious mood.
“However, today’s release suggests the risks to our forecast of a 1.2% rise in GDP in 2025 are now to the upside.”
Deutsche Bank added: “To be sure, the economy is growing. Positive momentum is brewing. But animal spirits remain tepid.
“While the Chancellor is poised to focus her Budget on improving productivity – a very welcome focus for the UK – Number 11 should also prioritise lifting household and business confidence to sustain the UK’s outperformance.”
Ex-dividend stocks impact FTSE 100, Aviva shares rise 3%
08:19 , Graeme EvansThe FTSE 100 index fell 0.2% or 20.63 points to 9144.60, dragged lower by the large number of blue-chips trading without the right to their latest dividend.
Heavyweight stocks on the fallers board after being marked ex-dividend included HSBC, BP, Rio Tinto, Shell and GSK.
Aviva results lifted shares by 3% or 18.4p to a fresh multi-year high of 677.4p.
Motor insurer Admiral surged 6% or 186p to 3554p following the release of results but Diploma dropped 3% or 140p to 5305p after announcing the sudden departure of its finance boss.
Centrica shares rose 2.5p to 164.6p following the acquisition of the Grain LNG terminal from National Grid, which added 7p to 1040p.
FTSE 100 finance chief quits after “lapse in judgement”
07:46 , Graeme EvansFTSE 100-listed Diploma today said its chief financial officer has resigned following a “lapse in judgement” at a recent company event.
Chris Davies, who joined the company in November 2022, has stepped down from the board with immediate effect.
Diploma said: “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.”
Diploma, which owns a global portfolio of businesses in the sectors of seals, controls and life sciences, has soared in value over recent years.
Financial controller Wilson Ng has been appointed acting chief financial officer while the search for a permanent successor takes place. Davies was previously chief financial officer at National Express.
Diploma said there was no change in its guidance for the 2025 financial year.
Aviva profit rises 22%, dividend up 10%
07:32 , Graeme EvansAviva boss Amanda Blanc today hailed the insurer’s “outstanding” performance after half-year operating profit rose by 22% to £1.1 billion.
She said: “Trading has been very good right across Aviva. We are the number one UK wealth player, with more than £200 billion of assets, and net flows are up 16%.
“In general insurance we remained disciplined, growing sales by 7%, and operating profit by 29%.”
The results do not include Direct Line after the acquisition of the Churchill and Green Flag insurer completed on 1 July. Aviva intends to publish more details on the integration and its targets for the business in November.
Blanc said: “The combined business is a UK market leader with over 21 million customers, or 4 in 10 adults, and we are confident the deal will contribute significantly to Aviva’s future growth.”
The company reiterated its group targets for 2026, which include an ambition to deliver an operating profit of £2 billion. Shareholders are set to receive an interim dividend of 13.1p a share, up 10% on a year earlier.
Centrica unveils Grain LNG acquisition
07:20 , Graeme EvansBritish Gas owner Centrica today announced the acquisition of the Isle of Grain liquified natural gas terminal in a deal valued at about £1.5 billion.
The site, which is currently owned by National Grid, provides import and export facilities, regasification and rapid response gas storage capacity to balance the energy system.
The acquisition, which has been made in conjunction with Bridgepoint business Energy Capital Partners, involves a Centrica equity investment of £200 million.
Chief executive Chris O’Shea said: “The Isle of Grain terminal is a strategic asset that will support the UK's energy security for many decades to come, keeping energy flowing reliably and affordably to households and businesses across the country as we transition to net zero.”
He added: "Our decision to commit £3 billion of capital in both Sizewell C and the Isle of Grain demonstrates the attractiveness of the UK as an investment location underpinned by supportive government investment policies."
GDP growth better than expected in Q2
07:04 , Graeme EvansThe UK economy grew by more than expected in the second quarter, up 0.3% compared with City forecasts for a 0.1% rise.
The performance, which followed growth of 0.7% in the first quarter, was driven by a forecast-beating rise of 0.4% in June.
It also reflected an upward revision to April’s output estimate from 0.3% lower to a decline of 0.1%.
Monthly services output grew by 0.3% in June, production rose by 0.7% following a fall of 1.3% in May and construction lifted by 0.3%.
The economy grew by 1.2% on a year-on-year basis in the second quarter, today’s figures from the Office for National Statistics show.
FTSE 100 seen higher after record close, Asia markets fall
07:00 , Graeme EvansThe FTSE 100 index is set to make further progress after closing last night at a record high.
London’s top flight rose 0.2% or 17.42 points in yesterday’s session and is seen adding 0.1% at today’s opening bell. The record intraday level is 9,190.73
Leading Wall Street benchmarks also posted fresh all-time highs last night amid expectations that the Federal Reserve will cut interest rates next month.
The S&P 500 index and Nasdaq Composite gained 0.3% and 0.1% respectively but they were outperformed by a 1% surge for the Dow Jones Industrial Average.
Asia markets fell back this morning after a recent strong run, with the Nikkei 225 down by more than 1%. The pound is at $1.3573 ahead of today’s GDP figures.
