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GDP uplift boosts FTSE 100 as London markets shake off ‘cocktail’ of headwinds

The capital’s premier FTSE 100 index jumped 1.57 per cent to above 7,000 points, while the domestically-focused FTSE 250 index, which is more aligned with the health of the UK economy, climbed 2.55 per cent to 19,707.38 points

A better than expected GDP reading boosted London’s FTSE 100 during the morning session today.

The capital’s premier index climbed 0.52 per cent to 7,145.44 points during the first two hours of exchanges.

The UK economy grew by a faster than first thought rate between April and June, driven by Brits heading out spending savings accumulated during the worst of the Covid-19.

The Office for National Statistics (ONS) revised up their previous estimate for GDP growth to 5.5 per cent from 4.8 per cent this morning.

The FTSE has dismissed concerns that ongoing supply chain bottlenecks, high inflation and a fuel crisis will hamper the UK’s economic recovery.

The FTSE’s gains were surprising given “a cocktail of issues have been clouding the market in recent sessions, namely rising bond yields making tech stocks less attractive, ongoing supply chain issues, the spike in energy prices and broader inflation, and the Evergrande drama still playing out,” said Russ Mould, investment director at AJ Bell.

The blue-chip index was lifted by industrials, with miners Anglo American, Evraz and Rio Tinto topping the risers column, all up more than 2.30 per cent.

“The UK market was propelled by miners, oil producers and financials – all beneficiaries of strong economic activity, which is again perhaps a surprising movement given growing fears over global economic growth as we head towards 2022,” Mould added.

The mid-cap FTSE 250 also fared well during the opening session, adding 0.33 per cent, led higher by financials. CMC Markets and AJ Bell both gained 3.98 per cent and 2.59 per cent respectively.

More to follow.