Flat FTSE 100 Amid Mixed Market Signals

The UK’s FTSE 100 remained flat as positive gains from an in-line GDP growth were offset by losses due to dividend adjustments. The UK economy grew 0.6% in Q2 2024 as expected. Industrial metal miners faced declines while Admiral Group saw significant profit rise. The pound strengthened against the U.S. dollar.

The UK's benchmark index, FTSE 100, remained flat on Thursday despite positive UK GDP data indicating a still-healthy economy. The gains were negated by the losses from companies trading without entitlement to their latest dividends.

As of 0711 GMT, the bluechip FTSE 100 showed no movement following four days of gains, while the midcap FTSE 250 fell by 0.2%. The UK economy grew by 0.6% in the second quarter of 2024, aligning with the 0.7% growth in the first quarter after a shallow recession in late 2023.

Despite June's flat GDP figure raising initial concerns, Sam North, a market analyst at investment platform eToro, suggested it could justify a rate cut by the Bank of England next month. The pound strengthened against the U.S. dollar, with money markets predicting a 40% likelihood of a 25 basis point rate cut in September.

Overall investor sentiment was positive, buoyed by U.S. consumer inflation data reinforcing expectations of the Federal Reserve initiating interest rate cuts next month. Industrial metal miners declined by 1.1%, marking a third consecutive session of losses, as companies like Rio Tinto and Anglo American traded ex-dividend.

Admiral Group saw an impressive 11.6% rise after reporting a 32% increase in pre-tax profit for the first half of the year, along with a special dividend announcement. AstraZeneca gained 0.8% following the U.S. FDA granting a priority review for its cancer drug Imfinzi. HSBC, Barclays, and Entain ranked among the lowest performers due to trading ex-dividend.

(With inputs from agencies.)