Strong GDP sets FTSE on a mission

The FTSE may have struggled to puncture the 6600 level yesterday, but not so today.

The better-than-expected UK GDP for the third quarter, rising to 1.9% against the previous estimate of 1.5%, set the UK benchmark on a mission to see its first weekly gain since late October.

The mining sector is still the real issue causing FTSE underperformance, and today is no different. What’s interesting to note is that consumers and investment were the main drivers of growth, especially with exports worryingly falling by 3% and the current account deficit topping £20bn. As low wage growth continues to be a significant factor, one could question whether these growth moves can be sustained.

It's smooth sailing for Carnival shareholders this morning: the cruise operator beat earnings estimates as sales rose to $3.66bn compared to the $3.53bn average forecast. Passenger numbers also rose 3.3% to 2.5m in the quarter, indicating that the problems of the past are now firmly behind the company. While 2014 bookings may be slightly lower than last year, ticket-pricing is addressing the shortfall. The share price has now recouped all its losses year-to-date, gaining 11.4% this week alone.

BAE Systems was never expected to see much buying action today, having failed to win a £6bn contract to supply fighter jets to the UAE. Brokers do like to kick a company when it's down, so a plethora of downgrades have only added to the share price woes.

Polymetal International has practically taken residence down at the bottom of the blue-chip index owing to the rampant descent in gold prices, which are down 29% this year. Today the precious metals miner dropped back by 5%, bringing the total declines over the past four months to a staggering 40%.

The Dow Jones is set to open 26 points higher at 16,205.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.