Sharecast - The FTSE 100 was up 0.3% at 7,435.31.
Figures released earlier by the Office for National Statistics showed that the economy contracted by 0.1% in May following 0.2% growth in April. Still, this was ahead of expectations for a 0.3% contraction.
The construction sector eased by 0.2%, following a fall of 0.9% in April - revised down from an earlier estimate of a 0.6% decline - while production output fell 0.6%.
The dominant services sector stagnated, compared to a 0.3% uptick seen a month previously. The services sector also showed no growth in the three months to May, while production grew by 0.4% and construction by 0.2%.
Overall, GDP was flat in the three months to May when compared to the three months to February.
Monthly GDP is now estimated to be 0.2% above pre-pandemic levels in February 2020.
Danni Hewson, head of financial analysis at AJ Bell, said: "After a crackerjack session yesterday the FTSE 100 was just about hanging on to its gains on Thursday as the latest US inflation data fed hopes the Federal Reserve is nearing the end of its rate hiking cycle.
"That the Bank of England is perceived to be lagging a long way behind in its battle against inflation is reflected in sterling reaching its highest levels in well over a year against the dollar, and this is not helpful to an index packed full of overseas earners. Their foreign revenues are worth less in relative terms when the pound goes up.
"Later we should get more insight into the inflation picture in the US with producer prices, which tend to be a leading indicator for the trajectory of prices in the rest of the economy.
"UK GDP figures were underwhelming, with a month-on-month decline in May."
The US producer price index for June is due at 1330 BST, along with the latest initial jobless claims figures.
In equity markets, housebuilders were under the cosh, with Barratt Developments (LON:BDEV), Taylor Wimpey (LON:TW), Persimmon (LON:PSN), Bellway (LON:BWY), Crest Nicholson (LON:CRST) and Redrow (LON:RDW) all lower. The sector was hit by a disappointing update from Barratt - which forecast a more than 20% drop in home completions - and the latest survey from the Royal Institution of Chartered Surveyors (RICS), which showed that new house buyer inquiries fell to an eight-month low in June amid rising mortgage rates.
British American Tobacco (LON:BATS), FirstGroup (LON:FGP) and Supermarket Income REIT fell as they traded without entitlement to the dividend.
On the upside, Watches of Switzerland surged as it posted a big increase in full-year sales and profits.
Dr Martens (LON:DOCS) rallied as the bootmaker said trading since the start of the current financial year had been in line with expectations, adding that progress had been made rectifying the US warehousing fiasco that led to a series of profit warnings.
Diploma (LON:DPLM) gained after saying it had bought DICSA, a distributor of fluid power solutions into the European Seals aftermarket for £170m and that current trading was in line with expectations.
Softcat was boosted by an upgrade to ‘buy’ at Citi.
Market Movers
FTSE 100 (UKX) 7,435.31 0.26%
FTSE 250 (MCX) 18,612.62 0.18%
techMARK (TASX) 4,387.51 0.13%
FTSE 100 - Risers
Convatec Group (CTEC (LON:CTEC)) 206.60p 2.58%
Coca-Cola (NYSE:KO) HBC AG (CDI) (CCH) 2,435.00p 1.93%
Ocado Group (LON:OCDO) 619.80p 1.87%
Prudential (LON:PRU) 1,078.50p 1.79%
JD Sports Fashion (JD.) 152.60p 1.63%
Glencore (LON:GLEN) 465.45p 1.55%
Anglo American (LON:AAL) 2,361.00p 1.55%
Flutter Entertainment (CDI) (FLTR) 15,935.00p 1.40%
Hargreaves Lansdown (LON:HRGV) (HL.) 833.20p 1.31%
Rio Tinto (LON:RIO) 5,206.00p 1.28%
FTSE 100 - Fallers
Barratt Developments (BDEV) 404.70p -3.18%
Taylor Wimpey (TW.) 102.05p -2.67%
British American Tobacco (BATS) 2,543.00p -1.85%
Persimmon (PSN) 1,033.00p -1.71%
Berkeley Group Holdings (The) (BKG) 3,970.00p -1.71%
Legal & General Group (LGEN) 226.10p -1.22%
Rolls-Royce Holdings (LON:RR.) 147.00p -0.98%
St James's Place (STJ) 1,093.50p -0.86%
Whitbread (LON:WTB) 3,359.00p -0.71%
Melrose Industries (LON:MRON) (MRO) 490.00p -0.61%
FTSE 250 - Risers
Watches of Switzerland Group (WOSG) 724.50p 12.94%
Diploma (DPLM) 3,128.00p 5.53%
Softcat (SCT) 1,461.00p 5.34%
Domino's Pizza Group (DOM) 305.80p 4.51%
Caledonia Investments (LON:CLDN) 3,245.00p 3.51%
Renishaw (LON:RSW) 3,860.00p 2.82%
NCC Group (NCC) 104.40p 2.55%
Lancashire Holdings Limited (LRE) 621.50p 2.30%
IntegraFin Holding (IHP) 246.20p 2.24%
Bank of Georgia Group (LON:BGEO) 3,010.00p 2.21%
FTSE 250 - Fallers
Carnival (NYSE:CCL) 1,239.50p -4.10%
Senior (SNR) 168.80p -3.21%
Crest Nicholson Holdings (CRST) 182.70p -3.13%
CMC Markets (CMCX) 152.60p -2.93%
Elementis (LON:ELM) 104.80p -2.78%
Abrdn Private Equity Opportunities Trust (LON:APEO) 442.00p -2.75%
Sirius Real Estate Ltd. (SRE) 85.00p -2.75%
PureTech Health (PRTC) 220.00p -2.22%
Clarkson (CKN) 2,965.00p -2.15%
Wetherspoon (J.D.) (JDW) 715.50p -2.12%