London’s FTSE 100 closed higher on Friday, though stocks in New York struggled, taking little confidence from a key US inflation gauge producing no scares.
The FTSE 100 index ended up 44.33 points, 0.5%, at 8,275.38. The FTSE 250 ended up 59.25 points, 0.3%, at 20,730.12, and the AIM All-Share closed up 3.10 points, 0.4%, at 805.79.
For the week, the FTSE 100 lost 0.5%, the FTSE 250 fell 0.2%, while the AIM All-Share gave back 0.5%.
It is the FTSE 100’s third-successive weekly loss, though it did add 1.6% over the whole of May.
The Cboe UK 100 ended up 0.5% at 825.83 on Friday, the Cboe UK 250 closed down 0.3% at 18,173.78, and the Cboe Small Companies fell 0.8% to 17,084.00.
In European equities on Friday, the CAC 40 in Paris closed up 0.2%, while the DAX 40 in Frankfurt ended flat.
In New York, the Dow Jones Industrial Average was up 0.1% at the time of the European equities close. The S&P 500 was down 0.5%, while the Nasdaq Composite shed 1.2%.
The pound was quoted at $1.2719 at the time of the London equities close on Friday, lower compared to $1.2738 at the equities close on Thursday. The euro stood at $1.0844, higher against $1.0839. Against the yen, the dollar was trading at JP¥157.24, higher compared to JP¥156.65.
The Bureau of Economic Analysis said the core personal consumption index gauge grew 2.8% on-year in April, the same pace of expansion as in March. The figure was in line with FXStreet cited consensus.
The core PCE index does not include food or energy. The headline index, which does, rose 2.7% on-year in April, as expected and in a repeat of its March performance.
On-month, the core PCE index rose 0.2% in April, easing from 0.3% in March. It had been expected to register another 0.3% rise, according to FXStreet.
The headline PCE index rose 0.3% in April from March, like it did in March from February. The April reading was in line with market expectations.
‘The Federal Reserve’s favoured inflation measure rose 0.2% [month-on-month]. That’s what we need to see to soothe the Fed’s inflation worries, but one is not enough. We need a series of 0.2% readings between now and September, with further slack in the jobs market and more evidence of a cooling consumer spending story. All certainly possible, but by no means guaranteed,’ ING analysts commented.
According to Eurostat, yearly consumer price inflation in the eurozone picked up to 2.6% in May, having risen by 2.4% in April. This was hotter-than-expected, with FXStreet expecting a 2.5% year-on-year rise in consumer prices.
The reading came ahead of next week’s European Central Bank decision.
‘Having agreed to do so at their last meeting, we think the ECB Governing Council will go ahead and cut the deposit rate by 25bp next week, to 3.75%. As the recent inflation data have been a bit higher than the Bank had expected, back-to-back rate cuts now seem unlikely. But on balance, we still think the disinflation process is broadly on track so we forecast a total of four 25bp rate cuts this year, which would bring the deposit rate down to 3.0% by December,’ Capital Economics analyst Andrew Kenningham commented.
In London, JD Sports lost 4.7%, the worst large-cap performer.
The Lancashire, England-based sports-fashion retail company said revenue climbed 4.1% to £10.42 billion in the 53 weeks ended February 3, from £10.13 billion in the 52 weeks ended January 28, 2023.
In the 52 weeks ended January 27, 2024, revenue was up 2.7% to £10.40 billion from £10.13 billion a year prior.
‘Trading was impacted in the first half of the year by slower camping sales and in the second half of the year by unseasonably mild weather which affected sales of winter apparel and accessories,’ JD Sports said.
Pretax profit jumped 67% in the 53 weeks ended February 3 to £811.2 million from £486.7 million in the 52 weeks ended January 28, 2023.
However, adjusted pretax profit in the 52 weeks to January 27 fell 8.0% to £912.4 million compared to £991.4 million a year prior.
AJ Bell analyst Laith Khalaf commented: ‘One of UK retail’s biggest success stories, JD Sports, has found life a bit trickier in recent years and not just thanks to the pandemic. While its youthful demographic, with some of its customers still living at home, may not have been as immediately impacted by the cost-of-living crisis, ultimately there have been limits on their capacity and appetite to drop hundreds of pounds on the latest set of must-have trainers.
‘Fashion is typically cyclical and the athleisure trend, which saw people wear the same clothing for trips to the gym, socialising and relaxing at home, may be starting to sputter having sustained momentum at JD for some time.’
Supporting the FTSE 100, utility shares traded higher. National Grid rose 3.7%, British Gas owner Centrica climbed 1.7%, while water utilities Severn Trent and United Utilities added 2.1% and 1.3%.
Elsewhere in London, AIM-listed Corcel plunged 39%. The exploration and production said drilling and well testing work at the KON-11 asset in Angola have been suspended.
‘While initial results in Angola have not allowed immediate reactivation of the Tobias Field as originally hoped, the block partners are undertaking a detailed review of how to best utilise and exploit the two wells recently completed and further develop the full potential of the block. The company and its block partners believe KON-11 continues to offer significant developmental potential and that these early testing results are by no means a definitive outcome,’ Executive Chair Antoine Karam commented.
Brent oil was quoted at $81.30 a barrel late in London on Friday afternoon, down from $82.83 late Thursday. Gold was quoted at $2,328.36 an ounce, down against $2,342.54.
Monday’s economic calendar has a slew of manufacturing purchasing managers’ index data including from China and Japan overnight, the eurozone at 0900 BST, the UK at 0930 and US reading at 1445 and 1500.
The local corporate diary has earnings from ten-pin bowling firm Hollywood Bowl Group.
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