A tricky week, and quarter, ended with a gain for European equities, though the FTSE 100 limped over the line on Friday, ending off session highs.
Share price falls for BP and Shell kept a lid on the FTSE 100, though JD Sports and Severn Trent shares rallied.
The FTSE 100 index rose 6.23 points, or 0.1%, at 7,608.08. The FTSE 250 ended up 180.74 points, or 1.0%, at 18,279.42, and the AIM All-Share added 1.20 points, or 0.2%, at 726.18.
For the week, the FTSE 100 fell 1.0%, the FTSE 250 and the AIM All-Share each gave back 1.8%.
The Cboe UK 100 rose 0.3% at 760.70, the Cboe UK 250 surged 1.6% at 16,025.79, and the Cboe Small Companies added 0.9% at 13,484.64.
In European equities on Friday, the CAC 40 in Paris added 0.3% and the DAX 40 in Frankfurt rose 0.4%.
Stocks in New York were on the up. The Dow Jones Industrial Average rose 0.3%, the S&P 500 added 0.6% and the Nasdaq Composite climbed 1.0%.
For the third-quarter alone, the FTSE 100 edged up 1.0%, having suffered a 1.3% fall in the second-quarter. Heading into the final three months of 2023, the blue-chip index is 2.1% higher than where it stood at the end of 2022.
The final week of the quarter was a tricky one for equities, hurt by the expectation that the US Federal Reserve will keep rates higher for longer, the threat of a US government shutdown, and property sector woes in China.
The Fed was back under the spotlight on Friday, following the release of a US inflation reading.
The Federal Reserve’s preferred US inflationary indicator faded back below the 4% threshold for the first time since September 2021, numbers on Friday showed.
According to the Bureau of Economic Analysis, the core personal consumption expenditures grew 3.9% on-year in August, fading from the 4.3% rise registered in July. The reading was in line with FXStreet cited consensus.
The core reading, the Fed’s preferred inflation gauge, does not include food or energy. The headline annual PCE index, which does, accelerated.
The headline PCE index rose 3.5% on-year last month, quickening slightly from a 3.4% increase in July. It is the third month in-a-row that year-on-year growth in personal consumption expenditures has quickened. The figure was in line with FXStreet cited expectations, however.
Analysts at ING commented: ‘The Fed’s favoured measure of inflation undershot expectations and has boosted the case for the Fed not hiking rates in the current quarter. But huge upward revisions to household savings suggests the consumer can remain more resilient than we thought likely and supports the case for the Fed keeping monetary policy tighter for longer.’
In the eurozone, meanwhile, consumer price inflation is expected to cool to 4.3% in September, from 5.2% in August, according to a flash estimate from Eurostat on Friday.
Core consumer prices - which exclude energy, food, alcohol and tobacco - are expected to rise 4.5% on an annual basis in September, slowing sharply from a 5.3% rise in August.
The euro stood at $1.0585 late Friday, higher against $1.0568 on Thursday. Against the yen, the dollar was trading at JP¥149.30, slightly lower compared to JP¥149.36.
The pound was quoted at $1.2207, largely flat from $1.2209 at the London equities close on Thursday.
According to a second estimate from the Office for National Statistics, UK gross domestic product increased 0.2% against the prior quarter in second quarter of 2023. This was unchanged from an earlier estimate.
Meanwhile, GDP in the first quarter of the year was upwardly revised to a quarter-on-quarter increase of 0.3%, from a previous estimate of a 0.1% increase.
In the FTSE 100, athleisure retailer JD Sports added 5.1%. JD Sports surged in a positive read-across after New York-listed sports apparel maker Nike reported a first-quarter revenue rise.
Nike was up 6.4% in New York.
Water utility Severn Trent added 4.9%. It proposed ‘record’ levels of investment in its new business plan for April 1, 2025 to March 31, 2030.
The water utility said the plan includes £12.9 billion total expenditure across its network, including £5.0 billion of investment focused on enhancing capacity and service beyond current levels.
Putting pressure on the FTSE 100, Shell and BP lost 1.8% and 1.5%, tracking oil prices lower.
Brent oil was quoted at $92.64 a barrel in London late on Friday afternoon, down from $94.09 at the London equities close on Thursday.
Future was the best FTSE 250 performer, adding 25%.
It said its adjusted operating profit in the year ended September 30 is expected to be in line with board expectations of £254.1 million.
The company owns names including Marie Claire, Country Life, Money Week said that audience numbers have stabilised in the second half of its financial year, noting positive month-on-month momentum in the final quarter.
However, Future said trading conditions overall remain ‘mixed’ with challenges in consumer spending and the digital advertising market.
Carnival declined 4.6% despite hailing ‘record revenue’ in its third-quarter. Revenue in the three months ended August 31 rose 59% to $6.85 billion from $4.31 billion a year earlier.
Carnival reported a net income of $1.07 billion, swinging from a loss of $770 million.
The cruise ship firm added: ‘Booking volumes during the third quarter continued at significantly elevated levels, setting a new third quarter record for total bookings during the quarter.’
Wealth manager Kingswood slumped 14% as it cut profit guidance.
Kingswood’s revenue in the half-year ended June 30 declined 22% to £80.4 million from £62.7 million and its pretax loss widened to £9.9 million from £1.7 million.
Kingswood cut its proforma operating profit guidance to £13.6 million from £14.7 million, due to lower than expected investment banking and capital markets activity.
Gold was quoted at $1,856.33 an ounce late Friday afternoon, lower against $1,861.02 late Thursday.
Monday’s economic calendar has a slew of purchasing managers’ index readings, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1445 BST.
The local corporate calendar has full-year results from flooring manufacturer James Halstead.
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