The FTSE 100 jumped in value by the closing bell on Friday, finishing the week on a positive note as investors hedged their hopes on future interest rate cuts from the US Federal Reserve,
Meanwhile, US producer price inflation data came in hotter than expected.
The FTSE 100 index closed up 114.18 points, 1.5%, at 7,711.71. The FTSE 250 ended up 92.31 points, 0.5%, at 19,191.93, and the AIM All-Share closed up 5.80 points, 0.8%, at 758.78.
Over the week, they were up 1.8%, up 0.7%, and up 1.5%, respectively.
The Cboe UK 100 ended up 1.5% at 771.67, the Cboe UK 250 closed up 0.5% at 16,602.32, and the Cboe Small Companies ended down 0.6% at 14,492.52.
In European equities on Friday, the CAC 40 in Paris ended up 0.3%, while the DAX 40 in Frankfurt ended up 0.4%.
US producer prices rose sharper than expected in January, the US Bureau of Labor Statistics reported on Friday.
The US producer price index for final demand edged up 0.3% monthly in January, swinging from a contraction of 0.1% in December, and surpassing the growth of 0.2% that was cited by the FXStreet-cited consensus.
Annually, US producer prices grew 0.9% in January, decelerating from an increase of 1.0% in December, but overshooting the FXStreet-cited consensus of 0.6%.
On Tuesday this week, US consumer prices cooled but at a slower pace than expected last month, with monthly consumer price growth also topping expectations.
According to the Bureau of Labor Statistics, the nation’s consumer price inflation rate eased to 3.1% in January, from 3.4% in December. It had been expected to ebb to 2.9%, according to FXStreet cited consensus, so the latest reading topped expectations.
On a monthly basis, consumer prices increased 0.3% in January from December. In December, they had risen 0.2% from November. According to FXStreet, economists had pencilled in another 0.2% rise last month.
James Reilly at Capital Economics said ‘the reaction to US inflation data looks misguided to us – we think the Fed is focused on PCE inflation, which looks on track to hit 2% by May.
‘As investors come around to our view and price Fed rate cuts back in, we think the dollar will hand back some of its recent strength. That said, we don’t expect the Fed to cut rates until May; so, a turnaround in investors’ rate expectations might not be imminent,’ Reilly added.
Stocks in New York were mixed at the London equities close, with the DJIA and the Nasdaq Composite were both down 0.1%, whilst the S&P 500 index was up 0.1%.
The pound was quoted at $1.2582 at the London equities close Friday, up slightly compared to $1.2581 at the close on Thursday. The euro stood at $1.0775 at the European equities close Friday, higher against $1.0759 at the same time on Thursday. Against the yen, the dollar was trading at JP¥150.13, higher compared to JP¥150.11 late Thursday.
In the FTSE 100, NatWest surged 7.1% to the top of the index.
Pretax profit in 2023 totalled £6.18 billion, a rise of 20% from £5.13 billion in 2022 and topping company-compiled consensus of £5.97 billion. Total income rose 12% to £14.75 billion from £13.16 billion, beating consensus of £14.61 billion.
NatWest declared a final dividend of 11.5 pence, up 15% from 10.0p. Its total dividend for the year amounted to 17.0p, an increase of 26%. It also plans a £300 million share buyback programme this year.
The lender also confirmed interim boss Paul Thwaite as permanent chief executive. Thwaite took on the job in an interim basis last year after Alison Rose resigned from the role in July. The scandal concerning the closure of the Brexit-backing politician Nigel Farage’s Coutts account culminated in Rose’s resignation at the time.
Miners Antofagasta and Anglo American Platinum on Friday highlighted their strides toward environmental responsibility. Antofagasta up 5.7% and Anglo American, which owns 80% of Anglo American Platinum, rose 3.0%.
Antofagasta, a London listing that mines copper and gold in Chile, said its board has approved new greenhouse gas emissions targets, having met its previous target ahead of schedule back in 2022.
Meanwhile, Anglo American Platinum said its Mototolo and Amandelbult mines in South Africa were assessed against the Initiative for Responsible Mining Assurance’s mining standard for the first time, gaining IRMA 75 and IRMA 50 scores, respectively. AmPlats said its pair are the first two platinum mines in South Africa to submit to an IRMA audit.
At the same time, its Unki mine in Zimbabwe retained a IRMA 75 score, having been first assessed at that level in 2021.
In the FTSE 250, Close Brothers lost 3.0%.
Berenberg slashed its price target but maintained a ’buy’ rating on Close Brothers shares, but warned that the regulatory backdrop may be getting too hot to handle for investors in merchant bank.
‘UK regulators’ stance towards large parts of Close Brothers’ business has become inhospitable,’ Berenberg said.
Among London’s small-caps, XP Power plunged 36%, after the manufacturer of power controllers, warned its 2024 outturn will be ‘significantly below market expectations’. The Singapore-based firm said there will be a ‘shortfall in revenue’ this year.
‘This is based on recent order intake, revenue performance and discussions with customers, particularly within the Healthcare and Industrial Technology sectors, which confirm unusual, temporarily soft demand conditions and destocking. These softer trends have also emerged within our direct industry peers,’ XP Power said.
Brent oil was quoted at $82.88 a barrel at the London equities close Friday, up from $82.66 late Thursday.
Gold was quoted at $2,009.01 an ounce at the London equities close Friday, higher against $1,999.98 at the close on Thursday.
In Monday’s UK corporate calendar, there are full year results from MoneySupermarket.com. There are also half year results from Transense Technologies and Wilmington.
Markets in New York will be closed on Monday, to celebrate Washington’s birthday.
On Tuesday, there is an interest rate decision from China.
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