Stocks moved into the green on Friday morning in London as the UK mourned the death of Queen Elizabeth II, with the pound also on the front foot, while the euro was getting a boost following a historic rate hike from the European Central Bank.
The FTSE 100 index was up 75.55 points, or 1.0%, at 7,337.61 early Friday. The mid-cap FTSE 250 index was up 164.07 points, or 0.9%, at 19,043.39. The AIM All-Share index was up 3.69 points, or 0.4%, at 873.05.
The Cboe UK 100 index was up 1.0% at 733.04. The Cboe 250 was up 0.8% at 16,382.21 and the Cboe Small Companies up 1.0% at 12,869.20.
The UK was on Friday mourning the death of the Queen.
The London Stock Exchange said it will be open as normal on Friday. It added that it will recognise any public and bank holidays of England and Wales. The Queen's state funeral is expected to take place on Monday, September 19 at Westminster Abbey in central London.
The Bank of England said that current banknotes, featuring a portrait of the Queen, will continue to be legal tender. A further announcement regarding banknotes will be made once the period of mourning has been observed following the Queen's death, it said.
The pound was quoted at $1.1625 early Friday, up sharply from $1.1498 at the London equities close on Thursday.
The ECB unveiled its largest-ever interest rate rise on Thursday, as it attempts to corral surging costs around the continent, but President Christine Lagarde was quick to say that such a rise will not become normal.
The Frankfurt-based central bank upped its key interest rates by 75 basis points, as it ‘frontloads’ its fight against surging inflation and soaring energy bills. The hike was the largest in since the euro's launch in 1999.
In mainland Europe on Friday, the CAC 40 index in Paris was up 0.5% and the DAX 40 in Frankfurt was up 0.6%.
‘Raising the rates into a slowing economy, combined with food and energy crisis looming on the continent, and without even talking about how the strong US dollar overcomplicates things, it will be hard to avoid recession in Europe,’ commented Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
EU finance ministers will on Friday scrutinize different measures taken by the bloc's member states to reduce skyrocketing electricity prices and tackle record inflation. If energy ministers agree on how to tackle rising electricity prices on a European level, the European Commission could put forward a legislative proposal as early as next week.
The euro traded at $1.0090 early Friday, higher than $0.9996 late Thursday.
‘EUR-USD price action after a hawkish ECB session yesterday proved very underwhelming. Short-dated yields moved in the euro's favour, but to no avail for the currency,’ commented Chris Turner of ING bank.
The euro has traded at either side of parity after the ECB hike.
In Asia on Friday, the Japanese Nikkei 225 stock index closed up 0.5% at 28,214.75. Against the yen, the dollar was quoted at JP¥142.24, down from JP¥144.00.
In Sydney, the S&P/ASX 200 stock index closed up 0.7%.
In China, the Shanghai Composite index ended 0.9% higher at 3,263.33, while the Hang Seng index in Hong Kong was up 2.7% at 19,360.35 in late trading.
China's consumer price inflation eased to 2.5% in August from 2.7% in July, data showed. Expectations, according to FXStreet, were for the annual inflation rate to tick up to 2.8%.
Miners on the FTSE 100 reacted positively to the news, with Anglo American, Antofagasta, and Glencore up 4.8%, 4.7%, and 4.0% respectively.
The UK Competition & Markets Authority provisionally cleared London Stock Exchange's acquisition of Quantile, following a phase two inquiry.
The CMA concluded that the deal ‘does not raise substantial competition concerns in the UK’.
Quantile is a firm that helps financial institutions trading in derivative instruments to reduce their capital requirements. The CMA had been concerned the acquisition by the stock exchange operator could ‘potentially disadvantage third party compression providers’, leading to reduced competition.
Shares in LSEG were down 0.2% in early morning trade.
Asos rose 2.2%. The online fashion retailer reported that it expects its full-year sales, adjusted pretax profit, and net debt to be within market forecasts.
This is despite sales in August being weaker than expected, due to a slow start to the autumn-winter shopping season as customers faced belt-tightening, the firm explained.
Asos noted company-complied consensus for the financial year ended August 31 shows total sales growth at 3.2% and adjusted profit at £28 million.
In financial 2021, Asos reported revenue of £3.91 billion and adjusted pretax profit of £193.6 million.
The London-based retailer's financial year ended on August 31.
Computacenter was down 3.7% as it reported falling profit in the first half.
The IT services firm said it faced a tough comparator, which it blamed on ‘materially altered’ IT equipment spending during the pandemic.
Pretax profit in the six months to June 30 fell 6.4% to £107.8 million from £115.2 million a year ago. Computacenter pinned the drop on higher amortisation costs for past acquisitions and a difficult comparator from the year before.
‘The impact of Covid-19 and the more recent supply shortages for IT equipment materially altered customer buying behaviours in 2020 and 2021, including the split of sales volumes between the first and second halves of the year. In 2021 an abnormally high percentage of our full-year profits came in the first half of the year, which means we have a more challenging comparison for the first half of 2022 than for the second half,’ it explained.
Darktrace reversed Thursday's steep losses in early morning trade Friday to rise 6.7% after closing down 34%. On Thursday, the cybersecurity firm had announced that private equity firm Thoma Bravo will not move ahead with a takeover offer.
Brent oil was trading at $89.81 a barrel, up from $88.57 late Thursday.
Gold was quoted at $1,726.65 an ounce early Friday, up from $1,707.91 on late Thursday.
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