London opened positively on a half-day pre-Christmas trading session Friday, despite a negative lead from the US and Asia.
A stronger-than-expected estimate of US economic growth on Thursday has increased worries that interest rates will be high for longer.
The FTSE 100 index opened up 13.26 points, 0.2% at 7,482.54 on Friday. The FTSE 250 was up 9.20 points at 18,771.27, and the AIM All-Share was up 1.88 points, 0.2%, at 828.06.
The Cboe UK 100 was up 0.2% at 748.06, the Cboe UK 250 was up 0.2% at 16,233.83, and the Cboe Small Companies was down 0.2% at 12,971.55.
The London Stock Exchange will close early at 1230 GMT on Friday for the festive period. It will be closed on Monday and Tuesday, before reopening on Wednesday.
‘S&P 500 futures are see-sawing, European bourses are higher, and Asia’s benchmarks are sliding. This tells me there is more Christmas housekeeping going on than anything fundamentally or meaningful, especially with 10-year US bond yields trading flat,’ said SPI Asset Management’s Stephen Innes.
Wall Street ended lower on Thursday after a revised GDP print showed the US economy grew faster than previously thought in the third quarter, fuelling fears of stubbornly high interest rates.
Gross domestic product grew by 3.2% in the third quarter on a year before, the revised figures showed. This was an increase from the previous estimate of 2.9% growth.
The Dow Jones Industrial Average closed down 1.1%, the S&P 500 down 1.5% and the Nasdaq Composite down 2.2%. The indices were called to open up 0.2%, 0.1% and flat, respectively, on Friday.
Meanwhile, the dollar was mixed against major currencies.
Sterling was quoted at $1.2070 early Friday, firm on $1.2028 at the London equities close on Thursday. The euro traded at $1.0623, higher than $1.0599. Against the yen, however, the dollar was quoted at JP¥132.60, up versus JP¥132.32.
In European equities on Friday, the CAC 40 in Paris was down 0.1%, while the DAX 40 in Frankfurt was a fraction higher.
Gold was quoted at $1,794.98 an ounce early Friday, down from $1,796.92 late on Thursday.
Brent oil fetched at $81.67 a barrel, lower than $82.69. But the price remains elevated. At the London market close last Friday, it was quoted at $78.82.
‘Oil is headed for a sizeable weekly gain on China’s fast-tracked policy pivots and on threats, idle or not, that Russia might cut crude production in response to the price cap imposed by G7,’ said SPI’s Innes said.
Russian Deputy Prime Minister Alexander Novak on Friday said that Russia may reduce oil production by 5% to 7% early next year, in comments reported by Reuters.
Meanwhile in the FTSE 100, retailers Next and JD Sports were up 1.1% and 0.8%, on hopes for strong Christmas sales.
However, the UK is currently beset by industrial action, with rail strikes likely to discourage footfall for bricks and mortar retailers and strikes against Royal Mail to disrupt online shopping.
‘Although UK consumer confidence is still close to record lows, and we forecast declines in UK discretionary income in 2023, we believe Next can thrive in these difficult times, given its multi-channel, multi-brand offer and its profit margin and cashflow discipline,’ commented Stifel retail analyst Caroline Gulliver.
Clothing retailer Superdry returned some of Thursday’s gains, losing 4.9% in early trade. The stock closed up 16% on Thursday as it reported its interim revenue had grown by 3.6% year-on-year thanks to a strong performance in its stores.
In the FTSE 250, Royal Mail-parent International Distributions Services was up 0.8%. However, the stock has lost 25% in the past six months.
Automotive distributor Inchcape edged 0.6% lower, as it said all conditions have been met for its acquisition of Derco.
This follows support from shareholders last week and approval from Peruvian authorities on Thursday. It expects completion to take place before the end of the year.
Inchcape first announced the proposed £1.3 billion acquisition of the Latin America automotive distributor back in July.
On AIM, MS International jumped 24%.
The defence equipment manufacturer signed a contract worth £22.4 million with an unnamed overseas customer for its land-based mobile gun systems.
It is the first contract for the MSI-DS Terrahawk Vshorad dual feed weapon systems, for mobile air defence.
MS International is aiming to fulfil the contract as soon as practicable, and expects to recognise the revenue at some point in 2023.
In Asia on Friday, the Japanese Nikkei 225 index closed down 1.0%. In China, the Shanghai Composite ended down 0.3%, while the Hang Seng index in Hong Kong fell 0.4%. The S&P/ASX 200 in Sydney closed down 0.6%.
By Elizabeth Winter, Alliance News senior markets reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2022 Alliance News Ltd. All Rights Reserved.
