FTSE 100 close: A stable end to a miserable week
London’s FTSE 100 showed tentative signs of recovery on Friday, after a turbulent week that saw numbers from the Office for National Statistics reveal far higher levels of inflation, all but sealing further interest rate hikes.
The blue-chip index started higher before settling in flat, and then closing at 7,627, up 0.74 per cent, helping to end a sell-off this week.
Optimism that a resolution to the US debt ceiling crisis was near underscored much of the day, even prompting a late rally at the end.
However, it was the mining sector that drove early morning recovery as shares in Rio Tinto, Glencore and Anglo American were all up.
Pharmaceutical giant AstraZeneca was also a key factor in bumping up the index, after announcing positive results from a late-stage trial of two cancer treatment drugs.
Retail sales also saw a boost from the Easter holidays, with an unexpected rise of 0.5 per cent over April – although this failed to help shares in other retailers such as Mike Ashley’s Frasers Group, Kingfisher and B&Q, who are struggling with lower sales volumes.
On the losing side was British Airways owner IAG, who saw shares fall following a technical glitch at BA yesterday that has resulted in the cancellation more than 175 flights.
The rise in gilt yields over the past week also weighed down on home construction groups Persimmon, Taylor Wimpey and Barratt Developments, as consumers faced the potential for higher mortgage costs when refinancing.
Vodafone saw the biggest drop, continuing its downturn following the announcement last week that it plans to cut 11,000 jobs.
Michael Hewson, chief market analyst at CMC Markets UK, said: “The FTSE100 has seen a modest recovery from levels last seen on the 29th March, with the main gainers being in basic resources, on the back of a rebound in commodity prices.”
“Today’s more positive mood appears to be being driven by some optimism that we might see the framework of a debt ceiling deal starting to unfold, with more details expected to emerge over the weekend, as we zero in on next week’s 1 June deadline.”
He added: “The sectors that have been hit the hardest this week have been those that are likely to be the most susceptible to a recession or at the very least stagflation, with weakness in house builders, as well as general retailers. These are still underperforming today, even though the FTSE100 is seeing a modest rebound.”
The FTSE 250 saw a slight dip throughout the day.
Asos shares were under the spotlight, after the retailer announced an £80m fundraise from its shareholders. Shares were up 2.74 per cent as of 8:46am, before tumbling down to -2.22 per cent by 11:50am, and -2.89 per cent as of 5pm.
Cybersecurity group Darktrace had a torrid day, seeing shares spiral to -8 per cent early on. This downward trajectory continued throughout the afternoon, with the company hitting as low as -12.2 per cent at 3pm.
Other fallers included hardware firm Videndum, who were down 2.37 per cent late afternoon, and the footwear company Dr Martens, down 3.97 per cent.