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The FTSE 100 ended a tumultuous week on a sour note on Friday, closing slightly lower despite a string of encouraging economic data as retail sales, consumer confidence and business activity picked up.
The FTSE 100 closed down 6.61 points, or 0.1%, at 10,143.44 points.
The FTSE 250 index closed down 53.40 points, or 0.2%, at 23,317.53 points. Purpose The stock closed up 5.08 points, or 0.6%, at 822.75 points.
For the week, the FTSE 100 fell 0.9%, the FTSE 250 was flat and the AIM-All Share index rose 2.5%.
exist LondonEconomic data took center stage after UK retail sales unexpectedly rose in December.
The Office for National Statistics said retail sales rose 0.4% in December after falling 0.1% in November, better than forecasts for a 0.1% decline cited by FXStreet.
November’s 0.1% fall was not revised, while the ONS revised October’s decline upward to a 0.8% decline from the previous 0.9% drop.
In addition, survey results on Friday showed that UK consumer confidence improved slightly in January, supported by stronger personal financial expectations for the next 12 months.
total score GFK Consumer confidence rose to minus 16 points in January from minus 17 points in December, in line with FXStreet’s consensus forecast.
Flash data released by S&P Global showed that UK services and manufacturing accelerated growth in January, following three pieces of good news.
The UK PMI rose to a 21-month high of 53.9 points in January from 51.4 points in December, easily beating the consensus of 51.7 cited by FXStreet.
The composite data is calculated using a weighted average of services and manufacturing readings.
Flash memory service business purchasing managers index January improved to 54.3 points from 51.4 points in December, better than the market consensus of 51.7 points.
The preliminary manufacturing PMI value in January climbed to 51.6 points from 50.6 points in December, hitting a 17-month high.
“As the new year begins, we see encouraging signs for the UK economy,” said Deutsche Bank chief economist Sanjay Raja.
He added that “the revision makes the UK outlook brighter”, with retail spending “picking up”, survey data starting in 2026 being “stronger” and the labor market showing some “tepid” signs of stabilization.
JPMorgan analyst Allen Monks pointed out that January’s spike in PMI may typically be associated with annualized GDP growth of 1.9%.
But he added a warning. “The main issue is that this level has not been sustained for more than a month and that must be taken into account when interpreting the UK survey,” he said.
“There was a similar surge in UK surveys in August, but then a sharp reversal. So it’s hard to have much confidence in UK surveys until they continue to move higher,” Mr Monks added.
But he said that despite caution about PMI data, retail sales and consumer confidence data “supported the growth outlook.”
Solid data also supports GBP.
At the close of trading in London on Thursday, the pound was quoted at $1.3567, up from $1.3437 on Wednesday.
Megan Greene, a member of the Monetary Policy Committee, said that loose monetary policy in the United States could push up inflation, which further boosted the pound.
“I think this will be more of a concern about the risk of persistent inflation in the UK than the risk of weak demand, leading to a slow withdrawal of monetary policy restrictions in the UK,” she said.
The Fed meets next week but is expected to keep rates on hold after three consecutive quarters of cuts.
Contrary to Ms. Green’s concerns, analysts at Wells Fargo expect the Fed to cut interest rates by 25 basis points twice at its March and June meetings, but said “risks to our forecast appear increasingly tilted toward less easing later this year or potentially less.”
“Indeed, given our view of how growth will evolve this year, there’s a reasonable argument that the longer they wait for cuts, the greater the hurdle will be to justify further easing from an economic perspective.”
The euro was trading higher at $1.1758 and higher at $1.1707.
The dollar was trading at 157.99 yen, down from 158.18 yen.
In European stock markets on Friday, the Paris CAC 40 index closed down 0.1%, and the Frankfurt DAX 40 index closed up 0.2%.
Financial markets were mixed in New York at the close in London.
The Dow Jones Industrial Average fell 0.5%, the S&P 500 rose 0.2% and the Nasdaq Composite gained 0.6%.
The U.S. 10-year Treasury note yield was at 4.25%, down from 4.27% on Thursday. The U.S. 30-year Treasury bond yield was at 4.84%, narrowing from 4.87%.
On the FTSE 100, gold miners Fresnillo rose 2.1% and Endeavor Mining rose 2.2%, regaining favor as gold and silver prices closed higher.
Gold was quoted at $4,984.07 an ounce on Friday, down from $4,874.8 on Thursday after hitting a new high and approaching $5,000 an ounce.
Meanwhile, silver prices rose 4.8% late Friday, surpassing $100 an ounce.
David Morrison, senior market analyst at Trade Nation, said: “Concerns about U.S. public finances, political pressure on the Federal Reserve, and lingering global risks have made gold perform well on dips. Despite short-term overbought signals, gold prices are poised for strong weekly gains, with price action suggesting pullbacks are viewed as opportunities rather than trend breakouts. This is a high-risk trading environment.”
As for silver, Morrison said it continues to perform well in “the most extraordinary ways.”
“This does appear to be a market at its peak, with supply shortages and a massive short squeeze creating new buying impetus.
“There’s a lot of (fear of missing out) in the market, which has the potential to push prices even higher. But of course, the longer this rally goes on, the greater the risk of weakness. Silver looks like it’s peaked here.”
Demand from oil majors BP and Shell rose 1.6% and 0.5% respectively as oil prices rose after the Financial Times reported that the United States threatened to restrict cash supplies for Iraqi oil sales.
Brent crude settled higher at $65.76 a barrel on Friday, up from $64.26 late Thursday.
Insurer Aviva fell 5.2%, while industry peer Admiral extended losses, falling 5.8% on Friday, taking its weekly loss to 13%.
Goldman Sachs and RBC Capital Markets downgraded Admiral earlier this week.
Elsewhere, C&C shares fell 9.3% as tepid consumer confidence amid UK budget constraints led to weak trading in the run-up to Christmas.
Mecca Bingo owner Rank fell 4.7% and William Hill owner Evoke fell 2.5%, with Deutsche Bank changing its rating on both companies from “buy” to “hold” after taking into account tax changes for the gambling industry in the November budget.
The biggest gainers on the FTSE 100 were Beazley, up 36.0p to 1,152.0p; Glencore, up 10.85p to 501.0p; Endeavor Mining, up 92.0p to 4,366.0p; and BAE Systems, up 42.0p to 2,027.0p. Pennies; Fresnillo, rose 84.0 pence to 2,027.0 pence. 4,168.0p.
The biggest decliners on the FTSE 100 were Burberry Group, down 79.0 pence, to 1,195.5 pence; Admiral Group, down 162.0 pence to 2,650.0 pence; Aviva, down 33.8 pence to 619.4 pence; easyJet, down 14.80 pence. Pence, at 481.9 pence; IAG, down 12.0 pence, at 2,650.0 pence. 418.3p.
Monday’s global economic calendar includes Germany’s Ifo business sentiment report and U.S. durable goods orders data. Later this week, the U.S. and Canada will make interest rate decisions.
Next week’s UK corporate calendar will feature lenders’ full-year results Lloyds Banking Group Plus transaction statements from accounting software provider Sage and miner Antofagasta.
– Contributed by Alliance News.