FTSE ticks up but still ends the week down 1.1%
Strong Chinese industrial output helped attract hopeful investors to UK-listed miners on Friday but overall it was still a weak week
Following the European banking sector’s rebound on Thursday, another higher close was sealed on Friday on the back of strong economic data from both China and the US.
The FTSE 100 index briefly regained the 5,300-point resistance level in Friday deals before easing off intraday highs to settle at 5,261.6, up 17.2 points or 0.3%. The FTSE 250 index put in a similar performance, rising 0.7% or 59.6 points to close at 9,018.2.
Market sentiment received a boost from China’s strong industrial production—up a higher-than-expected 19.2% in November—and North America’s retail and consumer confidence figures. US retail sales grew by 1.3% in November, while the Reuters/University of Michigan index climbed to 73.4 in December, according to the month’s preliminary reading.
Here in the UK, producer prices ticked up 0.2% between October and November, in line with economist expectations, leading to the fastest annual pace in nine months of 2.9%.
On the equity front, with hopes of strong Chinese demand fuelling commodity prices, miners Vedanta Resources, Fresnillo and Kazakhmys featured on the blue-chip leaderboard, up 3.2%, 3.0% and 2.2%, respectively. Rio Tinto was also in demand, 1.3% firmer, after appointing a new chief negotiator to take up price talks with Asian steelmakers.
Oil producers had also been higher mid-session but with the crude price slipping back below $70 per barrel, index heavyweight Royal Dutch Shell led the sector lower with a 0.3% slide despite an announcement that the Anglo-Dutch firm headed up a consortium that has won rights to develop Iraq’s Majnoon oilfield, which holds around 15% of the nation’s oil reserves.
Banks also weighed after Thursday’s brief rebound, with Lloyds Banking Group the main FTSE 100 casualty, down 3.4%, followed by Royal Bank of Scotland, HSBC and Barclays, each of which shed 1.0%-2.5%.
Returning to the upside, WPP, Thomas Cook Group and TUI Travel, Burberry and BSkyB all continued to attract buyers following recent upbeat broker notes. WPP was the top-performing blue-chip on Friday with a gain of 4.0%, while the two travel operators were in demand following comments from Thomas Cook that it is on the look out for acquisitions in Germany.
Looking ahead to next week, trading volumes are likely to become increasingly light in the run up to Christmas, with next week’s triple-witching—when stock, option and futures expire—spelling high volatility.
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