18th Nov 2022 16:58
(Alliance News) - Stock prices in London closed higher on Friday, but falling prices hit oil majors, keeping a lid on the FTSE 100's progress.
Lifting the blue-chip index was a strong share price rise for Legal & General, and gains for Frasers and JD Sports - on the back of well-received results from a New York-listed peer.
The FTSE 100 index ended 38.98 points higher, 0.5%, at 7,385.52 on Friday. The FTSE 250 climbed 160.74 points, 0.8%, at 19,283.05. The AIM All-Share ended up 3.32 points, 0.4%, at 838.25.
For the week, the FTSE 100 added 0.9%, though the FTSE 250 lost 1.7%. The AIM All-Share suffered a 1.9% loss this week.
The Cboe UK 100 ended 0.6% higher at 738.53. The Cboe UK 250 closed up 1.2% at 16,628.15, while the Cboe Small Companies fell 0.2% to 12,831.60.
Stocks on the continent closed higher. The CAC 40 index in Paris added 1.0%, while the DAX 40 in Frankfurt surged 1.2%.
In New York, the Dow Jones Industrial Average climbed 0.5%, the S&P 500 added 0.3%, but the Nasdaq Composite was marginally lower.
"Stocks are once again shrugging off warnings about high interest rates in the US, and it appears the normal seasonal tendency of equities to rally in Q4 has asserted itself once again. Indeed, the fact that Fed speakers continue to bang the hawkish drum, but to little apparent effect, might suggest that traders still have their hearts set on a risk-rally into the end of the year, even if that sets everyone up for a fall in January," IG analyst Chris Beauchamp commented.
Sterling strengthened against the dollar. The pound was quoted at USD1.1929 at the time of the London equities close on Friday, up sharply from USD1.1779 from Thursday.
The euro traded at USD1.0362, rising from USD1.0326 late Thursday. Against the yen, the dollar was quoted at JPY139.85, down from JPY140.61.
The pound's strength and the dollar's weakness reversed what was seen on Thursday, when sterling faltered after a UK fiscal policy announcement, and the greenback climbed on hawkish commentary from Federal Reserve policymakers.
"The pound survived the autumn statement, but downside risks persist in GBP/USD," analysts at ING commented.
"We continue to see downside risks for GBP/USD as the dollar may start to recover into year-end, and target sub-1.15 levels in the near term. However, we forecast some outperformance in EUR/GBP (primarily due to EUR weakness)."
In London, Legal & General added 3.1%, among the best FTSE 100 performers.
The insurer reiterated annual profit guidance, and said its pension risk transfer business continues to perform "strongly" with recent new-business wins.
In its year-to-date, the pension risk transfer business, Legal & General Retirement Institutional, has transacted or is in exclusive negotiations on GBP9.3 billion of global PRT business, exceeding the 2021 figure of GBP7.2 billion of global PRT secured.
Looking ahead, L&G said it expects to deliver operating profit growth for 2022 to be in line with the 8% delivered in the first half, with annual capital generation expected at GBP1.8 billion. In the first half, operating profit was GBP1.16 billion, up 7.4% from GBP1.08 billion the year before.
Frasers surged 5.9% and JD Sports climbed 4.3%. Athletic apparel retailer Foot Locker reported third-quarter results on Friday, to rave reviews in New York, boosting its London-listed peers in the process.
Foot Locker said sales and earnings were above expectations. It also lifted annual guidance ahead of the key Christmas and Black Friday trading periods.
Foot Locker was up 7.2% in New York.
Putting pressure on the FTSE 100, however, were share price falls for Shell and BP. The oil majors tracked Brent prices lower and fell 0.9% and 0.5%. Brent oil was trading at USD87.30 a barrel late Friday, down from USD90.02 on Thursday.
"Brent and Crude oil prices didn't have the best week; oil traders have been on the fence, and the ones who have been in the ring had a lot of nose bleed. The reason is that we had a lot of improvement in terms of geopolitical tensions, and this means that traders have felt less nervous about geopolitical tensions. The two biggest economic powers, China and the US have started to take steps in the right direction, de-escalating tensions. In addition, Russia had nothing to do about the missile in Poland. Most lawmakers believe it was unintentional, which is also positive news," Avatrade analyst Naeem Aslam commented.
"On the demand side, there are concerns about an economic slowdown. By that, we mean that the UK confirmed its economy is in a recession, and Chinese economic data has yet to paint the best or most optimistic picture this week. These factors have kept the oil prices in check, and the path of the least resistance seems skewed to the downside."
Back in London, Parsley Box jumped 70%, the best AIM performer, after the ready meals provider outlined plans to exit the junior market.
The Edinburgh-based, which markets its products to over 65s, only floated in March 2021, with a placing price of 200 pence per share.
At a general meeting next month, the delisting proposal needs 75% approval of votes cast by shareholders. Parsley Box said the delisting has received backing representing about 36% of the company's issued share capital.
Eco Atlantic tumbled 58%, among the worst AIM performers. The oil and gas explorer said that its Gazania-1 well had reached its target depth of 2,360 metres but did not show evidence of commercial hydrocarbons.
The well, which was spudded on October 10, will now be plugged and abandoned.
MJ Gleeson fell 5.1%. The housebuilder and land investor said over the past six weeks, Gleeson Homes cancellation rates increased to 41%, from 20% in the first ten weeks of the year.
"The market volatility and sharp increase in interest rates following the mini budget impacted buyer confidence and caused a significant slowdown in demand," the firm said.
However, Gleeson said it is "encouraged" by Thursday's autumn statement, and it expects buyer confidence to recover as the volatile macroeconomic backdrop calms down.
Gold was quoted at USD1,757.30 an ounce late Friday, down slightly from USD1,758.92 on Thursday.
Monday's economic calendar has an interest rate announcement from the People's Bank of China overnight, before producer price data from Germany at 0700 GMT.
The week picks up pace with a eurozone consumer confidence reading on Tuesday and a slew of flash PMIs from across the globe on Wednesday. Financial markets in New York are closed on Thursday for Thanksgiving. They re-open for a half day on Friday.
Monday's local corporate calendar has annual results from contract caterer Compass and specialised technical products and services provider Diploma.
By Eric Cunha; [email protected]
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