17th Jan 2025 16:53
(Alliance News) - London's FTSE 100 surged to a record high on Friday, turbocharged by a tepid pound, which struggled after poor UK data.
The FTSE 100 index jumped 113.32 points, 1.4%, at 8,505.22. It had earlier reached a new intra-day high of 8,533.43.
The FTSE 250 ended 69.72 points higher, 0.3%, at 20,597.42, and the AIM All-Share advanced 1.76 points, 0.3%, at 719.07.
For the week, the FTSE 100 added 3.1%, the FTSE 250 advanced 4.4% and the AIM All-Share rose 0.8%.
The Cboe UK 100 ended up 1.5% at 852.69 on Friday, the Cboe UK 250 climbed 0.6% at 17,974.26, and the Cboe Small Companies jumped 2.1% at 15,723.22.
In European equities on Friday, the CAC 40 in Paris ended 1.0% higher, while the DAX 40 in Frankfurt shot up 1.2%.
The DAX 40 also hit a record high. The CAC 40 is shy of its best level, achieved in May, making up lost ground after political uncertainty kept a lid on the index towards the end of last year.
The pound was quoted lower at USD1.2189 at late on Friday in London, compared to USD1.2241 at the equities close on Thursday. The euro eased to USD1.0292 on Friday against USD1.0305 at the time of the European market close Thursday. Against the yen, the dollar was trading higher at JPY156.34 compared to JPY155.19.
"The recent decline in the British pound against the US dollar reflects numerous economic challenges facing the UK, amid disappointing economic data and growing concerns about future economic performance," XS.com analyst Rania Gule commented.
"On the other hand, the US economy appears more stable. December's retail sales figures, though showing a slight decline compared to the previous month, were relatively acceptable. Core retail sales rising by 0.4% reflects strong consumer spending, supporting expectations that the US economy can withstand challenges. However, the sector's slower growth indicates that the Federal Reserve may remain cautious in its future monetary policy decisions. In my view, the disparity between the UK and US economic performance puts the pound at a clear disadvantage against the dollar. With confidence in the British economy continuing to wane, investors appear to favour the US dollar as a haven. This shift in investor sentiment increases pressure on the pound and bolsters expectations for further declines unless the UK's economic data show significant improvement."
According to the Office for National Statistics, UK retail sales volumes decreased 0.3% month-on-month in December, worsening from 0.1% growth in November and falling far short of the FXStreet-cited market consensus of 0.4% growth.
While the data hurt the pound, international earners on the FTSE 100 climbed. Brewer Diageo added 2.4%, while insurer Prudential climbed 4.9%.
UK economic growth is set to accelerate this year after it missed forecasts in 2024, the International Monetary Fund has said.
The IMF said UK gross domestic product, GDP, is on track to grow by 1.6% in 2025, edging up from the 1.5% it predicted in October last year.
The improved growth prospects will provide a boost for under-pressure Chancellor Rachel Reeves, who has witnessed a turbulent start to the year for London's financial markets.
Gold was quoted lower at USD2,715.22 an ounce late in London on Friday against USD2,719.78 on Thursday. Brent oil was quoted higher at USD80.05 a barrel from USD79.90 late Thursday.
Fresnillo tracked bullion lower, falling 2.1%. The gold miner was among the handful of large-cap names to decline in London on Friday.
Elsewhere, shares in McBride jumped 23% as it pledged to reinstate annual dividends in response to strong trading and securing long-term financing.
The private label products maker for the domestic household and professional cleaning and hygiene markets estimates that adjusted operating profit in the six months that ended December 31 was up 8% from a year prior, on a constant currency basis.
Full year adjusted operating profit is expected to be in line with internal expectations, the company added.
DFS Furniture shares recovered from early weakness to end higher. It cautioned on weaker sofa demand and increased costs due to higher national insurance contributions for employers in the UK.
The Doncaster, England-based furniture retailer expects to report adjusted underlying pretax profit of GBP16 million to GBP17 million in the first financial half ended December 29, up sharply from GBP8.7 million a year prior.
The company highlighted its cautious view on market demand in the second half due to the UK's economic performance after the budget announced by Chancellor Reeves last year.
Still, the stock rose 5.1%.
In New York on Friday, the Dow Jones Industrial Average was up 1.1%, the S&P 500 climbed 1.2% and the Nasdaq Composite surged 1.6%.
Chinese President Xi Jinping said Friday he hopes for a "good start" to relations with the US in a phone call with president-elect Donald Trump, state media reported.
"We both attach great importance to mutual interaction (and) hope that China-US relations will have a good start in the new term of the US president", Xi said according to CCTV.
Trump on Friday vowed that he and Chinese President Xi Jinping would build a strong relationship after they spoke by telephone, days before the incoming US president takes power.
"The call was a very good one for both China and the USA," Trump said on his social media platform. "It is my expectation that we will solve many problems together, and starting immediately. We discussed balancing Trade, Fentanyl, TikTok, and many other subjects."
"President Xi and I will do everything possible to make the World more peaceful and safe!" he added.
Monday's economic calendar has a Chinese interest rate decision overnight. Financial markets in New York are closed on Monday for Martin Luther King Jr Day.
By Eric Cunha, Alliance News news editor
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