31st Jul 2026 12:07
(Alliance News) - European equities moved higher on Friday, ending the week strongly, as a tech rally in the US and Asia overnight improved risk sentiment.
The FTSE 100 index rose 48.30 points, 0.4%, at 10,945.57 on Friday afternoon, after earlier hitting its best ever level of 10,989.45, not far off 11,000 points.
The FTSE 250 added 95.07 points, 0.4%, at 24,174.21, and the AIM all-share added 2.84 points, 0.4%, at 767.74.
The Cboe UK 100 rose 0.6% at 1,088.05, the Cboe UK 250 climbed 0.2% at 20,997.03, and the Cboe small companies was fractionally lower at 18,680.81.
In Paris, the CAC 40 was up 0.9%. The DAX 40 in Frankfurt rose 0.8%.
"The rebound in tech powered by Microsoft's extremely well-received numbers has helped lift the broader market mood, helping investors to put concerns about the Iran conflict and its continuing impact on ice for now," AJ Bell analyst Russ Mould commented.
After surging on Thursday, stocks in New York are set to extend gains. The Dow Jones Industrial Average is called up 0.6%, the S&P 500 0.5% higher and the Nasdaq Composite up 1.2%.
Sterling rose to USD1.3448 early Friday afternoon, from USD1.3439 at the time of the previous London equities close. Against the euro, it rose to EUR1.1687 from EUR1.1671. The euro faded to USD1.1503 from USD1.1516. Against the yen, the dollar rose to JPY159.96 from JPY159.44.
The Bank of Japan held rates on Friday, with all eyes on the yen after suspicions of currency intervention on Thursday.
"Previous interventions have provided temporary relief, but the yen has often resumed its decline once the immediate support faded. This highlights the limits of direct intervention when broader macroeconomic and interest-rate fundamentals remain unfavourable," Validus Risk Management's Harun Thilak commented.
"While Japanese authorities retain tools to manage excessive volatility, a sustained recovery in the yen is likely to depend on a narrowing of the interest-rate differential between Japan and the US, stronger domestic growth and greater confidence in Japan's fiscal outlook. The BoJ's next steps will therefore be critical in determining the yen's near-term direction, with implications extending beyond Japan to global currency markets, international trade and investor risk management."
The yield on the 10-year US Treasury was steady at 4.67%, where it stood at the time of the London equities close on Thursday. The 30-year yield was unmoved at 5.21%.
The longer-dated 30-year yield was at 5.17% this time last week. But it spiked to as high as around 5.25% on Thursday, in the aftermath of Wednesday's Federal Reserve decision.
SPI Asset Management analyst Stephen Innes commented: "The market appears willing to believe that Kevin Warsh may delay tightening, but it is considerably less convinced that the Federal Reserve has restored control over inflation expectations.
"Lower short-term yields support technology valuations and weaken the dollar, while elevated long-term yields continue to tighten financial conditions through mortgages, corporate funding and equity discount rates. The bond market may eventually do enough heavy lifting to keep the Fed on hold, but it will not do so gently."
A barrel of Brent eased to USD89.38 midday Friday, from USD89.84 late Thursday. Gold traded at USD4,056.56 an ounce, down from USD4,099.23.
In London, NatWest shares rose 5.5%. It raised its guidance for 2026 and said it will consider a new share buyback at its annual results, six months earlier than planned, after profit and income beat expectations in the second quarter.
Pretax profit in the three months to June 30 rose 29% to GBP2.29 billion from GBP1.77 billion a year prior, as total income improved 13% to GBP4.50 billion from GBP4.01 billion. Pretax profit topped the GBP2.04 billion company-compiled market consensus, while total income beat the GBP4.40 billion forecast.
"The consistency of our performance, coupled with the completion of our Evelyn Partners acquisition, has given us the confidence to strengthen our guidance for 2026," Chief Executive Paul Thwaite commented.
The lender now expects annual total income excluding notable items to be around GBP17.9 billion in 2026, including around GBP275 million relating to Evelyn Partners. It previously expected total income at the top end of a GBP17.2 billion to GBP17.6 billion range.
In addition, it "will consider share-buybacks from full year 2026, six months earlier than previously planned". It previously expected its next share buyback announcement to be at its half-year results in 2027.
A decent week for the mining sector has helped the FTSE 100 hit record highs. Anglo American was among the best performers on Friday, up 3.1%.
IG Group fell 11%, the worst FTSE 100 performer. The London-based online trading platform's total revenue for the first six months of 2026 increased 18% to GBP642.8 million from GBP545.2 million a year prior, it said after the market close on Thursday. Pretax profit fell 6.8% to GBP227.7 million from GBP244.3 million.
In addition, it agreed to acquire US fantasy sports and prediction markets operator Underdog for around USD1.3 billion.
Greggs was the worst FTSE 250 performer, falling 6.1%. RBC cut the baker to 'sector perform' from 'outperform'. It threatens to snap a five-day winning streak for the stock, which included an 18% surge on Wednesday.
Elsewhere in London, NARF Industries shed 15%. A contract in NARF's Government Research & Development arm has been cancelled "following the customer's decision to pursue an alternative technical approach", the cybersecurity firm said in its annual results.
"Additionally, geopolitical tensions, including the conflict involving Iran, place increasing demands on limited government resources and budget priorities," it explained.
By Eric Cunha, Alliance News news editor
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