14th Mar 2025 12:14
(Alliance News) - A softer pound and stimulus hopes in China gave blue-chips a lift on Friday despite weak UK economic growth figures.
The FTSE 100 index traded up 59.66 points, 0.7%, at 8,600.72. The FTSE 250 was up 175.56 points, 0.9%, at 19,863.93, and the AIM All-Share was up 5.86 points, 0.9%, at 685.32.
The Cboe UK 100 was up 0.7% at 859.45, the Cboe UK 250 was up 1.0% at 17,326.55, and the Cboe Small Companies rose 0.4% at 15,423.57.
Asian markets shrugged off renewed US weakness, boosted by Beijing’s plan for a news conference Monday to detail steps to boost consumption.
AJ Bell investment director Russ Mould said while "Wall Street entered official correction territory overnight, Asian stocks shrugged off this weakness as Chinese authorities introduced measures aimed at boosting consumer spending."
"This helped give the mining sector in London a lift as investors looked for a knock-on impact on metals demand in a commodity-hungry economy," he added.
Anglo American rose 3.6%, Rio Tinto gained 2.4% and Glencore advanced 2.6%.
Gold miner Endeavour Mining climbed 1.9% as the gold price surpassed USD3,000 on Friday morning for the first time before easing slightly.
The yellow metal traded at USD2,997.14 an ounce at Friday lunchtime, up from USD2,982.53 at the time of the London equity close on Thursday.
It earlier hit USD3,004.94 fuelled by ongoing uncertainty surrounding the Trump administration's policies and increasing investor interest in so-called "safe-haven" assets.
The pound faded to USD1.2938 early Friday afternoon, from USD1.2957 at the time of the London equities close on Thursday. The euro rose to USD1.0895 from USD1.0874. Against the yen, the dollar firmed to JPY148.76 from JPY147.65.
The fall in sterling followed weak UK economic growth figures for January.
The Office for National Statistics said UK gross domestic product shrank by 0.1% in January from December, confounding FXStreet-cited market expectations of a 0.1% rise. In December, the UK economy had grown 0.4% from November.
The ONS said the decline was "mainly caused by a fall in the production sector".
"Monthly services output grew by 0.1% in January 2025, following growth of 0.4% in December 2024, and grew by 0.4% in the three months to January 2025," the statistics agency explained.
"Production output fell by 0.9% in January 2025, following growth of 0.5% in December 2024, and fell by 0.9% in the three months to January 2025," it added.
Kathleen Brooks at XTB said: "The UK economy is flatlining at best, and this report does not consider the market turmoil since President Trump entered the White House."
"Industrial and manufacturing production data was extremely weak at the start of this year. This was driven by a notable fall in oil and gas extraction, and construction continued to have a weak few months. The service sector was the one 'bright' spot, after a strong month for retail, especially food and drink sales as people stayed in and ate at home, according to the ONS."
In Europe, the CAC 40 rose 1.1% in Paris, while the DAX 40 in Frankfurt jumped 1.7%.
Luxury goods brand Kering dived 9.4% in Paris after Gucci named Balenciaga's Demna Gvasalia as its new artistic director.
The label's former design chief Sabato De Sarno left in February.
RBC said: "Demna's appointment may come as a surprise as investor expectations anticipated an external, higher profile designer which this appointment does not seem to deliver."
"We appreciate Demna's success at Balenciaga, however worry this appointment at Gucci is not enough to underpin what is required in terms of signalling to consumers and investors."
"We believe the market was looking for an external 'heavyweight' candidate, who could lead and influence with fresh perspective and ideas in order to re-ignite brand momentum at Gucci."
In New York, the Dow Jones Industrial Average is called up 0.6%, the S&P 500 is seen 0.9% higher and and the Nasdaq Composite up 1.1%.
On the FTSE 100, Reckitt Benckiser fell 5.0%.
Jefferies said the fall seems related to a decision overnight by a judge to seek a retrial of last year's Whitfield versus Abbot Laboratories and Mead Johnson case in which a jury found in favour of the defendants (Abbot and Reckitt's Mead Johnson).
Mead Johnson is Reckitt's baby formula business with its flagship product being Enfamil.
The litigation relates to ongoing plaintiff's allegations regarding premature babies contracting necrotizing enterocolitis after consuming infant formula.
Jefferies called it a "market risk perception setback", noting Reckitt will appeal, which will take up to 18 months and any re-trial is likely to be around 2-years away.
But RBC said while it is easy to dismiss this as "noise", seeing the jury’s verdict overturned is "the removal of a positive", which feels "similarly significant" as the original positive verdict.
RBC assumes GBP2 billion all-in liability in relation to the NEC claims for Reckitt, compared to market expectations in the range of GBP1 billion to GBP5 billion.
Jefferies pointed out a key decision on this litigation is due in April, when a federal judge rules on the science credibility.
In London, Berkeley Group rose 2.1%. It said it has seen a continued modest improvement in sales reservations for new homes as it reiterated profit guidance for the next two years.
It said it expects to deliver pretax profit of at least GBP525 million in financial 2025 and GBP450 million in financial 2026. This will be down from GBP557.3 million in the financial year that ended April 30 last year, which itself was down by 7.7% from financial 2023.
Berkeley said enquiries are at a consistently good level, and it has seen the modest improvement in sales reservations noted at the time of the interim results continue.
Sales rates are ahead of those achieved last year, the company added.
But the housebuilder cautioned that for this improvement to continue and sales rates to return closer to the levels of three years ago, there needs to be greater confidence in the trajectory of interest rate reductions and wider economic stability.
On the FTSE 250, Bodycote plunged 7.7% as it delivered a cautious outlook alongside reporting a drop in sales and profit in 2024.
The supplier of heat treatments and specialist thermal processing services said conditions for its Automotive and Industrial divisions are "challenging" with end markets "mixed", while there continues to be a temporary impact from industry-wide supply chain disruption in Aerospace & Defence.
"Reflecting this backdrop, current run-rate profit performance is at a broadly similar level to [the second half of 2024]," Bodycote said.
RBC Capital Markets analyst Mark Fielding said the guidance implies up to mid-single-digit percentage consensus downside "if there is no improvement in end markets".
Vanquis Banking Group fell 8.2% after disclosing a GBP71.2 million goodwill write-off at its Moneybarn vehicle finance offering, coupled with a 15% increase in impairment charges to GBP191.0 million from GBP165.5 million.
As a result, the Bradford, England-based lender reported a significant widening of its pretax loss in 2024 to GBP136.3 million from GBP12.0 million the prior year.
The lender scrapped the dividend after a total dividend of 6.0p per share in 2023.
A barrel of Brent rose to USD70.29 midday Friday, from USD70.13 at the time of the London equities close on Thursday.
Still to come, the University of Michigan consumer sentiment index at 1400 GMT.
By Jeremy Cutler, Alliance News reporter
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