The FTSE 100 looked passed dismal UK economic forecasts from the OBR and stormed to the highest intraday levels since since September on Friday.
Just a day after Jeremy Hunt unveiled depressing tax increases and spending cuts, markets looked forward to brighter times and economic conditions that avoid the worst forecasts for growth.
The rally was broad with only a handful of the FTSE 100’s constituents trading in negative territory at the time of writing.
“Following a slight pullback on Wall Street last night and in Asia on Friday, European stocks bucked the trend to trade higher on the last trading day of the week,” says Russ Mould, investment director at AJ Bell.
“After yesterday’s Autumn Statement-driven fall the pound managed to claw back some of its losses versus the US dollar as investors had time to digest the information and the new economic outlook for the UK.”
Legal & General were 3.9% higher and the FTSE 100’s top gainer after the life insurance and financial services company reaffirmed their full year guidance.
Peers Aviva, Admiral Group and Phoenix Group were also rising on L&G’s good news.
A strong session from the FTSE 100’s commodity companies also provided the index with support on hopes demand destruction may not be as bad as previously thought.
“Legal & General topped the list of FTSE 100 risers after it gave a reassuring trading update. Commodity producers were in demand, extending a recent rally for the mining and oil sectors as investors hope the global economic slowdown won’t be as bad as previously feared,” said Russ Mould.
UK Banks
Investors may have noticed a stealthy rally in UK banks in recent weeks and today saw the trend continue. Lloyds shares crept up another 2% on Friday morning and are now down only 5% on the year. Barclays added 1%, but are still down 15% in 2022.
Ocado shares were gaining after a bout of profit taking. Th online retailer’s shares had staged a 100% rally from their October lows.