The FTSE 100 reversed early losses on Friday as investors shrugged off strikes in the Middle East and disappointing UK economic data.
London’s leading index was up 0.3% at the time of writing.
Ongoing fears about oil and UK growth hit markets early on Friday, but the index rallied 100 points off the lows as the session progressed.
“Worries about how the UK economy will withstand the energy crisis have ratcheted up after a highly disappointing report card showed growth stalled in January,” said Susannah Streeter, chief investment strategist, Wealth Club.
“The Office for National Statistics painted a picture of stagnation for the UK, with the mighty services sector flatlining and production contracting, with the construction sector only just eking out growth.
“It doesn’t bode well for the resilience of companies ahead, faced with escalating energy prices which are likely to see many businesses battening down the hatches, putting investment plans on hold while hoping the storm subsides. Stagflation is stalking the UK economy, with inflation set to rise while stagnation settles in, with risks increasing that the economy could go into reverse.”
Although the FTSE 100 was down on Friday, the declines were relatively contained, suggesting an element of complacency given the risk to inflation from the conflict, which shows no signs of ending.
There were mixed fortunes for commodities firms, as higher oil prices supported BP and Shell, while a declining gold price hit Fresnillo, down 2%.
Berkeley Group was among the fallers after releasing a mixed trading update.
“Berkeley reaffirmed its £450m pre-tax profit guidance for the current year and FY27, alongside a target of around £300m in net cash, signalling confidence in its balance sheet despite a challenging backdrop,” said Mark Crouch, market analyst for eToro
“The broader market, however, remains fragile. Geopolitical tensions and macro-economic uncertainty have shaken consumer confidence, although Berkeley notes that sales enquiries remain solid and reservation levels are beginning to recover.”
Berkeley shares were down 3% at the time of writing.
‘Safer’ names, including Imperial Brands and Tesco, provided some balance to losses elsewhere with gains in the region of 1%.