The FTSE 100 held firm on Friday as investors plotted their next move after an action-packed week of monetary policy.
London’s leading index was gently undulating between positive and negative in early trade on Friday.
Investors were also picking through the latest instalment of UK economic data. UK retail sales increased by 0.5% as GfK consumer confidence came in at -19, which was worse than economists’ expectations.
One wonders how dire the UK’s economic data needs to become before the government or central bank takes action to support the economy.
Although UK retail sales showed signs of positivity, consumer confidence took another kicking, largely due to concerns around the upcoming budget.
“UK markets opened a touch higher this morning, but the calm masks a tug-of-war in the data. UK shoppers delivered another surprise in August, with retail sales up 0.5% for the second month running, outpacing forecasts as sunny weather drove demand for clothes and food treats,” said Matt Britzman, senior equity analyst, Hargreaves Lansdown.
“But while tills were busy, the mood is anything but buoyant, with consumer confidence slipping to its lowest in three months, as looming tax hikes cast a long shadow. The disconnect is clear, with consumers happy to spend now, perhaps before the Chancellor comes calling in November, but sentiment on the economic outlook remains firmly in the red.”
Soggy economic data weighed on UK investor sentiment on Friday, with many holding off on taking positions despite the US closing at a record high again yesterday.
Having outperformed the S&P 500 during tariff volatility, the FTSE 100 is starting to slip back into its position as an income option as US stocks power to fresh highs.
US tech stocks led gains in the US overnight, with names such as Nvidia, Intel and a raft of quantum stocks powering higher.
The bullish session for US stocks overnight fed into the FTSE 100’s riskier sectors as miners gained on Friday. Antofagasta, Glencore and Anglo were again favoured by investors.
However, their strength was offset by the decline of housebuilders and retailers.
The London Stock Exchange Group was the top faller with losses of 2.8%.
Fresnillo and Endeavour Mining were the FTSE 100’s top risers as investors bought into the precious metals miners, with the gold price holding its own after central bank decisions this week.