The FTSE 100 made modest gains on Friday as investors continued to digest the implications of yesterday’s Bank of England assessment of the UK economy.
The FTSE 100 was 0.2% higher at the time of writing, while the more Uk-centric FTSE 250 slipped 0.3%.
Markets were also assessing fractional UK growth in the first quarter and the potential impact on consumers and company earnings in the coming months. UK GDP unexpectedly contracted 0.3% in March.
“Let’s be clear, whilst the Bank of England may believe the UK economy will now avoid the predicted recession entirely, the country is not in good health,” said Danni Hewson, head of financial analysis at AJ Bell.
“Rising prices, rising interest rates and strike action have created a cocktail that’s pretty unpalatable.
“Sluggish is the term that’s been used to describe the 0.1% growth the economy managed to eke out over the first three months of year, but for businesses and the cash strapped consumer such listless forward momentum will probably feel a lot like no momentum at all.”
Despite slow growth and ongoing economic worries, the Bank of England looks set to hike rates again before considering a pause.
Beazley
Beazley was a standout performer on Friday after reporting a 12% increase in gross premiums in the first quarter. Net premiums rose 24% to $1,069m.
“At a time of sticky inflation, investors will always be on the look-out for companies that have the sort of pricing power that helps them to defend, or even boost, profits, and non-life insurer Beazley’s first-quarter update unveils an average increase in premium rates on renewals of some 10%,” said AJ Bell investment director Russ Mould.
Beazley shares were 3% higher at the time of writing.
Housebuilder upgrades
Housebuilders enjoyed price target upgrades from analysts at Berenberg on Friday. Taylor Wimpey’s target was increased to 122p from 111p, Berkeley Group’s increased to 5,100p from 4,500p and Barratt Developments 552p from 440p.
The three housebuilders were up between 0.8%-1.3% at the time of writing.
Airtel Africa was the FTSE 100 top riser, gaining 3.3%, bouncing after a pummeling yesterday.
Ocado shares were 2.4% weaker on Friday as the premium retailer again suffered due to disappointing UK data. Ocado has suffered during the cost-of-living crisis as shoppers tighten their belts.
