FTSE 100 outperforms Europe on buoyant corporate earnings

The FTSE 100 was outperforming European indices on Friday as a raft of encouraging updates from London-listed companies helped lift the index.

The FTSE 100 was 0.3% higher at the time of writing as the French CAC and Spanish IBEX traded in the red. The German DAX was marginally higher.

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Positive updates from Prudential, Pearson and Smurfit Kappa took the stocks to the top of the FTSE 100 performance table and helped lift the overall index.

Poor US GDP data and talk of stagflation failed to take the wind out of UK equities and a strong start to the US session boosted stocks in afternoon trade.

Yesterday, US GDP came in lower than expected – but markets will be looking forward to next week’s Federal Reserve interest rate decision for the next major macroeconomic catalyst.

Inflation remains elevated and warrants further hikes. However, higher borrowing costs could put additional pressure on an economy showing signs of slowing.


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NatWest started Friday deep in the red after failing to increase guidance for the rest of 2023 and showed some signs of stress during banking turbulence in March. NatWest is the only FTSE 100 bank so far to reveal a fall in customer deposits since the start of the year.

“A drop in customer deposits, while nothing like on the scale seen at other crisis-ridden banks, has helped put the wind up investors in NatWest,” said AJ Bell investment director Russ Mould.

“The gap between the amount NatWest charges for loans compared to what it pays out for deposits, also known as the net interest margin, is also tighter than many had hoped.

“This runs counter to Barclays’ own first quarter numbers which showed higher base interest rates were feeding into a strong net interest margin.”

NatWest shares were down 3% at the time of writing but had been significantly lower earlier in the session. Barclays and Lloyds were both down around 1% in sympathy with NatWest’s drop. Lloyds are due to report next week.

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