The FTSE 100 has navigated a potentially precarious week of inflation data and interest rate decisions and has come out stronger, though only by small margins.
Dramatic swings in US stocks throughout the week didn’t translate into much in the way of volatility for the FTSE 100, which was 0.5% higher going into the weekend.
“The FTSE 100 ticked higher on Friday, putting the index on course for a solid if unspectacular week of gains,” said AJ Bell investment director, Russ Mould.
September has traditionally been a choppy week for stocks, so the fairly flat performance of the month so far is encouraging. However, investors will be gearing up for a potentially bumpier ride for UK stocks next week when the Bank of England and Federal Reserve will decide on interest rates.
The big question will be how much the Federal Reserve cuts by. They have indicated they will cut rates, but whether that is by 25bps or 50bps will be the overriding factor influencing equities.
A 25bps cut will signal the Fed is happy with the state of the economy, while a 50bps cut would suggest they see weakness and have ramifications for stocks.
In terms of individual movers on Friday, Endeavour Mining and Fresnillo were again at the top of the leaderboard as investors reacted to gold breaking to fresh record highs.
“Precious metals miners led the way as gold reached new heights, while bargain hunters seemingly took advantage of the recent sell-offs at Burberry and Rentokil,” Russ Mould said.
Burberry is set to leave the FTSE 100 later in September after being demoted. Sainsbury’s was the top faller, slipping 2%.