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FTSE 100 shrugs off inflation fears to trade above 7,125 for first time in a month

While the rest of Europe took a nap, the FTSE 100 continued to ascend on Friday morning despite some mixed data coming from the UK.

The FTSE 100 is now trading above 7,125 for the first time in a month and is around 40-50 points away from the then-14 and a half-month peak struck in early May.

“Most of the big figures underperformed. Industrial production for April contracted by 1.3%, against the 1.2% expansion forecast and the 1.8% managed in March. The slowdown in manufacturing production wasn’t quite as severe, but even then, it came in at -0.3%, well off both the 1.5% estimate and March’s 2.1%,” said Connor Campbell, financial analyst at Spreadex.

The monthly GDP reading for the three months to the end of April was slightly more promising, rising from 2.1% to 2.3%, though it did fall short of the 2.4% forecast.

“Yet neither the pound nor FTSE 100 seemed bothered by these misses. Sterling was unchanged against the dollar and down just 0.1% against the euro, while the index climbed 0.6% thanks to its miners,” Campbell added.

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Looking to this afternoon and the Dow Jones is heading for another static start, with the futures suggesting an unchanged open just under 34,500.

“Investors may have been nervous ahead of yesterday’s US inflation numbers but despite consumer prices rising at their fastest rate since 2008, and more than economists expected, shares were up,” according to AJ Bell investment director Russ Mould.

“Perhaps central banks really have convinced the markets that any rise in inflation will be short-lived and will not force them to ramp up rates too rapidly.

FTSE 100 Top Movers

Halma (2.76%), along with mining companies, Fresnillo (2.38%) and Glencore (2.27%), headed up the FTSE 100 during the morning session on Friday.

Trailing at the back of the pack are Just Eat (-2.36%), Ashtead (-1.78%) and BT (-1.18%).

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