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FTSE 100 surges as strong US data boosts sentiment

The FTSE 100 was heading into the weekend on a firmer footing as the index surged with most industry sectors participating in a broad rally.

The FTSE 100 was 1.25% higher at the time of writing.

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This week has again demonstrated London’s leading index is swayed more by events happening overseas than in the UK, and even Europe.

Reports of Chinese stimulus this week fired up the FTSE 100’s miners on Thursday, which provided a base for a further rally on Friday driven by investors picking out favourites offering relative value.

The source of optimism on Friday was positive US economic data which dispelled fears of a damaging slowdown in the world’s biggest economy. 

“The big names of the UK stock market have been lifted higher in the final trading session of the week. Stocks have been given a boost from better-than-expected economic data in the US yesterday,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.

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“Our friends across the pond are seeing economic growth outstrip expectations, while also enjoying the fact that inflation pressures are reducing, according to the personal consumption expenditures index.”

FTSE 100 stalwarts and multinational consumer companies were ahead of the pack in early trade and maintained their strength as the session progressed. Heavyweights AstraZeneca, Shell, HSBC and Unilever were all up over 1% and added a substantial number of points to the index.

Unloved Diageo was the top riser on Friday, gaining as much as 4%. The drinks company’s shares have been at the bottom of the bottle since announcing slowing sales in Latin America and the Caribbean, but today showed there was still interest in the stock.

“Diageo bounced back after a torrid spell on the market as investors took comfort from LVMH’s results, as well as some green shoots in Remy Cointreau’s results, that the luxury sector isn’t completely broken,” said Russ Mould, investment director at AJ Bell.

Improving sentiment around the luxury sector helped Burberry add 3%. Croda was up around 4% and had been the top riser earlier in the session.

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