The FTSE 100 and European stocks finished lower this Friday as investors eyed US inflation data and the latest policy announcement from the Federal Reserve next week.
Richard Hunter, head of markets at Interactive Investor said: "Investors in the UK were non-committal at the open, with marginal gains coming through as a nod to the reasonable sessions seen in the US and Asia."
Shares in Croda (CRDA.L) tumbled 13% after the firm forecast full-year 2023 pre-tax profit would be between £370m ($464m) and £400m which could be around 50% lower than the £780m the chemicals company made in 2022.
The East Yorkshire-based company, which last year generated sales of £2bn, fell 702p to its lowest level in three years at 5250p.
UK oil producers such as Harbour Energy (HBR.L), Serica Energy (SQZ.L) and EnQuest (ENQ.L) rose as chancellor Jeremy Hunt announced plans to limit the windfall tax being applied to UK oil and gas companies.
The Energy Profits Levy will now run until 28 March, keeping the 75% levy on North seal oil and gas production “while oil and gas prices remain higher than historic norms”. But it will fall to 40% “when prices consistently return to normal levels for a sustained period,” set at $71.40 per barrel for oil and £0.54 per therm for gas, for two consecutive quarters.
Payment services firm Network International (NETW.L) is poised to quit the London markets, after its board backed a takeover offer from Canadian private equity firm Brookfield Asset Management. Shares were up by over 5%.
Brookfield has agreed to buy FTSE 250 (^FTMC) company in a £2.2bn deal. Card processor Network International only listed in London in 2019. It said the takeover offer was “fair and reasonable”.
Michael Hewson chief market analyst at CMC Markets UK commented: “The FTSE100 has spent all this week trading either side of the 7,600 level, albeit with a slightly negative bias and on course for its third successive weekly decline.”
US and Asia
US stocks were mixed on Friday as investors digested a pairing between two of the largest American automakers and prepared for the Federal Reserve's next decision on rate hikes.
The S&P 500 finished Thursday's trading sessions up more than 20% from its October 2022 lows, officially marking the start of a bull market. The stock rally to start 2023 comes as strong economic data continues to outweigh incessant recession fears.
"I do believe that the worst is behind us," BMO Capital Markets chief investment strategist Brian Belski, who recently boosted his S&P year-end price target from 4,300 to 4,550, told Yahoo Finance Live.
"The Fed, maybe, has one more interest rate increase between now and the end of the year, and that's OK, but I think most of that has been already priced into the market."
A key focus for next week will be the US Federal Reserve’s policy meeting on 13 and 14 June, especially after jobless claims increased more than expected to their highest since October 2021.
In Asia, markets rose to their highest level since mid-February on Friday, taking cues from the overnight Wall Street rally.
Investors digested China’s consumer price index, which saw a 0.2% rise in May and its producer prices that fell 4.6% year on year, marking the steepest drop since May 2016.
The pound (GBPUSD=X) rose against the dollar, with sterling trading at $1.2576.
Sterling (GBPEUR=X) was flat against the euro, trading at €1.1644.
Meanwhile, Brent crude (BZ=F) lost ground, trading at around $76 per barrel amid demand concerns and scepticism that the United States and Iran could strike a nuclear deal.
"Oil prices are expected to stay in a range of about 3 dollars above and below $70 for WTI in the near term," Satoru Yoshida, a commodity analyst with Rakuten Securities.