Markets in London rallied on Friday, extending gains off the back of a bad week for sterling and following Asia higher.
The FTSE (^FTSE) had finished around 2% higher on Thursday, and ticked up 0.7% by the afternoon on Friday. Thursday's rally was the biggest since November last year.
On Thursday, the European Central Bank (ECB) raised the three key interest rates by 25 basis points — a move that was expected among traders and tracks other major economies. Rates in Europe are now at the highest level since the euro was launched in 1999.
Meanwhile, the pound (GBPUSD=X) skirted around the $1.24 mark. Sterling being weak typically makes stocks listed in London more attractive to foreign buyers with relatively stronger currencies.
European markets had caught the good mood from China, following a surge in the price of iron ore as well as data from the retail and industrial sectors indicating an end to growth worries that have lingered in recent weeks.
"While the numbers today are pleasing from the perspective of risk-appetite, investors will probably want to see a trend of better data start to develop before being lured back into Chinese assets with any conviction," said Tim Waterer, chief market analyst at KCM Trade.
US markets opened lower with the S&P 500 (^GSPC) pulling back 0.9%, the Dow (^DJI) down 0.6% and the Nasdaq (^IXIC) declining 1.3% by late-morning. Stocks were weighed down by consumer sentiment readings and high oil and US import prices stoking worries about inflation.
Meanwhile the dollar strengthened.
“The US dollar continues to appreciate and is on track for its ninth straight weekly gain ahead of next week's rate decisions by the Fed, BoE and BoJ," said Axel Rudolph, senior market analyst at IG.
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An explanation from IG for the sour mood in US markets:
“Unlike their European counterparts, which added to yesterday's strong post ECB gains, US indices end the week under pressure. The high oil price and US import prices which rise the most in over a year reignite inflationary worries. Coupled with a three-month low in the University of Michigan consumer sentiment, US car maker strikes and $4tn of simultaneous expiration of stock indices, index futures and options, all weigh on US markets ahead of next week's eagerly awaited FOMC."
Tata Steel: Potential job loss fears grow at Port Talbot
Concerns over job losses continue to loom for Tata Steel, as the UK government steps in with a £500m deal to secure the future of Britain's biggest steelworkers.
Around 3,000 employees are at risk of losing their job at the Port Talbot plant in Wales, as the producers transition to provide greener ways of steel-making.
The long-waited aid package from the UK government is worth around £500m to help the Indian-owned company switch from blast furnaces to environmentally friendly, zero-carbon electricity to reduce pollution.
A further £700m will be invested from the company itself. But the transition may still lead to huge job losses even with the government's financial support.
From our reporter Zuhur Jabir Umran.
Movers and shakers in the FTSE
As of 10.10am, here are the top gainers in the FTSE 100
Flutter ⬆️ 3%
Burberry ⬆️ 2.7%
B&M European Value Retail ⬆️ 2.3%
And the stocks at the bottom:
M&G ⬇️ 0.6%
Land Securities Group ⬇️ 0.5%
Unite Group ⬇️ 0.4%
Company insolvencies on the up
Bleak news for a Friday, but the economy has been having a weird one lately. Figures just released by the Insolvency Service show a 19% increase in companies going bust year-on-year, with 2,308 firms in England and Wales collapsing in August.
The number of CVLs (or when a company is voluntarily liquidated) drove the increase.
Overnight in the US an Asia
The mood across major indices around the world was mixed overnight, despite data from China indicating the economy was back on track for growth. Industrial production, retail sales and unemployment figures improved, however the property market slump appears to be weighing on investors' minds.
In Japan the Nikkei (^N225) rose 1.1%.
Good morning! It's finally cooling down in London (the temperature... not the stocks) and we're gearing up for a Friday that's light on planned data releases but nevertheless promises to be interesting.