The FTSE 100 managed a weekly gain, despite underperforming peers on Friday, while strong results from oil majors lifted the mood in New York, shaking off poor numbers from Amazon.
Central banks move into focus again next week. The Federal Reserve announces its rate decision on Wednesday, with the Bank of England following on Thursday.
The FTSE 100 index closed down 26.02 points, or 0.4% at 7,047.67 on Friday, but finished the week 1.1% higher.
The FTSE 250 ended down 165.25 points, or 0.9%, at 17,916.67 - closing the week up 4.1%. The AIM All-Share closed down 4.09 points, or 0.5%, at 805.37, finishing 2.7% higher over the past five days
The Cboe UK 100 ended down 0.5% at 703.81, the Cboe UK 250 closed down 1.0% at 15,378.84, and the Cboe Small Companies ended down 0.5% at 12,320.39.
The pound was quoted at $1.1595 at the London equities close Friday, up slightly from $1.1573 at the close on Thursday. Though sterling’s marked rise tempered slightly on Friday, the currency has gained 3.2% over the past week.
Markets have so far taken confidence from the new UK Prime Minister Rishi Sunak.
In the FTSE 100, Centrica added 5.2% after it announced the reopening of the Rough natural gas storage facility off the east coast of England.
Centrica, which owns British Gas, said the facility is operational for winter. The facility increases the UK’s storage capacity by 50% despite it operating at just 20% of its previous capacity.
GSK closed up 2.3% after it said its majority owned ViiV Healthcare venture has received the European Medicines Agency’s validation for its marketing authorisation application for HIV prevention and said its MAA for respiratory syncytial virus adult vaccine has also been accepted.
NatWest was the worst performer. It plunged 8.3% as it reported strong income growth in the third quarter, boosted by both increased lending and higher interest rates, but the bank warned it is keeping a close on eye on any change in behaviour from its customers.
In the three months to September 30, operating profit before tax rose to £1.09 billion from £976 million a year before.
Putting a cap on the bank’s profit, NatWest set aside £247 million in the quarter to cover an expected increase in bad loans, which is reversed from a £221 million gain the year prior.
Lloyds fell 3.3% in negative read across.
Glencore fell 1.0% as it trimmed annual guidance for some of its commodities after a disappointing third-quarter performance dominated by supply chain disruptions in Kazakhstan, extreme weather in Australia, and strikes in Canada and Norway.
In the FTSE 250, ASOS tumbled 11%.
The stock was rocked by a Telegraph report which stated some hedge funds have shorted the stock, just days after retailer Frasers bought a stake.
Elsewhere in London, China-focused investment trusts fell.
JPMorgan China Growth & Income fell 2.9% and abrdn China Investment dropped 3.5%.
Investor sentiment turned sour as Chinese cities doubled down on Covid-19 lockdown restrictions.
Stocks in New York were firmly in the green at the London equities close, with the Dow Jones Industrial Average up 2.0%, the S&P 500 index up 1.7% and the Nasdaq Composite up 1.8%.
After disappointment from tech stocks, oil majors put some shine on this week’s US corporate earnings calendar.
Exxon Mobil revenue in the third quarter of 2022 jumped 52% to $112.07 billion from $73.79 billion a year prior. Attributable net income soared to $19.66 billion from $6.75 billion. The oil major’s bottom line rose 10% from $17.85 billion in the second quarter.
Chevron posted pretax earnings of $14.80 billion, up from $8.06 billion the year before. Revenue increased to $66.64 billion from $44.71 billion the year before.
Exxon shares rose 1.8%, while Chevron was up 0.3%. Amazon slid 10%, after its poor numbers overnight.
Wall Street also shook off a higher inflation reading for the US on Friday.
According to the Bureau of Economic Analysis, the Fed’s preferred inflationary measure, the core personal consumption expenditures index, which excludes food and energy, shot up 5.1% year-on-year in September, quickening from a 4.9% hike in August.
‘The Fed’s favoured measure of inflation is heading higher, rather than lower, while employment costs continue to rise at double the rate experienced over the past 15 years. The market is probably right to expect the Fed to slow the pace of rate hikes from December, but this is by no means guaranteed,’ analysts at ING commented.
On Thursday, the European Central Bank on Thursday lifted its benchmark interest rates by 75 basis points, as expected.
In European equities on Friday, the CAC 40 in Paris ended up 0.5%, while the DAX 40 in Frankfurt ended up 0.2%.
The euro stood at $0.9943 at the European equities close Friday, lower against $0.9984 at the same time on Thursday.
Against the yen, the dollar was trading at JP¥147.54 late Friday, higher compared to JP¥145.90 late Thursday.
Gold was quoted at $1,640.91 an ounce at the London equities close Friday, down sharply against $1,662.60 at the close on Thursday. The precious metal has an inverse relationship with the greenback, weakening as the dollar strengthens.
Brent oil was quoted at $93.34 a barrel at the London equities close Friday, down from $94.75 late Thursday.
In Monday’s UK corporate calendar, there are full year results from self storage company Lok’n Store and kidney disease-focused diagnostics firm Renalytix.
In the economic calendar, the EU will publish its latest GDP and CPI readings.
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