FTSE 100 closes higher, supported by surging Tesco shares after Marmitegate
The FTSE 100 closed higher on Friday, supported by Tesco shares which surged to the top of the index after the supermarket claimed victory in the "Marmitegate" stand-off with Unilever.
The UK's top-tier stock market closed higher by 0.5% or 35.8 points at 7013.6 points, after temporarily dipping below the 7,000 point mark to 6977.7 earlier in the session.
Meanwhile, the pound was down 0.5% against the US dollar at 1.218, but was relatively flat versus the euro at 1.108.
Global stocks were relatively bouyant after US banks including JP Morgan and Citigroup beat earnings forecasts, and fears over the health of the Chinese economy eased following a strong inflation update.
Tesco led the charge on the FTSE 100, closing 4.4% or 8.6p higher at 203.7 points, after announcing that the head-to-head battle with Unilever was "successfully resolved".
It comes after the grocery giant was left grappling with a shortage of store cupboard staples - Marmite, Pot Noodle and Persil - after reportedly refusing to bow to Unilever's demands for a 10% price hike amid a drop in sterling.
Jasper Lawler, a market analyst at CMC Markets said: "It seems that in the war that has erupted between supermarkets and their suppliers because of the weaker pound, Tesco has won its first battle."
The pound was on a roller coaster ride throughout the day, affected by fresh Brexit comments, worse-than-expected UK construction figures, and suggestions that UK interest rates would stay lower for longer.
Sterling was digesting comments from European Council president Donald Tusk, who said a "hard Brexit" - which would see Britain leave the bloc's single market in exchange for immigration controls - was the country's only option.
His comments were compounded by French finance minister Michel Sapin, who said US banks told him that they would shift some activities out of Britain to other financial centres across Europe following the Brexit vote.
Meanwhile, activity in Britain's construction industry unexpectedly fell 1.5% in August, as an infrastructure slowdown added further pain to the struggling sector in the wake of the EU referendum.
The UK currency then made gains after Bank of England governor Mark Carney said the Bank was paying attention to sterling moves, and suggested he would let inflation rise "a bit" above the Bank's 2% target in a bid to get employment and growth back on track.
Across Europe, the French Cac 40 and German Dax closed higher, up 1.5% and 1.6%, respectively.
In oil markets, Brent was down 0.4% at 51.75 US dollars as the market digested news that US crude inventories rose for the first time in six weeks, and lost enthusiasm over a tentative Opec production freeze.
In UK stocks, shares in hedge fund firm Man Group topped the FTSE 250, closing 13.8% or 15p higher at 123.7p after reporting stronger-than-expected investor inflows.
The firm said net inflows hit 1.3 billion US dollars (£1.1 billion) in the three months to the end of September, above forecasts of around 500 million US dollars (£410 million).
The biggest risers on the FTSE 100 were Tesco up 8.6p at 203.7p, Mediclinic up 29p to 914.5p, Informa up 16p at 663.5p, and Marks and Spencer up 7.8p at 327p.
The biggest losers on the FTSE 100 were Antofagasta down 19.5p at 520p, Randgold Resources down 2230p to 6800p, Fresnillo down 46p to 1620p, and Ashtead Group down 32p at 1315p.