FTSE 100 and sterling end week on front foot
London’s top flight index ended the day up 0.31%, or 23.57 points, at 7701.77.
The FTSE 100 ended the week on the front foot as a political breakthrough in Italy helped markets look through the continued threat of a global trade war.
London’s top flight index ended the day up 0.31%, or 23.57 points, at 7701.77 after Italy’s president asked law professor Giuseppe Conte to be the premier and head the country’s first populist government.
The news ended days of uncertainty over the fate of the eurozone’s third largest economy, bolstering stocks across the continent.
France’s Cac 40 and Germany’s Dax closed up 1.24% and 0.95% respectively.
A trade war triggered by Donald Trump’s decision to slap tariffs on steel and aluminium imports tipped markets into negative territory on Thursday, even as countries around the world announced retaliatory measures.
But stocks regained their poise on Friday.
“The (FTSE 100) index enjoyed strong gains on Friday morning despite the threat of a trade war between the US and several of its trading partners after a breakthrough overnight on the political deadlock in Italy,” said AJ Bell investment director Russ Mould.
The pound, meanwhile, enjoyed a boost after output in Britain’s manufacturing sector nudged up in May.
The Markit/CIPS UK Manufacturing purchasing managers’ index (PMI) showed a reading of 54.4 last month, higher than the 53.9 for April.
Economists were expecting a figure of 53.5 and sterling was up 0.5% to 1.33 US dollars and up 0.6% to 1.14 euro off the back of the news.
Lee McDarby, of Moneycorp, said: “We’d expect an impact on the pound in the immediate term.
“Just a month ago disappointing manufacturing growth saw the pound dip so these better-than-expected results may lead to a strengthening in the pound.
“But with Brexit negotiations set to ramp up in June any uplift may be short-lived.”
The price of Brent crude slipped 1.24% to 76 US dollars per barrel.
In stocks, shares in funeral firm Dignity collapsed after the competition watchdog and Government said they would launch separate reviews into the £2 billion funeral market.
Dignity stock was down 165p at 1,050p.
Mothercare shares ended the day in positive territory after the retailer was given the green light from creditors to swing the axe on 50 under-performing stores as part of a major restructuring.
Shares ended the day up 0.2p to 31p.
The biggest risers on the FTSE 100 were Johnson Matthey up 142p at 3,655p, Anglo American up 49.2p at 1,846.4p, Barratt Developments up 13.8p to 559.4p and Glencore up 9.25p to 381.3p.
The biggest fallers on the FTSE 100 were NMC Health down 112p at 3,412p, Royal Mail down 12.8p at 496.2, Diageo down 46.5p at 2,716p and Shire down 65p to 4,035p.