(Alliance News) – Stocks in London ended little changed on Friday, with blue chips edging lower after notching another record, as investors held fire ahead of the long weekend in the US.
“Investors have been kept on their toes year-to-date with non-stop geopolitical issues, and mixed messages from the business world. A quieter day on the corporate reporting calendar gave investors a chance to catch their breath and take stock of events,” said Dan Coatsworth, head of markets at AJ Bell.
The FTSE 100 index closed down just 3.65 points at 10,235.29. It had earlier hit a new intra-day best level of 10,257.75.
The FTSE 250 ended up 31.39 points, 0.1%, at 23,311.37, and the AIM All-Share closed just 0.27 of a point higher at 804.75.
For the week, the FTSE 100 rose 1.1%, the FTSE 250 climbed 1.2%, and the AIM All-Share advanced 2.1%%.
The Cboe UK 100 was down 0.2% at 1,022.85, the Cboe UK 250 was up 0.3% at 20,437.13, and the Cboe Small Companies was down 0.6% at 18,003.11.
In European equities on Friday, the CAC 40 in Paris closed down 0.7%, while the DAX 40 in Frankfurt ended 0.2% lower.
“There was a slightly negative tone across European stock indices on Friday,” commented David Morrison, senior market analyst, at Trade Nation. “It appeared that investors were more comfortable taking some risk off the table, no doubt mindful that US markets will be closed on Monday for Martin Luther King Day.”
In London, the FTSE 100 was pegged back by weak mining stocks, a key factor behind recent index strength.
The price of copper fell 3.0%, and silver slumped 3.7%, giving up some recent gains, while gold nursed less severe falls.
Gold was quoted at USD4,594.24 an ounce on Friday, down from USD4,616.76 on Thursday.
In response, Endeavour Mining fell 2.7%, Anglo American declined 2.4%, Antofagasta dipped 2.9%, and Glencore fell 2.5%.
Strategists at Bank of America downgraded the mining sector to ‘underweight’ and lifted energy to ‘market weight’.
“After sharp outperformance for mining, the potential downside risks stemming from the sector’s macro drivers are becoming hard to ignore,” BofA said.
BofA noted that a historical divergence in commodity prices has led to a decoupling among European resources with a surge in metal prices over recent months, including a 50% rally in copper, alongside a “roll-over” in energy prices, with the oil price down 30% to four-year lows recently.
As a result, the copper-to-oil ratio has risen close to a 40-year high, which in turn has led to significant divergence between European resources sectors, with mining outperforming by 40% since April, while energy has underperformed by nearly 15%.
“Resources sector pricing looks stretched in both directions,” BofA added.
Brent oil traded higher at USD64.48 a barrel on Friday, up from USD63.55 late on Thursday.
Pearson ended a miserable week for investors, with a further 4.1% decline.
The educational publisher has seen its shares fall 12% this week after a poorly received trading update.
A previously undisclosed contract loss for US student assessment in New Jersey, which will drag on first-half growth, was blamed for the stock fall, although analysts note Pearson is confident that the loss of the contract will have no bearing on other renewals in the coming years.
Heading higher, property companies British Land and Land Securities, up 1.4% and 1.3% respectively, on hopes lower interest rates will spark a sector upturn, while BAE Systems, up 2.3%, remained in favour amid geopolitical jitters.
Stocks in New York were little changed. The Dow Jones Industrial Average was slightly lower, while the S&P 500 index was up 0.1%, as was the Nasdaq Composite.
Economic data showed that US industrial production rose faster than expected in December.
The Federal Reserve said that on a monthly basis, industrial production increased by 0.4% in December, the same pace as in November, which was revised up from 0.2%. It was better than the FXStreet-cited consensus of a 0.1% uptick.
On an annual basis, total industrial production was 2.0% higher in December than a year prior.
Shannon Glein, analyst at Wells Fargo, said the underlying details show a “key theme from last year – everything high-tech and AI related outperformed.”
“We expect this trend to persist going forward, but it’s also worth noting that the slow yet steady ascent in all other industrial production on a year-ago basis is a sign that broader activity may be starting to recover,” she added.
The pound was quoted lower at USD1.3382 at the time of the London equities close on Friday, compared to USD1.3388 on Thursday.
The euro stood at USD1.1596, lower against USD1.1607. Against the yen, the dollar was trading at JPY158.06, down from JPY158.48.
The yield on the US 10-year Treasury was quoted at 4.21%, widening from 4.16%. The yield on the US 30-year Treasury was quoted at 4.82%, stretched from 4.78%.
Back in London, Genus led the FTSE 250 risers, advancing 7.8%, after reporting that adjusted pretax profit for the six months to December 31 would be about GBP50 million, ahead of expectations.
Berenberg pointed out it was “the second guidance raise in the past three months, making it one of the standout performers within our coverage.”
“Importantly, the upgrades are being driven by strong trading in the PIC (pigs) business, which reflects the benefits of the group’s shift towards a royalty-driven model. This is increasing the defensiveness and predictability of earnings and sets a very positive tone for a year that we believe has more positive catalysts to come”, the bank added.
Elsewhere, Close Brothers gained 5.0% as RBC Capital Markets upgraded it to ‘outperform’ from ‘sector perform’. Also, Watches Of Switzerland Group pushed 2.6% to the good as Bank of America raised it to ‘buy’ from ‘neutral’.
Auction Technology soared 13% as FitzWalter Capital said it might raise its bid for the company.
FitzWalter, a private investment company, said it was considering making an offer of 400 pence per share for the London-based auction market operator, raised from an initial 360p tilt made earlier this month.
The biggest risers on the FTSE 100 were BAE Systems, up 47.00 pence at 2,088.00p, NatWest, up 13.80p at 652.80p, Smiths Group, up 50.00p at 2,612.00p, Schroders, up 8.60p at 467.00p and National Grid, up 20.50p at 1,201.50p.
The biggest fallers on the FTSE 100 were Pearson, down 39.60p at 939.00p, Entain, down 23.80p at 703.00p, Antofagasta, down 105.00p at 3,560.00p, Endeavour Mining, down 110.00p at 3,996.00p and Glencore, down 12.40p at 478.60p.
Monday’s global economic calendar features a slew of data from China, including GDP, retail sales, and industrial production.
In Canada, inflation figures will be published, while US financial markets are closed for Martin Luther King Jr Day.
Monday’s UK corporate calendar has a trading statement from building materials firm Marshalls.
Later in the week, trading statements are due from luxury goods retailer Burberry, sports retailer JD Sports Fashion and miner Rio Tinto.
By Jeremy Cutler, Alliance News reporter
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