London close: Stocks rebound strongly after week of volatility

(Sharecast News) - London stocks finished a turbulent week in the green on Friday, recovering from heavy losses earlier in the week as consternation over inflation and a slowdown in global growth rattled markets. The FTSE 100 ended the session up 2.55% at 7,418.15, and the FTSE 250 was ahead 2.26% at 19,921.

London's top-flight index was more than 30 points higher week-on-week at the close on Friday.

Sterling was also stronger against its major trading pairs, last rising 0.37% on the dollar to $1.2247, and gaining 0.05% on the euro to change hands at €1.1761.

"And just like that, the FTSE 100's fairy godmother waved her magic wand and London's blue-chip index is back in the black and up a teeny tiny bit on where it was at the start of 2022," said AJ Bell financial analyst Danni Hewson.

"No mean feat, when you consider what the year has dropped on investors so far."

Hewson said markets seemed generally determined to put the last week behind them and end on a positive note, even if the consensus was that the positivity would be short-lived.

"And most indices have a whole lot more ground to make up as investors wrestle with this 'new normal', a world where money doesn't go as far, and every week delivers an unpleasant jolt to sensibilities."

On the economic front, US import prices were flat month-on-month in April, following an upwardly revised 2.9% increase in March, missing market forecasts for a 0.6% uptick and marking the first time that import prices failed to rise year-to-date.

According to the Bureau of Labor Statistics, fuel prices declined 2.4% following a 39.2% increase from December to March, as lower petroleum prices more than offset increased natural gas costs.

Prices for non-fuel imports increased 0.4%, mainly due to the cost of industrial supplies and materials, and year-on-year, import prices were up 12%

Export prices, on the other hand, rose 0.6% month-on-month in April, cooling off from March's downwardly-revised 4.1% increase to narrowly miss expectations for a 0.7% jump.

Still stateside, Americans' confidence in the economy and their finances fell further in the beginning of May, according to a closely-followed survey.

The University of Michigan's consumer confidence index retreated from a reading of 65.2 at the end of April to 59.1 in early May.

Economists had anticipated a dip to 63.7.

"That is not much of a surprise given gasoline prices remain elevated and stock markets have fallen sharply," said Capital Economics senior US economist Michael Pearce.

"The expectations index is now at a level consistent with past form with consumption growth declining by 2% year-on-year, though the relationship between the two has broken down in recent years."

Across the channel, eurozone Industrial production fell 1.8% in March compared with February, according to data released earlier by Eurostat.

On a year-on-year basis output fell by 0.8% in the single currency area.

Capital goods production fell 2.7%, non-durable consumer goods 2.3%, intermediate goods 2%, and energy 1.7%, while production of durable consumer goods went up 0.8%.

On home shores, Brexit minister Jacob Rees-Mogg looked to rule out emergency support to help tackle the soaring cost-of-living crisis on Friday, as he called on the Bank of England to increase interest rates.

During a round of morning media interviews, the Tory MP argued the right responses to soaring inflation were "tighter monetary policy, which is the responsibility of the Bank of England, and constrained fiscal policy".

"An emergency budget is not likely to be an answer to this," he told Times Radio.

He also hailed policies followed by Margaret Thatcher's Conservative government of the 1980s.

"The problem with spending more money is you make the inflationary problem worse rather than better," he said to GB News.

"This is very difficult for politicians, because with a cost of living problem, there aren't easy, popular things to do, and if you do those you make the problem worse."

In equities, it was a light day for corporate news, although business software firm Sage Group rose 3.86% after it reported flat interim profits and revenue, as organic growth in all regions was offset by disposals and currency headwinds.

The company said pre-tax profit for the six months ended 31 March fell 1% to £189m, while revenue slipped to £934m from £937m.

Wholesale power firm ContourGlobal was ahead 1.27% after it said its diversified business remained "resilient and well positioned" despite "unprecedented turbulence" in global energy markets and that it had performed ahead of its expectations in the first quarter.

In broker note action, Coca-Cola HBC jumped 4.71% after an upgrade to 'buy' from 'hold' at Jefferies, while kitchenfitters' supplier Howden Joinery reversed earlier gains to rise 0.5%, despite a downgrade to 'hold' at Stifel.

On the downside, Drax Group was knocked 3.04% lower by a downgrade to 'underperform' from 'neutral' at Credit Suisse, while Vodafone Group was 0.76% weaker after a downgrade to 'hold' from 'buy' at Jefferies, which cited "intractable headwinds".

Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk, Abigail Townsend, Iain Gilbert, Alexander Bueso and Frank Prenesti.

Market Movers

FTSE 100 (UKX) 7,418.15 2.55% FTSE 250 (MCX) 19,921.89 2.26% techMARK (TASX) 4,310.07 2.07%

FTSE 100 - Risers

Scottish Mortgage Inv Trust (SMT) 805.80p 7.33% Flutter Entertainment (CDI) (FLTR) 8,944.00p 5.62% Compass Group (CPG) 1,802.50p 5.27% Intermediate Capital Group (ICP) 1,426.50p 5.16% Prudential (PRU) 960.00p 4.96% Entain (ENT) 1,374.50p 4.92% Ocado Group (OCDO) 810.80p 4.75% Coca-Cola HBC AG (CDI) (CCH) 1,766.50p 4.71% Smith & Nephew (SN.) 1,277.50p 4.63% Abrdn (ABDN) 189.30p 4.01%

FTSE 100 - Fallers

Pearson (PSON) 743.60p -1.54% Vodafone Group (VOD) 117.82p -0.76% Avast (AVST) 495.90p -0.56% Aveva Group (AVV) 2,126.00p -0.42% London Stock Exchange Group (LSEG) 7,220.00p 0.00% Meggitt (MGGT) 772.80p 0.05% Admiral Group (ADM) 2,249.00p 0.18% Harbour Energy (HBR) 452.10p 0.31% Howden Joinery Group (HWDN) 681.80p 0.50% Barratt Developments (BDEV) 484.80p 0.58%

FTSE 250 - Risers

Baltic Classifieds Group (BCG) 156.60p 12.66% Moonpig Group (MOON) 239.80p 10.71% TI Fluid Systems (TIFS) 184.00p 10.58% Dr. Martens (DOCS) 199.80p 9.24% Chrysalis Investments Limited NPV (CHRY) 132.60p 8.69% Trustpilot Group (TRST) 110.10p 8.37% Bridgepoint Group (Reg S) (BPT) 275.00p 7.67% Bellevue Healthcare Trust (Red) (BBH) 151.60p 6.16% SSP Group (SSPG) 234.90p 5.80% Oxford Biomedica (OXB) 500.00p 5.60%

FTSE 250 - Fallers

Drax Group (DRX) 743.50p -3.04% Vietnam Enterprise Investments (DI) (VEIL) 656.00p -2.67% VinaCapital Vietnam Opportunity Fund Ltd. (VOF) 475.00p -1.66% BH Macro Ltd. GBP Shares (BHMG) 4,300.00p -1.60% Greencoat UK Wind (UKW) 155.00p -1.52% Playtech (PTEC) 510.50p -1.45% Abrdn Private Equity Opportunities Trust (APEO) 462.00p -1.32% Helios Towers (HTWS) 111.20p -1.24% Ninety One (N91) 245.00p -1.13% Rank Group (RNK) 101.00p -0.98%