London close: Stocks erase early gains, end week lower

(Sharecast News) - The FTSE 100 failed to hold on to earlier gains by the close on Friday following a weak start on Wall Street, while UK investors continued to digest data showing an unexpected economic contraction in October. The FTSE 100, which hit an intraday high of 9,761.47 (+0.6%) in morning trade - initially on track to finish at its highest level in a month - finished 0.6% lower at 9,649.03. The late drop meant the benchmark ended in the red for the second straight week, falling 0.2%.

Sharp losses on Wall Street, where the S&P 500 retreated from record highs and the Nasdaq dropped 2%, was dampening sentiment amid renewed concerns over AI valuations, with both indices hitting a two-week low.

Meanwhile, figures from the Office for National Statistics released early on showed that the UK economy shrank 0.1% in October following a 0.1% decline in September and no growth in August.

"The constant rumour mill about what might or might not be in November's Budget caused consumers and businesses to put the brakes on spending in October," said Dan Coatsworth, head of markets at AJ Bell.

"A worse-than-expected GDP figure is the result of a country going into a freeze, fearing that the chancellor would hike taxes and leave less money in people's pockets. There is a real chance that November's GDP figure will be equally as gloomy given the Budget didn't happen until the end of month."

While disappointing economists who had been expecting a GDP rebound of 0.1%, the data did raise hopes that the Bank of England will be forced to cut interest rates when it meets next week to spur economic activity.

The EY Item Club, which expects the Bank to cut rates from 4.0% to 3.75% next week, said the decision will "likely be another close call", adding that next week's crucial inflation data "could prove the final hurdle and may still sway the decision in either direction".

Fresnillo shines as gold prices rise

Precious metals miners Fresnillo and Hochschild were among the best performers on the FTSE 100 and FTSE 250 respectively as gold prices rose. However, other heavyweight miners finished firmly lower, including Anglo American, Rio Tinto and Glencore.

Premier Inn owner Whitbread was under the cosh, as Jefferies downgraded it to 'hold' from 'buy' and cut the price target to 2,100p from 3,100p. It cited downside risks from UK headwinds, partially offset by valuation.

InterContinental Hotels rallied after Jefferies upgraded the shares to 'buy' from 'hold' and hiked the price target to 11,400p from 8,700p.

Weir Group was weaker as it said it has agreed to buy the remaining 50% share of its Chile-based joint venture ESEL for a sterling equivalent purchase price of £56m.

Meanwhile, on the FTSE 250, oil and gas company Harbour Energy rose after agreeing to acquire substantially all the subsidiaries of Waldorf Energy Partners and Waldorf Production, both of which were currently in administration.

Market Movers

FTSE 100 (UKX) 9,649.03 -0.56% FTSE 250 (MCX) 21,876.55 0.11% techMARK (TASX) 5,552.30 -0.18%

FTSE 100 - Risers

Burberry Group (BRBY) 1,266.50p 3.98% Flutter Entertainment (DI) (FLTR) 16,695.00p 2.77% Ashtead Group (AHT) 5,138.00p 2.55% BT Group (BT.A) 180.45p 2.09% InterContinental Hotels Group (IHG) 10,235.00p 1.84% International Consolidated Airlines Group SA (CDI) (IAG) 403.70p 1.53% Babcock International Group (BAB) 1,248.00p 1.46% Beazley (BEZ) 813.50p 1.37% Auto Trader Group (AUTO) 602.00p 1.21% Diageo (DGE) 1,664.00p 1.12%

FTSE 100 - Fallers

Metlen Energy & Metals (MTLN) 41.50p -4.16% St James's Place (STJ) 1,316.50p -3.59% British American Tobacco (BATS) 4,238.00p -3.33% Anglo American (AAL) 2,817.00p -2.76% Weir Group (WEIR) 2,856.00p -2.72% Imperial Brands (IMB) 3,179.00p -2.63% Diploma (DPLM) 5,315.00p -2.48% Whitbread (WTB) 2,349.00p -2.33% Glencore (GLEN) 375.50p -1.96% Rio Tinto (RIO) 5,589.00p -1.69%

FTSE 250 - Risers

Wizz Air Holdings (WIZZ) 1,194.00p 7.37% Foresight Environmental Infrastructure Limited (FGEN) 67.40p 3.85% Hays (HAS) 53.80p 3.36% Harbour Energy (HBR) 205.80p 3.31% Senior (SNR) 190.00p 3.04% Chemring Group (CHG) 475.00p 3.04% Hochschild Mining (HOC) 456.40p 2.75% Morgan Advanced Materials (MGAM) 212.00p 2.66% RTW Biotech Opportunities Ltd (RTW) 2.03p 2.53% Ocado Group (OCDO) 225.50p 2.41%

FTSE 250 - Fallers

Oxford Nanopore Technologies (ONT) 124.40p -4.82% Diversified Energy Company (DI) (DEC) 1,085.00p -4.41% Vietnam Enterprise Investments (DI) (VEIL) 729.00p -3.19% Quilter (QLT) 178.30p -2.89% AJ Bell (AJB) 455.20p -2.65% Genus (GNS) 2,495.00p -2.54% Kainos Group (KNOS) 1,055.00p -2.50% Oxford Biomedica (OXB) 626.00p -2.34% Helios Towers (HTWS) 159.00p -2.21% Future (FUTR) 533.00p -2.20%