London close: Stocks finish Friday in the red

(Sharecast News) - London stocks ended the week lower on Friday as investors reacted to US president Dinald Trump's announcement of reciprocal tariffs, while weakness in NatWest added to the pressure after the lender's latest results failed to impress. The FTSE 100 index declined 0.37% to close at 8,732.46 points, while the FTSE 250 edged down 0.02% to 20,913.01 points.

In currency markets, sterling was last up 0.33% on the dollar to trade at $1.2608, while it dipped 0.01% against the euro, changing hands at €1.2008.

"Traders have cashed in profits ahead of a prolonged US weekend, following Thursday's surge higher in European and US stock indices, the latter close to their record highs," said IG senior technical analyst Axel Rudolph.

"US retail sales falling more than expected were counteracted by US industrial output which rose more-than-expected.

"An upwardly-revised fourth quarter euro area GDP growth revision wasn't enough to prevent profit taking in the region's stock markets, most of which ended the day in the red."

Rudolph noted that as a result, the FTSE 100, DAX 40 and Euro Stoxx 600 ended their spell of several straight days of record gains.

"The crude oil price resumed its descent after a short-term bounce on Friday as hopes of an end to the Ukraine-Russia war linger amid ample supply.

"Whereas the gold price has come off its $2,942 per troy ounce record high by around a percentage point on profit taking, the silver price rallied by a similar amount, nonetheless giving back half of its intraday gains."

US industrial production rises more than expected, Trump announces reciprocal tariff plans

In economic news, industrial production in the United States rose more than expected in January, supported by a continued rebound in aircraft manufacturing following the resolution of a Boeing strike.

According to fresh Federal Reserve data, overall industrial output increased 0.5% last month, surpassing the 0.3% gain forecast by economists.

Aircraft and parts production accounted for 0.2 percentage points of the growth as the sector benefited from the return of workers at Boeing, whose seven-week strike ended in November.

However, manufacturing output as a whole edged down 0.1%, weighed by a 5.2% drop in motor vehicle and parts production.

Mining activity also declined, slipping 1.2%, but utilities surged 7.2% as cold weather drove higher demand for heating.

December's industrial output was revised up to a 1.0% gain from the previously reported 0.9%.

Meanwhile, US retail sales fell more sharply than expected at the start of the year, signaling a slowdown in consumer spending.

Seasonally-adjusted data from the Commerce Department showed sales declining 0.9% in January to $723.9bn, compared with the 0.3% drop anticipated by analysts.

The decline was led by a 2.8% slump in auto and parts sales, which accounted for more than half of the overall decrease.

Weakness was also seen in non-store retail, home furnishings, building materials, and sporting goods, while gasoline station sales rose 0.9%.

Despite the monthly drop, retail sales were still up 4.2% from a year earlier.

December's reading was revised higher to 0.7% growth from the previously reported 0.4%.

In trade policy, Donald Trump announced plans to introduce "reciprocal tariffs" on US imports, aiming to counter what he views as unfair foreign trade practices.

Speaking from the Oval Office overnight, the president said the measure would ensure parity in trade by aligning US tariffs with those imposed by other nations.

While the presidential memorandum he signed does not impose immediate duties, it directed the Commerce Department and the US trade representative to evaluate potential adjustments, with reports due by 1 April.

NatWest and Wood Group in the red, Entain jumps

On London's equity markets, NatWest Group fell 2.79% despite reporting annual results that marginally exceeded expectations.

The bank's pre-tax profit rose 0.3% to £6.2bn, ahead of forecasts, with loan growth and stronger deposit inflows supporting income.

Net interest margins edged up to 2.13%, and return on tangible equity reached 17.5%, surpassing guidance.

Despite those positives, the stock declined as investors focused on cautious forward guidance, with NatWest forecasting a return on tangible equity between 15% and 16% this year and just over 15% by 2027.

"NatWest's numbers were solid enough - and actually came in slightly above expectations - but the 2025 outlook was only in line with the existing guidance and the market has reacted negatively to the lack of upgrades," said Russ Mould, investment director at AJ Bell.

HSBC meanwhile slipped 0.83% following reports from Bloomberg that the bank was planning fresh investment banking job cuts, starting in Asia before expanding globally.

The exact scale of the redundancies remained unclear, however.

John Wood Group plunged 45.03% after flagging weaker-than-expected fourth-quarter trading.

The company scrapped executive and employee bonuses and warned of negative free cash flow in 2025.

A Deloitte review also identified "material" weaknesses in its financial controls, prompting the firm to initiate measures to strengthen governance.

"It's a lot of bad news to stomach, hence why investors have been quick to hit the sell button on the shares," Russ Mould said.

On the upside, Entain surged 6.77% after disclosure that US hedge fund Corvex Management had built a 5.3% voting stake in the company, fueling investor interest.

The broader gambling sector also gained, with Flutter Entertainment rising 4.95% after US-based DraftKings raised its 2025 revenue outlook to $6.45bn.

Miners contributed to market gains, with Glencore rising 2.84%, Antofagasta up 0.84%, and Rio Tinto gaining 1.27%.

XPS Pensions Group leapt 11.08% after stating that its full-year results would be "materially ahead" of expectations.

Ferrexpo climbed 3.54% on renewed optimism for a resolution to the war in Ukraine, where the company has significant operations.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 8,732.46 -0.37% FTSE 250 (MCX) 20,913.01 -0.01% techMARK (TASX) 4,751.75 -0.14%

FTSE 100 - Risers

Flutter Entertainment (DI) (FLTR) 23,630.00p 7.31% Entain (ENT) 744.40p 6.77% Intermediate Capital Group (ICG) 2,426.00p 2.36% Rentokil Initial (RTO) 424.70p 2.26% Glencore (GLEN) 353.20p 2.24% Croda International (CRDA) 3,246.00p 1.44% SEGRO (SGRO) 731.40p 1.30% CRH (CDI) (CRH) 8,520.00p 1.28% Scottish Mortgage Inv Trust (SMT) 1,133.00p 1.25% DCC (CDI) (DCC) 5,450.00p 1.21%

FTSE 100 - Fallers

Schroders (SDR) 371.60p -3.13% International Consolidated Airlines Group SA (CDI) (IAG) 338.50p -2.56% AstraZeneca (AZN) 11,708.00p -2.14% Hikma Pharmaceuticals (HIK) 2,292.00p -2.05% NATWEST GROUP (NWG) 428.10p -2.04% Barratt Redrow (BTRW) 452.20p -1.97% Unilever (ULVR) 4,399.00p -1.87% Diageo (DGE) 2,145.50p -1.81% Haleon (HLN) 384.30p -1.79% Smurfit Westrock (DI) (SWR) 4,265.00p -1.73%

FTSE 250 - Risers

XPS Pensions Group (XPS) 390.00p 12.39% Hochschild Mining (HOC) 202.00p 4.99% Assura (AGR) 39.00p 4.17% Fidelity China Special Situations (FCSS) 253.00p 4.12% Ferrexpo (FXPO) 96.40p 3.54% Man Group (EMG) 215.60p 2.18% Lancashire Holdings Limited (LRE) 612.00p 2.17% Foresight Group Holdings Limited NPV (FSG) 405.00p 2.02% Harbour Energy (HBR) 242.60p 1.89% Primary Health Properties (PHP) 91.75p 1.89%

FTSE 250 - Fallers

Wood Group (John) (WG.) 30.18p -53.82% Mitchells & Butlers (MAB) 225.50p -3.63% NCC Group (NCC) 136.00p -2.58% Trainline (TRN) 355.00p -2.15% 4Imprint Group (FOUR) 5,640.00p -2.08% W.A.G Payment Solutions (WPS) 66.40p -2.06% Aston Martin Lagonda Global Holdings (AML) 112.30p -1.92% Big Yellow Group (BYG) 923.00p -1.91% Watches of Switzerland Group (WOSG) 553.00p -1.86% Barr (A.G.) (BAG) 636.00p -1.85%