- FTSE 100 gains 3.8 per cent higher on the week
- German and French confidence data beats expectations
- EU summit ends with deadlock
After a subdued start, UK stocks rallied in afternoon trade on Friday with decent economic figures from Germany and France lifting the mood.
The positive finish helped the FTSE 100 index post its best weekly performance this year, up 3.8% in the last five days.
Meanwhile, market strategist Ishaq Siddiqi from ETX Capital said this afternoon: "A firm session on Wall Street with stock markets playing catch-up after yesterday's closure for Thanksgiving sees the return of volumes in the market place, albeit still relatively light."
The IFO Institute's widely-followed gauge of German business confidence rose in November to the 101.4 point level, from 100 in the previous month, surprising the consensus of analyst who had expected a decline. That was only the first improvement after six successive months of decline.
There was also some upbeat data from France after the statistics institute INSEE's French business confidence index for the month of November came in at a better-than-expected 87 points, versus 85 in October.
The two-day summit of European Union leaders to discuss a new seven-year budget ended today with the same result as yesterday: no agreement. Speaking to reporters after the first day of meeting, German Chancellor Angela Merkel said that "position remains too far apart".
Going into next week, trade is likely to be volatile on Monday with US traders returning from a four-day weekend and all eyes pinned on the Eurogroup meeting on Greece.
Financial trader Shavaz Dhalla from Spreadex said that investor's patience is "nearing the end of its tether" with Monday's meeting being the third of its kind without an agreement. "A lack of agreement on Monday could prove 'three strikes are out' for investor's tolerance regarding Greece's negotiations with its international lenders," he said.
FTSE 100: Water groups take a bath; SABMiller extends gains
Utilities stocks were under pressure today after voicing concerns with Ofwat's proposed water price controls in response to a statement by the regulator this week which welcomed "constructive" criticism. The general consensus is that water suppliers do not agree with the proposals from the regulator, which said that it wanted to set segmental price controls.
Pennon and Severn Trent were in the red, while United Utilities was registering slight gains. Investors were deciding to take caution ahead of next week when interim results from all three companies are due.
Xstrata was higher after saying that its nickel division has completed the construction of the first production line at the Koniambo project has been completed, with first metal anticipated in January. It was announced yesterday afternoon that Xstrata's merger with commodities giant Glencore has won the blessing of the European Commission. Both stocks were making gains this morning.
Sector peer ENRC rose after announcing that it is putting more on its Chairman's plate in order to let its Chief Executive Officer focus more on operations, "notably cost and operational efficiencies across the group's assets." Anglo American was also wanted after naming the leadership team for its UK construction joint venture with French cement group Lafarge.
Drinks giant SABMiller was on the up after releasing its first-half results yesterday. The stock was raised from 'reduce' to 'neutral' by Nomura this morning, which cited alleviated concerns about the company's margins. Meanwhile, Credit Suisse reiterated its 'outperform' rating on the shares
today, saying that while the stock is trading at a 6% premium to the wider consumer staples sector, it believes it can "re-establish a c10% premium rating".
Oil titan BP was higher after appointing long-running company employee Lamar McKay as the new head of its Upstream division, which is thought to ease the pressure on current frontman Bob Dudley.
FTSE 250: Lonmin and Hochschild take a hit
Platinum miner Lonmin was among the heaviest fallers after UBS slashed its target price for the shares from 260p to 240p and reiterated its 'sell' recommendation on the back of lower estimated production figures and higher costs. Analysts said that the stock is expected to be "volatile" during the period of the ongoing rights issue.
Precious metals group Hochschild Mining was also under the weather after saying that it now expects to get the construction permits for its Inmaculada and Crespo projects in the second half of 2013 following delays by the Peruvian government.
Mortgage provider Paragon Group of Companies was continuing to make gains following its full-year results on Tuesday in which it unveiled record profits and a 50% rise in the dividend.
Retailers were also performing well today with Home Retail and SuperGroup among the best performers. Seymour Pierce reiterated its 'buy' rating for SuperGroup today, saying that although shares have had a good run over the last year - partly due to a sector re-rating - "it is still good value considering the operational gearing in the earnings and expected step-up in the earnings growth rate over the medium term".
FTSE 100 - Risers
GKN (GKN) 218.40p +1.87%
IMI (IMI) 1,017.00p +1.70%
Johnson Matthey (JMAT) 2,326.00p +1.62%
Evraz (EVR) 241.10p +1.60%
British Sky Broadcasting Group (BSY) 777.50p +1.50%
Petrofac Ltd. (PFC) 1,630.00p +1.49%
Kingfisher (KGF) 280.70p +1.34%
Aberdeen Asset Management (ADN) 342.70p +1.27%
Schroders (SDR) 1,589.00p +1.27%
Croda International (CRDA) 2,332.00p +1.26%
FTSE 100 - Fallers
Polymetal International (POLY) 1,099.00p -0.81%
Morrison (Wm) Supermarkets (MRW) 261.70p -0.65%
Standard Chartered (STAN) 1,437.50p -0.48%
Pennon Group (PNN) 605.00p -0.33%
Whitbread (WTB) 2,355.00p -0.21%
Tullow Oil (TLW) 1,393.00p -0.21%
Rio Tinto (RIO) 3,006.50p -0.12%
Serco Group (SRP) 555.50p -0.09%
Associated British Foods (ABF) 1,450.00p -0.07%
Sage Group (SGE) 307.70p -0.03%
FTSE 250 - Risers
New World Resources A Shares (NWR) 233.00p +4.06%
Home Retail Group (HOME) 110.30p +3.18%
Stobart Group Ltd. (STOB) 110.40p +2.70%
Paragon Group Of Companies (PAG) 248.40p +2.64%
Ruspetro (RPO) 85.95p +2.32%
Pace (PIC) 185.10p +2.32%
Diploma (DPLM) 478.30p +1.96%
Bumi (BUMI) 264.70p +1.89%
TR Property Inv Trust (TRY) 163.00p +1.88%
Electrocomponents (ECM) 212.60p +1.77%
FTSE 250 - Fallers
Kenmare Resources (KMR) 30.33p -6.27%
Savills (SVS) 424.80p -3.01%
NMC Health (NMC) 169.80p -2.64%
Lonmin (LMI) 291.40p -2.57%
Perform Group (PER) 395.00p -2.47%
Hochschild Mining (HOC) 475.50p -2.42%
Renishaw (RSW) 1,777.00p -2.36%
RPS Group (RPS) 210.70p -2.32%
Sports Direct International (SPD) 391.20p -2.13%
Carpetright (CPR) 661.00p -2.07%