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(Alliance News) - The FTSE 100 managed to outperform European counterparts on Friday due to weakness in the pound as consumer confidence in the UK fell to a record low, while attention turns to next week's Jackson Hole Symposium.
The FTSE 100 index closed up 8.52 points, or 0.1%, at 7,550.37, ending the week 0.7% higher.
The FTSE 250 ended down 248.86 points, or 1.2%, at 19,887.79, shedding 2.2% over the course of the week. The mid-cap index is widely considered a more accurate barometer of the UK's economic health due to its domestic exposure.
The AIM All-Share finished down 4.39 points, or 0.5%, at 920.17, losing 1.4% since the start of the week.
The Cboe UK 100 ended up 0.3% at 753.50, the Cboe UK 250 closed down 1.3% at 17,194.58, and the Cboe Small Companies ended down 0.2% at 14,319.05.
In European equities, the CAC 40 stock index in Paris ended down 0.9%, while the DAX 40 in Frankfurt finished 1.1% lower.
"European equities have been hit hard today, as markets start to show signs of a potential impending bearish reversal coming into play. Fortunately for UK investors, the FTSE 100 has managed to perch itself on an island of green, with a collapse in the pound helping to avoid the seemingly inevitable drop into the surrounding red sea. The resurgence in the dollar seen this week serves to highlight the growing feeling that we are on the cusp of another slump, as investors prepare to head for the exit doors once again," said IG Group's Josh Mahony.
In the FTSE 100, drugmakers AstraZeneca and GSK closed up 2.1% and 1.7% respectively.
"The FTSE 100 is outperforming largely due to the weakness of the pound which is helping the big US dollar earners on the index, as well as a strong showing from the more defensive areas of the index, notably health care and GSK and AstraZeneca," explained CMC Markets analyst Michael Hewson.
In the FTSE 250, easyJet lost 6.3% after the budget airline's Spanish pilots began a new three-day work stoppage calling for the reinstatement of conditions they enjoyed before the pandemic, union officials said.
International Consolidated Airlines Group, which owns the flag carrier airline of Spain Iberia, ended the worst blue-chip performer, down 5.1%. Cabin crew at Iberia Express, the low-cost arm of Spain's Iberia national carrier, are also expected to stage a 10-day strike from August 28 to September 6, the USO union has said.
Elsewhere, Cineworld plunged 58% after the Wall Street Journal reported that the movie theatre operator is preparing to declare bankruptcy, as it struggles to recover from pandemic lows.
According to people familiar with the matter, the London-based cinema chain has engaged with lawyers from Kirkland & Ellis LLP and consultants from AlixPartners to advise Cineworld on its bankruptcy process.
Cineworld is expected to fill a chapter 11 petition in the US, and is also considering filing for an insolvency proceeding in the UK.
On Wednesday, Cineworld warned that lacklustre trading was prompting potential financing decisions that could significantly dilute shareholders.
The dollar was higher across the board. The pound was quoted at USD1.1790 at the London equities close, down sharply from USD1.2000 at the close Thursday.
Sterling was dealt a blow after UK consumer confidence hit a record low amid "acute concerns" in the face of the soaring cost of living and bleak economic prospects.
GfK's long-running Consumer Confidence Index fell three points in August to minus 44, its lowest figure since records began in 1974. All five measures that make up the index fell last month, including confidence in personal finances and the general economy.
Confidence in the general economy looking back over the previous year has decreased for eight months in a row to reach minus 68 - some 26 points lower than last August.
The euro stood at USD1.0035 at the European equities close, down from USD1.0132. Against the yen, the dollar was trading at JPY137.15, up sharply from JPY135.10.
Stocks in New York were firmly lower at the London equities close with the US Federal Reserve set to continue on its aggressive rate hike path at its next meeting in September.
Federal Reserve Bank of St. Louis President James Bullard told the Wall Street Journal on Thursday he is considering support for another 75 basis points rate rise at the Fed's policy meeting next month.
Elsewhere, Minneapolis Fed President Neel Kashkari on Thursday said he was insistent that the Fed needed to do more on inflation urgently, even if it meant tipping the economy to the brink of risking a recession.
Meanwhile, US Federal Reserve Chair Jerome Powell will address the who's who of the central banking world in Jackson Hole, Wyoming, on August 26.
The DJIA was down 0.8%, the S&P 500 index down 1.2% and the Nasdaq Composite down 1.9%.
On Wall Street, General Motors was up 2.5% after the automaker said it would reinstate its investor dividend in September and resume "opportunist" share repurchases. GM had suspended payouts at the onset of the pandemic.
Apple was down 1.5% after the tech giant warned of a flaw that is allowing hackers to seize control of iPhones, iPads and Mac computers, and is urging users to install emergency software updates.
Patches were released Thursday and Wednesday by the tech titan to fix what it described as a vulnerability hackers already knew about and may be taking advantage of. However, Apple did not disclose whether it had information regarding the extent to which the issue has been exploited.
"Apple is aware of a report that this issue may have been actively exploited," the Cupertino, California-based company said.
Brent oil was quoted at USD96.45 a barrel at the London stock market close, firm from USD96.12 at the close Thursday.
Gold stood at USD1,748.05 an ounce at the London equities close, lower against USD1,761.70 late Thursday.
The economic events calendar on Monday has the China PBoC loan prime rate announcement overnight.
The UK corporate calendar on Monday has annual results from eConveyancer comparison platform owner Smoove.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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