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(Alliance News) - Stock prices in London closed lower on Friday, as investors digest a week of US-centred data and its implications for the future of interest rates.
The FTSE 100 index closed down 131.63 points, 1.7%, at 7,748.35, ending the week down 2.5%. It was the blue-chip index's fourth-successive daily decline.
The FTSE 250 ended down 335.44 points, 1.7%, at 19,357.46, closing the week down 2.9%. The AIM All-Share closed down 1.4%, or 12.23 points, at 837.44 - finishing down 3.3% over the past five days.
The Cboe UK 100 ended down 1.9% at 774.30, the Cboe UK 250 closed down 1.8% at 16,977.20, and the Cboe Small Companies ended down 1.0% at 13,801.00.
The pound was quoted at USD1.2058 at the London equities close Friday, up compared to USD1.1926 at the close on Thursday.
The pound ticked past the USD1.20 mark on Friday, lifted by fresh data from the Office for National Statistics that showed the UK economy grew slightly faster than expected at the beginning of 2023.
Gross domestic product grew by 0.3% in January, according to an ONS estimate, having shrunk by 0.5% in December. FXStreet-cited market consensus had expected just a 0.1% rise in GDP.
"A recession has gone from being an inevitability to possibly avoidable and the pound is reaping the rewards, trading close to 1.20 against the dollar and up almost half a percent on the day," said Oanda Senior Market Analyst Craig Erlam.
The week has been dominated by news from the US, however.
According to the Bureau of Labor Statistics, US nonfarm payrolls rose by 311,000 in February, less than the 504,000 recorded in January. The previous month's figure was revised down from 517,000.
February's number was ahead of market consensus, according to FXStreet, of 205,000.
US initial jobless claims on Thursday also suggested the US labour market remained tight.
In the week ending March 4, the advance figure for seasonally adjusted initial claims was 211,000, according to figures from the Department of Labor. This was up 21,000 from the previous week's unrevised level of 190,000.
The data has caused a split in interest rate expectations for the US.
According to the CME Fed Watch Tool, following the US jobs data, markets see an even chance of either another 25 basis point hike or a larger 50 basis point lift at the Fed's next meeting in March.
James Knightley, chief international economist at ING, said it would be a "close call", though he added that the strong jobs report could embolden hawks on the Federal Open Market Committee.
On Tuesday, Federal Reserve Chair Jerome Powell said the US labour market remains "extremely tight" as he warned that US interest rates will likely peak at a higher level than previously anticipated.
Stocks in New York were higher at the London equities close, with the DJIA up 0.2%, the S&P 500 index up 0.1%, and the Nasdaq Composite was marginally higher.
In European equities on Friday, the CAC 40 in Paris ended down 1.6%, and the DAX 40 in Frankfurt ended down 1.5%.
The euro stood at USD1.0664 at the European equities close Friday, up against USD1.0580 at the same time on Thursday. Against the yen, the dollar was trading at JPY135.07, down compared to JPY136.29 late Thursday.
In the FTSE 100, London's banking stocks saw considerable losses.
HSBC lost 5.0%, Standard Chartered was down 4.5%, Barclays shed 4.1%, and Lloyds lost 3.5%.
The four largest US banks saw their stock prices lose a cumulative USD52 billion on Thursday, as the financial sector digested trouble at SVB Financial, a major Silicon Valley-focused lender.
Shares of SVB Financial plummeted 60% on Thursday and continued to fall in after-hours trading, following an announcement the prior evening that it had lost USD1.8 billion in sales of securities to raise funds.
That massive drop rippled through the financial sector, with the biggest US bank, JPMorgan Chase, ending the day down 5.4%. Bank of America and Wells Fargo both fell 6.2%, while Citigroup lost 4.1%.
On AIM, Aferian plunged 45%, after it said it expects annual revenue to be substantially below forecasts.
The Cambridge-based business-to-business video streaming solutions company said its Amino business saw a decline in revenue in the second half of 2022 as customers delayed orders in order to run down their existing inventories.
Aferian said this was due to the "wider macro-economic situation".
"This trend has continued longer than we expected and device sales in the first half have been materially lower than anticipated," the company noted.
The company's Amino division connects Pay TV to streaming services.
Aferian added that Amino has faced difficult trading conditions in financial 2023 so far, and that despite its strong sales pipeline for the second half of the year, a recovery is not expected until later in the financial year.
Shares in Versarien fell by 33%.
The Cheltenham, England-based engineering materials company said its Chief Executive Officer Neill Ricketts has resigned.
Versarien said it is now considering the "appropriate longer term management structure" and will update in due course.
Last month, the firm said the current macro-economic conditions have delayed the commercialisation it had been expecting, and hinted at the potential need for a fundraise.
Tintra surged 21%, after it said it has entered into a new subscription agreement for USD2.0 million.
The Windsor, Berkshire-based firm building banking and infrastructure technology systems said the subscription will be made through a new special purpose vehicle being established by a Gulf-based investor.
The subscription is for 141,483 new shares, priced at 1178.00 pence per share.
CEO Richard Shearer said: "We continue to make headway in the funding round, both with conversations that have been ongoing for some time and with new conversations starting. We have strategically now broadened the geographic footprint of our funding discussions in line with both macro-economic realities and the advancing nature of the Puerto Rico IFE application."
Brent oil was quoted at USD83.02 a barrel at the London equities close Friday, down slightly from USD83.15 late Thursday. Gold was quoted at USD1,859.42 an ounce at the London equities close Friday, up against USD1,827.92 at the close on Thursday.
In Monday's UK corporate calendar, there are full-year results from Phoenix Group, Direct Line Insurance and HgCapital Trust.
Monday is a quiet day on the economic calendar. At 1805 GMT, Bank of England Monetary Policy Committee Member Swati Dhingra will speak.
By Sophie Rose, Alliance News reporter
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