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(Alliance News) - European markets rallied on Friday, with miners leading the way on London's blue-chip index, as investors put rate hike worries to one side for now.
The FTSE 100 index closed up 89.01 points, 1.2%, at 7,351.07, adding 1.0% over the course of the week. The FTSE 250 ended up 309.74 points, 1.6%, at 19,188.03, ending the week 1.8% higher. The AIM All-Share closed up 11.24 points, 1.3%, at 880.60, gaining 1.7% this week.
The Cboe UK 100 ended up 1.4% at 735.94, the Cboe UK 250 closed up 1.7% at 16,536.44, and the Cboe Small Companies ended up 0.7% at 13,705.95.
"Investors have put the ECB hike and Powell's warning about more rate increases firmly behind them, and the rally of the past two days has gathered strength. While the broader bear market most likely has further to run, it looks like the next bear market rally has also kicked into action," IG analyst Chris Beauchamp commented.
In European equities on Friday, the CAC 40 in Paris ended up 1.6%, while the DAX 40 in Frankfurt ended up 1.4%.
After the ECB's historic rate hike on Thursday, and hawkish noise from Federal Reserve Chair Jerome Powell, the Bank of England was to take centre-stage next week.
The BoE on Friday said it has decided to postpone a meeting on interest rates due next Thursday by one week, following the death of Queen Elizabeth II. The decision will now come on Thursday, September 22.
Britain's longest serving monarch died at her Scottish home of Balmoral late on Thursday.
"UK investors will no doubt be feeling somewhat conflicted given the current events, and the BoE has followed the lead set by other institutions by postponing its rate increase. But otherwise it is very much business as usual, and next week will still see a significant focus on the UK with CPI and employment data, although it is unlikely to provide a real change in trend for sterling, which still looks to be on a downward path against the dollar," Beauchamp added.
The pound was quoted at USD1.1580 at the London equities close Friday, higher compared to USD1.1495 at the close on Thursday. Against the yen, the dollar was trading at JPY142.53, lower compared to JPY143.91 late Thursday.
The euro stood at USD1.003 at the European equities close Friday, rising from USD0.9961 at the same time on Thursday.
The EU executive pledged Friday to come up with unprecedented measures in the coming days to solve an energy price shock triggered by Russia's war on Ukraine, including a controversial gas price cap that could further anger the Kremlin.
Moscow's invasion has seen the price of natural gas hit record levels, throwing the EU economy into deep uncertainty, with all eyes on whether Russian President Vladimir Putin will cut off the flow entirely.
European energy ministers tasked the European Commission in Brussels to work through the weekend to draw up legal texts that will include emergency funding for consumers sinking under the weight of soaring bills.
The EU will table "unprecedented measures next week for an unprecedented situation", energy commissioner Kadri Simson said, after meeting the ministers.
In London, miners were among the best performing large-cap stocks, after data showed inflation in China was showing signs of slowing.
China's annual consumer inflation rate eased to 2.5% in August from 2.7% in July. Expectations, according to FXStreet, were for the rate to tick up to 2.8%. Producer prices grew 2.3% year-on-year in August, slowing from July's rise of 4.2% and undershooting expectations of 3.1%.
Anglo American closed up 4.9%, Antofagasta ended 3.4% higher and Glencore added 3.1%
In the FTSE 250, TI Fluid Systems added 4.8%, after Jefferies raised the automotive fluid storage, carrying and delivery systems firm to 'buy' from 'hold'.
Marketer of promotional merchandise 4imprint rose 5.7%, after Barclays raised its target price to 5,800p from 4,800p, maintaining its 'overweight' rating.
At the other end of the midcaps, Computacenter fell 6.7% after reporting disappointing interim results.
Pretax profit in the six months to June 30 fell 6.4% to GBP107.8 million from GBP115.2 million a year ago. The company pinned the drop on higher amortisation costs for past acquisitions and a difficult comparator from the year before.
Revenue grew 17% to GBP2.83 billion from GBP2.43 billion. However, the computer services company noted that revenue in the UK business decreased by 7.1% to GBP653.8 million from GBP703.4 million.
Despite the profit setback, the Hertfordshire, England-based firm upped its dividend to 22.1 pence per share, an increase of 31% from 16.9p. It said it remains "on track" to delivery on previous guidance for annual profit growth.
On AIM, music instrument seller Gear4Music shed 15%, after it lowered annual guidance. The firm said sales in July and August have been hampered by the cost of living crisis and hot weather across Europe.
Looking ahead, Gear4Music said that it now expects revenue in financial year 2023 to be around GBP155 million and earnings before interest, tax, depreciation and amortisation of around GBP9 million.
This is lower than the current consensus expectations, which anticipates revenue of GBP163.9 million and an Ebitda of GBP11.9 million.
Stocks in New York were higher at the London equities close, with the Dow Jones Industrial Average up 1.1%, the S&P 500 index up 1.3%, and the Nasdaq Composite up 1.9%.
Brent oil was quoted at USD91.75 a barrel at the London equities close Friday, up from USD88.99 late Thursday. Gold was quoted at USD1,715.81 an ounce, up from USD1,707.70.
In Monday's UK corporate calendar, London-based investment firm HgCapital Trust reports interim results.
The economic calendar for next week kicks off with UK gross domestic product figures at 0700 BST and a Germany IFO economist forecast at 1100 BST on Monday. The week picks up pace with US consumer inflation figures at 1330 BST Tuesday, and UK inflation numbers at 0700 BST on Wednesday.
Financial markets in China will be closed on Monday for the Mid-Autumn Festival.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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