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LONDON (Alliance News) - The FTSE 100 closed higher for the sixth consecutive day Friday, closing less than 100 points short of its 2014 opening level as investors shrugged off a host of weaker-than-expected UK and US data releases to ensure the global equity rally continues.
The FTSE 100 closed up 0.4% at 6,838.06, which means the blue-chip index has now ended the week higher than it started it for the third week in a row. The FTSE 250 closed up 0.6% at 16,460.88, while the AIM All-Share index snapped an 11-day winning streak closing down 0.2% at 881.6.
Positive sentiment was evident across the world Friday, with the CAC 40 in Paris closing up 0.6%, the DAX 30 in Frankfurt closing up 0.5%, and Asian equities closing broadly higher earlier in the day, with the excepted of the Shanghai Composite index.
In the US, at the close of the London equity market, the DJIA and S&P 500 are both up 0.3%, with the NASDAQ Composite up 0.4%.
British retail sales declined at the sharpest pace since 2012 in January, as food sales weakened noticeably after Christmas, data from the Office of National Statistics revealed. Retail sales volume, including automotive fuel, fell 1.5% month-on-month in January, which was the first decline in three months and the biggest since April 2012. Economists had expected the sales to fall by 1%, following a 2.5% rise in December.
Despite this, the latest decline has to be viewed in the context of the surge in sales in December and the very wet weather experienced in January, which will have deterred consumers from venturing to the shops, said James Knightley, economist at ING Bank NV.
Forex.com's research director Kathleen Brooks added: "The good news for British retailers is that despite this month-on-month fall, the quantity bought still remains strong, and the underlying trend in the data, suggested by the three month-on-three month growth rate for retail sales, actually increased by 1.1% in January, thus confirming strong momentum in consumption."
Nevertheless, food store sales slipped 3.4% in January, with non-food store sales gaining 0.4%.
In a separate report, released at the same time, UK public sector net borrowing declined by GBP6.43 billion in January, down from a revised GBP9.03 billion rise in December. Consensus expectations were for a fall to GBP9.00 billion.
The pound, which had been sold in the run-up to the data, jumped to regain its losses in the aftermath, before slipping again late in the day. At the close of the UK equity markets, sterling trades at EUR1.2123 and CHF1.4798.
The currency pushed even higher against the dollar later in the trading session as home sales data from the world's largest economy disappointed.
The National Association of Realtors revealed that sales of previously owned homes fell 5.1% in January to an annual rate of 4.62 million. Economists had expected the rate of sales to come in at 4.68 million, down 4.3%.
The data caused the dollar to drop against its major rivals, before it regained some of its strength later in the session. At the London stock market close, the pound trades at USD1.6641, the euro at USD1.3723, and the Swiss franc at USD1.1247.
At the individual stock level, Royal Bank of Scotland Group, closing up 1.8%, was among the leading gainers in the FTSE 100. The Financial Times quoted people familiar with the banks plans saying it is preparing a dramatic retrenchment that would see it become a much smaller UK retail and commercial bank. The restructuring will form part of a series of cost-cutting measures and disposals led by new Chief Executive Ross McEwan, and is expected to see staff numbers slashed by at least 30,000 in the coming years, the paper said.
Following the report, Shore Capital reiterated its Buy recommendation, saying that the move is likely to result in a, "smaller but more efficient, higher return and less risky bank."
The company was outperformed by Vodafone, however, which closed up 3%. US blue-chip Verizon Communications said Friday that it has completed its acquisition of Vodafone's 45% indirect interest in Verizon Wireless in a transaction valued at about USD130 billion. As previously announced, Verizon issued about 1.27 billion common shares to shareholders of Vodafone as the stock portion of the consideration for Vodafone's 45% indirect interest in Verizon Wireless.
GlaxoSmithKline, closing up 0.3%, was also a gainer after it said Incruse, a treatment for chronic obstructive pulmonary disease, had been recommended for marketing authorisation by the European Medicines Agency's committee for Medical Products for Human Use, a key step in getting approval for the drug.
In the FTSE 250, IP Group ended the day as the index's second-biggest gainer, up 3.7%. The group's share price jumped after it said that its portfolio company, Xeros Ltd, intends to float on AIM to raise funds to bring its patented polymer bead cleaning system to the laundry market.
Millennium & Copthorne Hotels, closing up 3.3%, was another of the index's biggest winners after it reported higher revenues and profits for 2013, even though the improvements were due to a one-off profit boost from its Glyndebourne property development in Singapore at the end of the fourth quarter, and it cautioned that its room refurbishment programme would continue to weigh on its results this year.
The group's revenue increased to the record level of GBP1.04 billion in 2013, due to a GBP273.7 million revenue boost from the Glyndebourne development in Singapore, with pretax profit rising to GBP263.6 million in the year, up from GBP171.3 million in 2012.
Meanwhile, in the AIM All-Share index, The Real Good Food Company closed down 26% after it said it is in a pricing dispute with Associated British Foods' British Sugar unit, a major supplier to Real Good Food's Napier Brown non-refining sugar distribution business.
The group has complained to the Office of Fair Trading that British Sugar is charging too much and abusing its dominant position in the UK sugar market. It said the dispute is unlikely to be quickly resolved and will weigh on its results this year and next.
In the data calendar Monday, German IFO business climate data are released at 0900 GMT, ahead of EU consumer price inflation data for January at 1000 GMT.
In the US, the Chicago Federal Reserve releases its national activity index at 1330 GMT. US Markit services PMI is released at 1358 GMT, with the Dallas Fed publishing the Texas manufacturing outlook survey at 1530 GMT.
In the corporate calendar, FTSE 100-constituent Bunzl is joined by FTSE 250-listed Bovis Homes and Hiscox in releasing full-year results for 2013 ahead of the London stock market open. The blue-chip index's largest company by market capitalization, HSBC Holdings, releases its full-year results at 0815 GMT.
Meanwhile, Associated British Foods releases a trading statement.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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