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LONDON (Alliance News) - The FTSE 100 index of the largest companies listed in London closed higher on Friday, after US retail sales data for April beat expectations and helped to spark a rebound from earlier losses on fears the UK economy could face recession in the event of a vote to leave the European Union.

The FTSE 100 ended up 0.6%, or 34.31 points, at 6,138.5, having fallen as low as 6,060.10, after both the Bank of England and the International Monetary Fund warned that the UK could risk recession by voting to leave the EU. The UK's June 23 referendum is just weeks away.

The FTSE 250 closed down 0.1%, or 9.57 points, at 16,650.30, and the AIM All-Share fell 0.1%, or 0.58 point, to end at 724.49. In Paris, the CAC 40 index closed up 0.6%, while the DAX 30 in Frankfurt finished up 0.9%.

US shares were mixed at the London close, with the Dow Jones Industrial Average and the S&P 500 both down 0.1% and the Nasdaq Composite up 0.3%.

"There has been a notable, if hard to justify, shift in sentiment this Friday afternoon, the European markets especially overcoming their early gloominess to get themselves near where they were at the start of the week," Connor Campbell, financial analyst at Spreadex, said.

Most of that positive boost came from the US, Campbell said, even with US stocks struggling to match the increase in European markets, after the country's retail sales rebounded more than expected in April, boosting hopes that economic growth is gathering pace.

Data from the Commerce Department showed that US retail sales grew by 1.3% in April, beating the 0.9% rate that had been expected by economists, and bouncing back from an unexpected 0.3% fall in March.

At the London equities close, the pound was at USD1.4353, down from USD1.4476 the same stage on Thursday, as the greenback advanced in the wake of the US retail sales data. The euro traded at USD1.1283, down from USD1.139 at the equities close Thursday.

Gold was quoted at USD1,269.64 an ounce at the London equities close, up from USD1,268.22 the same stage on Thursday. Brent oil was quoted at USD47.85 a barrel at the London equities close, up from USD47.025 a barrel on Thursday.

The strongest risers in the FTSE 100 included supermarkets Tesco, up 3.9%, WM Morrison, up 1.6%, and J Sainsbury, up 1.1%.

Banks were also among the stocks moving higher, with Emerging markets-focused Standard Chartered, up 2.5%, joined by Barclays, up 1.5%, state-backed lender Lloyds, up 2.3%, and subprime lender Provident Financial, up 1.9%.

Chris Beauchamp, senior market analyst at IG, said the strength seen in financial stocks "might be considered odd" in the wake of the warnings on Brexit issued by the Bank of England and the IMF. "IG's binary continues however to point to a victory for 'Remain', with clients putting the chance of a Brexit at around 29%," Beauchamp said.

Coca-Cola HBC, the soft drinks bottler, closed down 3.5%, among the heaviest fallers in the blue-chip index. The company's first-quarter update was slightly behind what the market had expected, according to analysts at Shore Capital. Coca-Cola said total volumes grew 0.1% in the three months ended March 31, as growth in developing and emerging markets was partly offset by a fall in established markets, while net sales revenue fell by 2.7% to EUR1.32 billion.

The company said it saw "good growth" in Nigeria, Romania and Poland, which offset a weak performance in Russia, with premium sparkling brands, water and energy drinks performing well.

"We are encouraged by the ongoing volume growth in emerging and developing markets and the improving underlying trend in established markets. While soft in the quarter, pricing trends in developing markets are improving. We are confident we have the right initiatives in place to continue our progress in the remainder of the year," Chief Executive Officer Dimitris Lois said in a statement.

Inmarsat, the satellite company, fell 6.0% to 746.20p, closing above its low on the day of 728.5p. Berenberg said the reason for the losses seen on Friday was a read-across from peer Eutelsat results. The French satellite operator said its revenue growth in the third quarter was below expectations and now expects full year to be broadly flat.

"With Inmarsat citing timing of revenue ramp rather than structural issues for its recent guidance cut, we see increased risk to both the 2018 and five-year guidance," Berenberg said.

ITV, the UK broadcaster, was left nursing a 2.1% drop in its share price after analysts at no fewer than seven investment banks cut their price targets. UBS, Barclays, Deutsche Bank, Kepler Cheuvreux, JPMorgan, Citigroup, and Exane BNP all cut their price targets on the stock. On Thursday, ITV struck a lukewarm tone on its outlook for advertising due to uncertainty surrounding the upcoming EU referendum.

In the FTSE 250, Micro Focus International ended down 3.6%. Wizard, which is owned by Francisco Partners, Golden Gate Capital, Thoma Bravo LLC and Elliott Management Corp, sold most of its stake in the software company through a share placing, raising GBP362.0 million, according to Numis Securities.

Wizard sold 24.1 million Micro Focus shares, equivalent to an 11% stake, at 1,505.00p. The sale of the shares, which was conducted by Numis and Credit Suisse, leaves Wizard with a 2.6% stake in Micro Focus.

Wizard came to own about 40% of Micro Focus when it sold Houston, Texas-based Attachmate Inc to the company in September 2014.

In the economic calendar, Saturday will bring money supply, new loans, retail sales industrial production and urban investment data from China. On Monday, UK house price index is due from Rightmove, with the Japanese Domestic Corporate Goods Price Index due at 0050 BST.

Germany's Buba Monthly Report is due at 1100 BST, followed by the NY Empire State Manufacturing Index from the US at 1330 NST and the NAHB Housing Market Index at 1500.

In the UK corporate calendar, FTSE 100 property company British Land reports full-year earnings, while Crest Nicholson issues a trading statement. ICAP, the FTSE 250 markets operator, reports full-year results.

Diploma, Lonmin and Victrex report first-half results. e2v Technology reports full-year results, as do Union Jack Oil and Braemar Shipping. Avanti Communications Group issues a trading statement.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

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