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LONDON (Alliance News) - London stock markets closed higher Friday, while the dollar appreciated against other major currencies after US core inflation rose by more than expected.

The FTSE 100 ended up 0.3% at 7,031.72, completing its fifth successive session of gains. The blue-chip index rose 1.0% over the course of the week. The FTSE 250 closed up 0.2% at 18,192.69, having touched a new record intraday high of 18,248.04. The AIM All-Share ended up 0.4% at 766.71.

In Europe, the CAC 40 in Paris ended down 0.1% and the DAX 30 ended down 0.4%.

The strong dollar was holding back US stock indices. When the London equity markets closed, the DJIA was down 0.3%, the S&P 500 was down 0.2%, while the Nasdaq Composite was flat.

Consumer prices in the US rose in line with economists' estimates in April, although there was a bigger-than-expected increase in core prices. The Labor Department said its consumer price index inched up by 0.1% in April after rising by 0.2% in each of the two previous months. The modest increase matched economist estimates.

The core consumer price index, which excludes food and energy prices, rose by 0.3% in April following two consecutive 0.2% monthly increases. The increase in core consumer prices exceeded the 0.1% uptick that was anticipated by economists.

"The increase in core CPI has been the most significant figure this Friday; stripped of the volatility of oil the USA's inflation figures appear to be stable at worst, and improving at best. Such stability could be a platform for the Fed to raise rates; the question is now whether it is stable enough," said Connor Campbell, financial analyst at Spreadex.

"With a June hike ruled out, September has become the date to focus on: hawks now have a sign that US inflation is on its way back to the targeted 2%; doves, on the other hand, still have the cavalcade of weak US data, especially in the jobs sector, to point to," Campbell added.

Investors will be tuning in to Fed Chair Janet Yellen's speech at 1800 BST for more insight into the Fed's thinking.

The pound hit an intraday low against the dollar of USD1.5485, while the euro hit a low of USD1.1001, its lowest level in over three weeks.

In the London equity markets, Vodafone Group was the best-performing stock, closing up 4.6% after hitting its highest price since December 2000, as speculation surrounding a potential takeover by Liberty Global and a break-up of its operations continues.

"Vodafone shareholders tend to be a cautious bunch, but will undoubtedly be pleased to have seen their investment grow by 8% this week as merger reports swirl around the company. A successful outcome to any discussions would signal that big M&A is back on the agenda, after a relatively quiet period following the end of ‘tax inversion’ deals being pursued by US firms," said Chris Beauchamp, senior market analyst at IG.

Severn Trent closed down 0.4% after it said its pretax profit more than halved in the last financial year due to losses on financial instruments. It said its pretax profit for the year ended March 31 more than halved to GBP148.2 million from GBP318.9 million a year earlier. However, excluding exceptional items and losses on financial instruments, profit rose to GBP300.4 million from GBP276.1 million as revenue climbed to GBP1.80 billion from GBP1.75 billion. Revenue missed analysts' expectations by around GBP80 million whilst pretax profit excluding exceptional items beat expectations of GBP285.0 million.

Shares in Plus500 closed down 35%, after it resumed trading on the AIM All-Share index as the contracts-for-difference trading platform provider continues to go through anti-money laundering procedures that have resulted in the freezing of client accounts in the UK.

Plus500 said the FCA required it to appoint a "skilled person" to review its anti-money laundering and financial sanction systems, as well as other related regulatory control, on January 9. That review finished last week and the UK unit was prohibited from conducting all transactions for customers without the appropriate anti-money laundering documentation. Chief Executive Gal Haber said the company is doing everything in its power to resolve the issues.

Amur Minerals ended as the best performer in the index, up 85%, after it said it has finally been awarded its long-awaited production license for the Kun Manie nickel-copper sulphide deposit in the far-east of Russia. The government of Russian Prime Minister Dmitry Medvedev approved the company's detailed exploration and mine production plan, which in turn led to the Ministry of Natural Resources issuing the production license.

In the economic calendar Tuesday, the Confederation of British Industry's Distributive Trades Survey at 1100 BST, US durable goods orders at 1330 BST. US housing price index is at 1400 BST before consumer confidence and new house sales at 1500 BST.

In the UK corporate calendar cinema chain Cineworld Group and software developer Micro Focus International both issue trading statements. Industrial chains and power transmission products supplier Renold reports full-year results, as does Minds + Machines Group.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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