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LONDON (ALLIANCE NEWS) - Stocks in London closed up slightly higher after recouping early losses on Friday, although London-listed oil majors were hit by steep profit falls reported by international peers.

The FTSE 100 index closed up 0.1%, or 9.69 points, at 6,996.29. The blue-chip index ended the week as a whole up 0.3%. The FTSE 250 index ended up 0.4%, or 63.51 points, at 17,644.83. The mid-cap index ended up 1.6% over the week. The AIM ALL-Share closed flat at 823.05, ending up 0.5% for the week.

"Stocks managed to recoup early losses on Friday, gaining some comfort from a pause to the rout in government bond markets. The UK 10-year gilt yield hit a new post-Brexit high whilst the German 10-year bund yield rose to its highest since April on Friday," said Jasper Lawler, market analyst at CMC Markets.

The BATS UK 100 index closed up 0.2%, or 28.7 points, at 11,842.16, the BATS 250 ended up 0.4%, or 69.59 points, at 15,993.59, and the BATS Small Companies closed down 0.3%, or 29.06 points, at 10,908.82.

London's two largest oil and gas players still weighed on the FTSE 100, with BP and Royal Dutch Shell hit by reports of large profit falls from peers Exxon Mobil and Chevron, whilst French firm Total posted a poorly-received trading update.

Brent had managed to stay above the USD50 per barrel mark since October 3, but has dipped below USD50 in the last three consecutive days. BP closed down 0.8%, whilst Royal Dutch Shell 'A' shares and 'B' shares both closed down 0.9%.

"Cost-cutting and higher production helped French oil major Total beat earnings estimates. A 25% decline in profits compared to the same period last year shows the integrated oil firms are far from out of the woods, despite oil prices doubling from the lows this year," said Lawler.

"Total's results set the scene for earnings next week from BP and Royal Dutch Shell, both of whom have been restructuring to deal with the lower price of oil," Lawler added.

Brent oil was quoted at a USD50.205 barrel at the London equities close, compared to USD50.60 a barrel at the close on Thursday. At the close last Friday, Brent traded at USD51.62.

On Wall Street at the London close, the Dow Jones Industrials was up 0.2%, the S&P 500 was up 0.1% and the Nasdaq Composite was trading 0.2% lower. Still ahead in the US economic calendar, the Baker Hughes oil rig count is at 1800 BST.

US stocks were up at the London equities close, as new data further supported the possibility of the Federal Reserve upping interest rates. The gross domestic product price index reported an annualized rate of growth of 2.9%, ahead of the consensus forecast of 2.5% and up from the 1.4% previously reported. The US gross domestic product price index reported growth of 1.5% in the third quarter, slowing from 2.3% in the previous period, but also ahead of the 1.3% consensus estimate.

"The last time US GDP growth surged past two per cent the Federal Reserve raised interest rates. With today's numbers flying above that watermark, history may be about to repeat itself," said Paul Sirani, chief market analyst at brokerage Xtrade.

"The world's largest economy is being fuelled by a buoyant jobs market, strong levels of consumer spending and healthy trade. If the indicators continue to point upwards for the US then Fed Chair Janet Yellen will look to stop things boiling over," Sirani added. "Many believe that today's big bump in growth will assure a December rate rise, but with a US election just weeks away, nothing is certain."

Capital Economics agreed there could be a rate hike in December, but said it "wouldn't completely rule out the possibility of a surprise November rate hike". Dennis De Jong, managing director of foreign exchange broker UFX.com, however, said the Fed is likely to hold fire until December due to the upcoming presidential election on November 8.

In Europe, the French CAC 40 index in Paris ended up 0.3%, while the DAX 30 in Frankfurt closed down 0.2%.

The euro stood at USD1.09308 at the equities close, ending higher than the USD1.0915 seen at the close on Thursday.

Gold stood at USD1,267.40 an ounce at the equities close, compared to USD1,268.61 at the close on Thursday.

The pound suffered heavy losses on Friday morning after a high court judge in Northern Ireland dismissed the first legal challenge to Brexit, sinking to a low of USD1.2122 against the dollar following the news, before recovering slightly during the day.

At the London equities close the pound traded at USD1.2140, lower than the USD1.2176 seen at the close on Thursday.

International Consolidated Airlines was the best performer on the FTSE 100, closing up 4.9%. The company, which owns British Airways, Spanish carrier Iberia and Ireland's Aer Lingus, said it made a profit after tax of EUR1.48 billion in the nine months to the end of September, up from EUR1.18 billion a year earlier.

IAG Chief Executive Willie Walsh said its results for the third quarter were hit by a "very significant negative currency impact" following the depreciation of the pound in the wake of the UK's vote to leave the European Union, as well as continued disruption on its routes due to air traffic control strikes.

At the other end of the blue-chip index, state-backed lender Royal Bank of Scotland ended as one of the worst performers, closing down 1.5%. The stock had been up as much as 5.9% earlier in the day after it said its adjusted operating profit for the three months to September 30 rose 61% year-on-year to GBP1.33 billion, which Shore Capital analyst Gary Greenwood said came significantly ahead of the broker's estimate of GBP718.0 million and the consensus forecast of GBP734.0 million.

However, along with the underlying beat came a worrying outlook statement. RBS said that, in the current low interest rate and growth environment, it no longer expects to achieve its targeted cost to income ratio and returns targets by 2019, although it said it remains committed to the goals in the long-term.

The bank also now anticipates a restructuring charge of around GBP1.5 billion for the full 2016 year, as compared to previous guidance of GBP1.0 billion, as a result of additional Williams & Glyn-related costs.

Elementis led the mid-cap risers throughout the day and ended as the best performer, closing up 11%. The speciality chemicals company said it anticipates meeting market expectations for 2016, despite continued tough trading in its Chromium division.

Online takeaway platform Just Eat was the second best performer on the FTSE 250, closing up 5.8%, after Berenberg kept its Buy rating and upped its price target to 600.0 pence from 530.0p. Berenberg said the unseasonably warm weather which is expected to hit Just Eat's UK order rate is a temporary hindrance, and it believes any weakness in the stock because of this should be seen as a buying opportunity.

Elsewhere on the London Stock Exchange, iron ore pellet producer Ferrexpo ended the day down 15%. Shareholder Wigmore Investments sold off a 10.7% stake in the business for GBP69.0 million, a smaller chunk than the original 11.9% that was set to be sold. Wigmore retains a 13.% stake following the sale.

In the economic calendar on Monday, the UK's Gfk consumer confidence index is published at 0001 GMT, while Japan's Nikkei Manufacturing Purchasing Managers' Index is at 0030 GMT, followed by housing and construction data at 0500 GMT. German retail sales are due at 0700 GMT before data on UK consumer credit, mortgage approvals and M4 money supply come at 0930 GMT. The EU's Consumer Price Index will be published at 1000 GMT, with US personal spending figures following from 1230 GMT.

The UK corporate calendar for Monday is light. Advertising and marketing giant WPP publishes a trading statement. and Egyptian gold miner Centamin posts third quarter results.

By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance