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(Alliance News) - London stocks were trading higher at midday on Friday, looking to end a volatile week on a bright note as markets brace for the week's final data hurdle: US retail sales.

The FTSE 100 index was up 45.07 points, or 0.7%, at midday 7,008.40 on Friday - at this level headed for loss of 1.7% for the week as a whole.

The mid-cap FTSE 250 index was up 164.26 points, or 0.7%, on Friday at 22,233.57. The AIM All-Share index was up 0.2% at 1,227.78.

The Cboe UK 100 index was up 0.7% at 699.07. The Cboe 250 was up 0.7% at 19,983.45, and the Cboe Small Companies flat at 14,923.18.

In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were up 0.7% and 0.6%, respectively, early afternoon on Friday.

"European have followed their US and Asian counterparts higher as sentiment finally picks up in the final day of a largely downbeat week of trade," said Joshua Mahony, senior market analyst at IG.

"A raft of inflation data releases has provided a constant undertone of fear, with a surge in PPI and CPI out of the US and China highlighting the theme that will dominate the months ahead," said Mahony. "Nonetheless, this has been something central bankers have warned us about, and for the time being this jump in prices can be explained away as representing the kind of transitory price movements predicted by the Fed."

The next data test for markets will be US retail sales due out at 1330 BST. Retail sales growth is expected to ease to just 1.0% in April, according to FXStreet, after a 9.7% surge in March.

March's reading got a stimulus boost as USD1,400 payments, which were part of US President Joe Biden's massive USD1.9 trillion fiscal aid package, were sent out to individuals.

"There's a good chance this month's retail sales number could come in ahead of forecasts as households continue spending those stimulus cheques," said Oanda analyst Sophie Griffiths.

Ahead of the figures, Wall Street was called higher. The Dow Jones was pointed up 0.4% and the S&P 500 up 0.6%. The Nasdaq Composite was set to jump 1.1%. The growth stock-rich index is down 4.6% so far this week.

The US dollar was soft against other major currencies ahead of the data.

Sterling was quoted at USD1.4057 on Friday, firm on USD1.4045 at the London equities close on Thursday.

UK government ministers are poised to order further action in response to the spread of the coronavirus variant dominant in India as new figures show cases have more than doubled in a week.

Data from Public Health England shows a rise in cases from 520 to 1,313 this week in the UK. One response being considered is bringing forward the date for a second dose of vaccine for eligible groups to increase protection.

UK Prime Minister Boris Johnson has not ruled out local lockdowns being necessary to contain the spread of the virus. He said the government was "anxious" about the variant - though said there was "nothing that dissuades me" from easing England's lockdown further on Monday.

Meanwhile, British holidaymakers hoping to jet off to Portugal as soon as UK travel restrictions lift are facing uncertainty after the Lisbon government decided to extend its "state of calamity" until at least May 30.

The euro traded at USD1.2109 midday Friday, rising from USD1.2071 late Thursday.

Against the yen, the dollar declined to JPY109.38 versus JPY109.60 late Thursday in London.

Japan expanded a coronavirus state of emergency Friday, just 10 weeks before the Olympics, as campaigners submitted a petition with more than 350,000 signatures calling for the Games to be scrapped.

Gold was quoted at USD1,832.67 an ounce on Friday, up from USD1,823.80 on Thursday as the precious metal benefited from the weaker dollar.

In London, Sage was helping to drive the FTSE 100 higher, shares up 3.5%, after the accounting software firm lifted its outlook for organic recurring revenue growth.

Revenue for the half-year to March 31 fell 4% to GBP937 million. Organic total revenue, meanwhile, rose 1.4% and organic recurring revenue was up 4.4%, underpinned by software subscription revenue growth of 11%.

Following the strong performance in the half, Sage said it now expects organic recurring revenue growth for the full-year to be towards the top end of its 3% to 5% guidance range. As previously guided, the organic operating margin is expected to be up to three percentage points below the 2020 financial year, reflecting "strategic investment" in the business.

Burberry was rebounding, up 2.1% after closing down 4.2% on Thursday. The luxury fashion house tumbled on Thursday after it warned of increased investment and a hit to margins, though it did post growth in fourth-quarter comparable store sales.

At the bottom of the blue-chip index on Friday at midday were miners, with Antofagasta down 2.5%, Rio Tinto down 2.1% and BHP Group down 1.5%.

"UK listed miners have come under some pressure in early trade, with commodity prices taking a hit," commented IG's Mahony.

Brent oil was trading at USD66.64 a barrel at midday, down from USD67.55 late Thursday.

At the top of the FTSE 250 was Sanne Group, shares rising 21% to 732 pence after rebuffing a GBP1.3 billion takeover offer.

Cinven early on Friday confirmed that it proposed a possible offer of 830 pence per share for Sanne, which was rejected. The 830p-per-share proposal was a 38% premium to Sanne's closing price on Thursday of 603.00p, and Sanne shareholders would have retained the right to receive a 9.9p-per-share final dividend.

The offer values all of Sanne, a provider of fund administration services to asset managers and companies, at GBP1.35 billion.

Sanne, in response, called the approach "opportunistic" and said it has rejected three unsolicited takeover proposals from Cinven in recent months. As a standalone company, Sanne benefits from high margins, unique technology, and high demand for its services, it said.

Shares in Man Group rose 3.6% after Exane BNP raised the active investment management firm to Outperform from Neutral

Besides US retail sales figures, the economic events calendar on Friday has European Central Bank meeting minutes at 1230 BST

By Lucy Heming; lucyheming@alliancenews.com

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