(Alliance News) - London's FTSE 100 fell in early dealings but is on track to post a weekly gain, while other stock markets were largely on the up on Friday in a sign investors are "comfortable" with central bank efforts to slow inflation.
The FTSE 100 index was down 17.13 points at 7,547.79 early Friday. The large-cap index was being curbed by a stronger pound in early trade, but is 2.1% higher so far this week.
The pound was quoted at USD1.2622 early Friday in London, up from USD1.2580 at the London equities close on Thursday.
The mid-cap FTSE 250 index was down 15.09 points, or 0.1%, at 20,233.65. The AIM All-Share index was up just 0.26 of a point at 958.26.
The Cboe UK 100 index was down 0.3% at 751.91. The Cboe 250 was down 0.2% at 17,980.77, and the Cboe Small Companies was 0.1% lower at 14,620.41.
In mainland Europe, the CAC 40 in Paris and the DAX 40 in Frankfurt rose 0.4% early Friday.
In Tokyo on Friday, the Nikkei 225 ended up 0.7%. The Shanghai Composite ended 0.2% higher, while the Hang Seng in Hong Kong was up 2.2% in late trade. The S&P/ASX 200 added 1.1%.
The Dow Jones Industrial Average finished up 1.6%, the S&P 500 up 2.0% and the Nasdaq Composite up 2.7%.
Worries about inflation have stifled equity markets so far this year, as have fears of the monetary policy tightening required to get it back under control.
Interactive Investor analyst Richard Hunter, however, said markets are showing signs they are now less unsettled by central bank moves.
"After a torrid few months, there are some tentative signs of green shoots emerging as investors become more comfortable with the stance of the central banks in tackling inflation," Hunter said.
"The recent Federal Reserve minutes confirmed that further hikes in June and July were on the table, but that it would remain flexible thereafter. This has provided something of a relief rally to investors on two fronts, the first of which being that the statement could signal a pause in rate hikes in the autumn. At the same time, there is also the possibility that the Fed's hawkish stance has now been fully priced in to markets, which could signal the return of some opportunistic buying."
He added: "In early trade, the UK has apparently not received the memo on this improving sentiment, with a largely flat opening. The spectre of inflation remains a concern, with the announced measures from the government to provide support for struggling households coming to some extent at the expense of the oil majors. Wider concerns on whether this could jeopardise plans for further wholesale investment in the UK remains to be seen, even though the shorter term impact should be positive for the economy overall."
Market focus on Friday will be on the US personal consumption expenditure price data at 1330 BST. The core index reading is the Fed's preferred gauge of inflation.
According to FXStreet-cited consensus, annual PCE inflation is expected to be stable at 6.6% in April. Core PCE inflation is forecast to slow to 4.9% from 5.2%.
Ahead of the data, the dollar was weaker. The euro rose to USD1.0742 early Friday from USD1.0725 late Thursday in London. Against the yen, the dollar was trading at JPY126.18, fading from JPY127.37.
In the FTSE 100, stocks were reacting to the UK chancellor's announcements on Thursday of support for households suffering from higher energy prices, paid for with a windfall tax on energy companies.
Athleisure firm JD Sports added 1.7%. Retail stocks were among the best performers on Thursday on the notion that UK consumers will have more disposable income available in the wake of the chancellor's cost-of-living support package.
Leisure stocks also were largely on the up, boosted by the cost-of-living support. Ten pin bowling operator Hollywood Bowl was 3.1% higher, while Gym Group added 2.0%.
Conversely power utility SSE was down 2.9%.
Elsewhere, postal service operator Royal Mail was 0.9% lower. Bernstein cut the stock to 'market-perform' from 'outperform'.
Among London mid-caps. Moonpig was down 8.2%, the greetings card seller surrendering some of its chunky weekly gain. Sentiment in the stock has been on the up this week, as the market hailed its foray into physical and experiential gifts.
So far this week, Moonpig has advanced 6.3%.
On AIM, Advance Energy tumbled 24%, one of the junior market's worst performers.
The company said a production sharing contract will lapse, turning the energy firm into a cash shell, under AIM rules.
Carnarvon Petroleum Timor has opted against entering the next period of the TL-SO-T 19-14 production sharing contract, which Advance calls the Buffalo licence. It is located in southeast Asian nation East Timor.
"As a consequence the Buffalo licence will lapse on 27 May 2022, and the company will become an AIM Rule 15 cash shell on that date," Advance said.
It now has six months to make an acquisition that constitutes as a reverse takeover. Or it can become an investing company, requiring the raising of at least GBP6 million.
Should it do neither, shares will be suspended, and then potentially cancelled six months later.
Prior to becoming a cash shell, Advance aimed to grow "through acquisition or farm-in to non-operated interests in discovered upstream projects".
Brent oil quoted at USD117.06 a barrel early Friday in London, flat from USD117.05 late Thursday. Gold stood at USD1,857.91 an ounce, up from USD1,846.75.
By Eric Cunha; ericcunha@alliancenews.com
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