LONDON MARKET CLOSE: Stocks close out rollercoaster week with losses

(Alliance News) - Stocks in London ended a volatile week on a downbeat note, with investors digesting a hawkish US Federal Reserve meeting and looking ahead to a likely interest rate hike from the Bank of England next week.

The FTSE 100 index closed down 88.24 points, or 1.2%, at 7,466.07 on Friday, falling 0.4% over the course of the week.

The FTSE 250 ended down 211.27 points, or 1.0%, at 21,643.30, down 2.8% for the week-to-date, and the AIM All-Share closed down 4.13 points, or 0.4%, at 1,082.51, finishing the week overall 4.4% lower.

The Cboe UK 100 ended down 1.1% at 742.35, the Cboe UK 250 closed down 0.7% at 19,470.10, and the Cboe Small Companies ended down 0.5% at 15,453.57.

In European equities on Friday, the CAC 40 in Paris ended down 0.8% and the DAX 40 in Frankfurt ended down 1.3%.

"After the strong gains of yesterday, European markets have slipped back heading into the weekend, with the FTSE100 slipping back into negative territory for the week, ending with a slightly more defensive posture, as telecoms and utilities outperform," said Michael Hewson, chief market analyst at CMC Markets.

Telecommunications firms BT and Vodafone ended up 1.8% and 1.2% respectively.

"This week's gyrations appear to be symptomatic of a market that is struggling to look through the consequences of central banks who are more concerned about containing increased inflation risk, than they are with supporting economic growth. When you throw geopolitics into the mix in the form of conflict risk in eastern Europe, and you have a heady cocktail of risks," Hewson added.

Germany's DAX bore the brunt of Friday's losses after data showed the country's economy contracted in the final months of 2021.

On an annual basis, gross domestic product grew 1.4% in the final three months of 2021, slowing from growth of 2.9% posted in the third quarter. The fourth-quarter annual increase missed market consensus, cited by FXStreet, of 1.8% growth.

However, on a quarterly basis, German GDP fell 0.7% in the three months to December 31 from the three months to September 30, having grown by 1.7% in the third quarter from the second. The figure missed forecasts for a contraction of 0.3%.

The euro stood at USD1.1163 at the European equities close Friday, struggling against USD1.1152 at the same time on Thursday.

Sterling advanced, meanwhile. The pound was quoted at USD1.3422 at the London equities close Friday, higher compared to USD1.3393 at the close on Thursday.

The pound was higher as investors switch focus from a hawkish Federal Reserve and look towards a likely interest rate hike from the Bank of England next Thursday.

"While the ECB and RBA are unlikely to make policy changes, the Bank of England is expected to hike interest rates 25 basis points on Thursday, as it looks to tighten policy for the second time in less than two months," said Fawad Razaqzada, market analyst at ThinkMarkets.

Against the yen, the dollar was trading at JPY115.18, down compared to JPY115.42 late Thursday.

Brent oil was quoted at USD90.59 a barrel at the London equities close Friday, up from USD89.88 late Thursday.

In New York, volatility was continuing into the end of the week, with the Dow Jones up 0.1% in morning trade on Friday, the S&P 500 index up 0.9%, and the Nasdaq Composite up 1.6%.

Boosting the Nasdaq was tech heavyweight Apple, shares soaring 5.7% after reporting a strong start to its financial year.

For the three months ended December 25, net income rose 20% to USD34.63 billion from USD28.76 billion the same period a year before. This was on sales which continued to break records, growing 11% year-on-year to USD123.95 billion from USD111.44 billion, also beating market forecasts of sales amounting to USD119.0 billion.

In London, online grocer Ocado finished at the bottom of the FTSE 100, down 7.6%. Ocado said its ongoing legal battle with US rival Autostore Technology has been put on hold by a German court after questions were raised over the action.

Munich District Court suspended proceedings brought by Ocado for an order to block the sale of AutoStore's B1 robot in Germany, amid concerns about Ocado's intellectual property rights. The court considered that, despite Ocado having made significant last-minute amendments to the claims for its utility models, they are likely to be invalid.

It said this is because the claims are seeking to cover more than had been disclosed in the application for the utility models as originally filed, and told Ocado it is trying to make a claim over technology it did not invent.

Miner Polymetal International ended down 4.2% amid weak prices for precious metals. Gold was quoted at USD1,784.78 an ounce at the London equities close Friday against USD1,794.49 at the close on Thursday.

Phoenix Group Holdings fell 2.8% after abrdn confirmed it sold 40.0 million shares in the insurer for GBP264 million.

The shares were sold at 660 pence per share, and the total sale represents a 4% stake in Phoenix. Plans for the sale were first announced late Thursday. abrdn said it intends to return the cash to its shareholders, with the timing of the return to be announced after the company's results on March 1.

Abrdn shares ended 1.6% higher.

Convatec rose 3.1% in the FTSE 250 after agreeing to acquire US-focused medical device company Triad Life Sciences for USD125 million. The acquisition, therefore, serves as an entry into the "rapidly-growing" wound biologics segment for ConvaTec, a Reading, Berkshire-headquartered medical products and technologies firm.

Oxford Biomedica fell 10% after agreeing to acquire a majority ownership in a newly formed business in the US focused on adeno-associated viruses which are known infect humans and other primates.

The Oxford-based gene and cell therapy company said it has agreed with Massachusetts-based genetic medicines company Homology Medicines Inc to acquire an 80% ownership interest in the newly formed Oxford Biomedica Solutions for USD175 million. Homology will hold the remaining 20% ownership.

Oxford Biomedica added that it will raise total gross proceeds of GBP80 million through an initial issue of 4.9 million shares at 50 pence per share, plus the issue of additional shares at a later date to make up the rest. The net proceeds will fund the company's existing capital requirements, cover the expenses of the transaction and provide additional working capital for the group.

Elsewhere in London, Sabre Insurance rose 12% after signing a new contract to provide taxi underwriting services to Freeway Insurance Services. The Surrey, England-based motor insurance underwriters said it has become the exclusive underwriter for policies issued by Freeway's managing general agent for five years from March 1, 2022.

Monday's UK corporate calendar has a trading statement from Evraz and full-year results from Porvair and Sthree.

The economic calendar on Monday has eurozone gross domestic product at 1000 GMT and German inflation at 1300 GMT. Stock markets in China will be shut next week to celebrate Chinese new year.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2022 Alliance News Limited. All Rights Reserved.