LONDON MARKET CLOSE: Stocks end week in optimistic mood

(Alliance News) - Stocks in Europe rallied on Friday, ending the week on the front foot, as investors prepare for the start of US earnings season, inflation readings from Germany, the US and UK and a rate decision from Europe's central bank in an action packed week.

"The FTSE 100's resilience is a welcome relief for UK investors. The index has bounced back from Thursday's ex-dividend driven fall, and with mining stocks leading the way it is back on course for the recent highs," Chris Beauchamp, chief market analyst at IG, said.

"European markets generally are doing well, recouping some losses, but with the outlook so uncertain thanks to inflation and the Ukraine war this mood of optimism is unlikely to last. Next week's ECB meeting will give investors more of a clue on how the central bank is looking at policy, even if no rate hikes are expected."

The FTSE 100 index closed up 117.75 points, or 1.5%, at 7,669.56 - ending the week up 1.6%. The mid-cap FTSE 250 index ended up 136.52 points, or 0.7%, at 21,174.32 on Friday, but lost 0.4% over the past 5 days. The AIM All-Share index closed up 5.17 points, or 0.5%, at 1,055.89 - finishing out the week up 1.0%.

The Cboe UK 100 index closed up 1.5% at 762.63. The Cboe 250 closed up 0.7% at 18,588.57, and the Cboe Small Companies closed up 1.0% at 15,496.12.

In mainland Europe, the CAC 40 in Paris was up 1.3%, while the DAX 40 in Frankfurt was up 1.5%.

AJ Bell Investment Director Russ Mould said: "Commodities firms and financial stocks, the latter boosted by expectations of faster rate hikes, helped lead the charge higher.

"Investors continue to wrestle with the challenges posed by rising interest rates and surging inflation with the latest data on wages in the UK offering an indication of how entrenched inflationary pressures are."

In London, Anglo American advanced 4.8%, Endeavour Mining 3.1% and Glencore gained 2.6%. While, Standard Chartered added 3.0%, Barclays 2.9%, and abrdn closed up 2.4%.

London's oil majors were also shifting the FTSE 100 higher, with energy prices rising following a new round of sanctions imposed on Russia. Brent was quoted at USD101.33 a barrel on Friday evening, up from USD99.08 a barrel Thursday evening.

Shell advanced 3.9% and BP gained 3.7%.

In the FTSE 250, CMC Markets ended the best performer on Friday, rising 13%, after the online trading company said it expects its annual profit to come at the upper end of forecasts after enjoying its "strongest quarter" of its financial year.

The London-based firm said its net operating income performance for the year ended March 31 will be a non-pandemic record. CMC saw a bump in fortunes during the pandemic amid market volatility.

CMC said the fourth quarter was the strongest quarter of if its financial year, pushing annual net operating income to the top end of guidance at around GBP280 million. This would represent a 32% fall from GBP409.8 million a year prior, a period boosted by the pandemic. Compared to financial 2020, net operating income is up 11% from GBP252.0 million.

Ferrexpo advanced 11%. The Ukraine-focused iron ore pellet producer said its operations are outside the main conflict zones, allowing it to continue operations and deliveries to key customers in Europe.

The Baar, Switzerland-headquartered firm reported total iron ore pellet production of 2.7 million tonnes in the first quarter of 2022, in line with the same period in 2021. However, iron ore pellet production fell 11% below the fourth quarter, due to operational and logistical constraints following Russia's invasion of Ukraine.

Ferrexpo noted that logistics pathways to Europe through rail and barge remain open, while activities at the Black Sea port of Pivdennyi continue to be suspended. Sales to customers in Europe represented roughly 50% of sales in the past.

888 Holdings gave back 6.3%, returning some of Thursday's sharp gains - when it closed 31% higher. On Thursday, the gambling firm raised cash to help fund its acquisition of some William Hill assets, also adding the purchase price of the deal has been cut.

In London's junior market, Sensyne Health plunged 79%% after the clinical artificial intelligence company warned that without further financing it will not be able to continue beyond this month.

While the firm said it has entered a non-binding term sheet for an additional GBP15 million in financing, it added that it may have to cancel its AIM listing.

"Shareholders' attention is specifically drawn to the proposed term to cancel the company's shares from trading on AIM and the highly dilutive impact of granting conversion rights to the Noteholders and the proposed change in exercise price of the warrants associated with the loan notes," the company said.

Chief Executive & Founder Paul Drayson stepped down from the board with immediate effect. He will be replaced by Alex Snow, former CEO of Landsdowne Partners UK.

In the US, Wall Street was mixed at the London equities close. The Dow Jones Industrial Average was up 0.6%, the S&P 500 up 0.1%, but the Nasdaq Composite was down 0.8%.

Gold stood at USD1,945.10 an ounce, firm against USD1,931.30 late Thursday.

The dollar continued its strong showing on Friday. IG's Beauchamp said: "It's all go for the greenback once again. After some hesitation in March the dollar appears to have rediscovered its forward momentum. Further Fed tightening seems to be the only sure thing around at the moment, and with CPI next week likely to deliver another surge in prices there is plenty of rationale to stick with long dollar trades it seems."

The pound was quoted at USD1.3020 Friday evening, down from USD1.3057 at the London equities close Thursday.

The euro was priced at USD1.0875, down from USD1.0900. Against the yen, the dollar was trading at JPY124.33 in London, up from JPY123.85.

In the international economics events calendar next week, there is consumer inflation figures from Germany and the US on Tuesday, followed by inflation data from the UK on Wednesday. The headline event, however, will be the European Central Bank rate decision on Thursday afternoon.

Also, next week will be a shortened trading week for most countries, due to Good Friday.

In a quiet local corporate calendar on Monday, there is full-year results from Tortilla Mexican Grill and a trading statement from Sirius Real Estate.

In the US, earnings season kicks off next week with first quarter results due from JPMorgan Chase, Wells Fargo, Citigroup, Morgan Stanley and Goldman Sachs.

By Paul McGowan; paulmcgowan@alliancenews.com

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