LONDON MARKET CLOSE: Stocks mixed amid growth, Delta variant concerns

(Alliance News) - Stocks in London ended mixed on Friday as investors continued to weigh global inflation fears, supply chain issues and the spread of the Covid-19 Delta variant which all continue to cast a shadow of the recovery effort.

The FTSE 100 index ended up just 4.73 points, or 0.1%, at 7,028.94. But for the whole of this week, the large-cap index lost 1.9%.

The mid-cap FTSE 250 index closed down 66.38 points, or 0.3%, at 23,733.56. It lost 2.0% this week.

The AIM All-Share index closed up 0.71 of a point, or 0.1%, at 1,296.56, shedding 0.9% this week.

The Cboe UK 100 index closed up 0.1% at 699.10. The Cboe 250 lost 0.2% at 21,539.40, and the Cboe Small Companies ended up 0.3% at 15,464.20.

In Paris, the CAC 40 stock index ended up 0.5%, while the DAX 30 in Frankfurt ended down 0.7%.

CMC Markets analyst Michael Hewson said: "European markets look set to end what has been another negative week on a mixed note, with both the FTSE 100 and DAX both finishing lower for the second week in succession. Today's more resilient tone has been largely driven by a rebound in basic resources and industrials, and has come in spite of a disappointing UK GDP number for July, which showed that economic activity almost stalled, due to a number of different issues, including the 'pingdemic' and shortages of materials."

In the FTSE 100, miners ended among the best performers with Antofagasta up 3.5%, Rio Tinto up 1.8%, Anglo American up 1.4%, Glencore up 1.2% and BHP up 1.1% on the back of higher metal prices.

In base metals, spot copper rose 1.0% to USD9,381.00 a tonne from USD9,280.00, while spot aluminium rallied to USD2,828.00 a tonne, up 1.2% from USD2,793.00.

"Nickel and aluminium continue to trade at seven and 13-year highs, respectively, both base metals hit by supply constraints," dealers at TreasuryOne said. These supply constraints come after a coup in Guinea.

At the other end of the large-caps, British Airways parent International Consolidated Airlines ended the worst performer, down 4.1%, amid sector-wide concerns.

In the FTSE 250, easyJet ended down 3.9%, extending 10% losses from Thursday after the budget airline had said it was planning to raise GBP1.2 billion in a fully underwritten rights issue.

Midcap peers Tui and Wizz Air closed down 4.0% and 3.9% respectively.

"Airlines continue to be in focus this week, with the sector hit hard once again today. Yesterday's easyJet fund raise does have investors on the back foot over the possibility that we will see competitors follow suit. Rising Delta cases in the US highlight the high likeliness that transatlantic tourism looks set to be on the backburner for some time yet," said IG Group's Josh Mahony.

The pound was quoted at USD1.3845 at the London equities close, firm from USD1.3840 at the same time on Thursday.

Sterling was still riding the wave of hawkish comments from Bank of England Governor Andrew Bailey earlier this week, in the face of weak UK economic data.

The UK economy grew at a much slower pace than expected in July and still sits more than 2% below pre-pandemic levels, data from the Office for National Statistics showed on Friday.

The ONS said the UK economy inched up 0.1% monthly in July, with growth slowing considerably from June's 1.0% climb. A GDP hike of 0.6% was expected, according to FXStreet cited consensus.

In the three months to July, the UK economy grew 3.6%

"Early impacts on the pound [from the data] appear to be small, as markets may have anticipated these figures, and instead remain focused on forward looking data that provides insight into how the UK could recover from the pandemic and grow," OFX said.

The euro stood at USD1.1828 at the European equities close, up from USD1.1815 late Thursday. Against the yen, the dollar was trading at JPY109.85, up from JPY109.78 late Thursday.

Stocks in New York were mixed at the London equities close as investors digested more data showing elevated inflation.

The DJIA was down 0.3%, the S&P 500 index down 0.2% and the Nasdaq Composite was up 0.1%.

US wholesale prices posted another record increase in August in the latest sign that increased demand coupled with supply and labour shortages were fuelling US inflation.

According to Bureau of Labor Statistics, producer prices jumped 8.3% annually in August, beating expectations of an 8.2% hike and following a 7.8% rise in July.

August's rise was the "largest advance since 12-month data were first calculated in November 2010," the bureau said.

Brent oil was quoted at USD72.67 a barrel at the equities close, down from USD72.91 at the close Thursday.

Gold was quoted at USD1,795.25 an ounce at the London equities close, firm against USD1,791.00 late Thursday.

The economic events calendar on Monday has Japan producer prices overnight.

The UK corporate calendar on Monday has a trading statement from Primark owner Associated British Foods. There are also interim results from construction firm Henry Boot and annual results from protein research tools company Abcam.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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