LONDON (Alliance News) - Shares ended higher in London on Friday, pushed up by oil stocks as the price of the commodity rose, with UK investors now preparing for a long weekend that will see central bankers attend the last day of the Jackson Hole Symposium in the US.
The FTSE 100 ended up 0.9% at 6,247.94, but fell by 1.9% in the whole week, and by 4.0% in August. The FTSE 250 ended up 1.1% at 17,106.36, down 0.9% for the month. Meanwhile, the AIM All-Share was up 1.1% at 734.85.
In Europe, major indices were down Friday, with the CAC 40 in Paris up 0.4% and the DAX 30 in Frankfurt down 0.2%.
At the London Close, Wall Street was mixed after enjoying a two-day rebound that came after several sessions of loses. The DJIA was down 0.3%, the S&P 500 was down 0.1% and the Nasdaq Composite was up 0.1%.
Meanwhile, Asian major indices were mixed Friday, with the Japanese Nikkei 225 ending up 3.0%. In China, the Hang Seng fell 1.0%, but the Shanghai Composite closed up 4.8%.
It was a volatile week for stocks around the world. Investors faced ongoing uncertainty in China, where the People's Bank of China continued its attempts to reverse the continued falls in the country's stock market and support its slowing economy by cutting key interest and deposit rates.
An injection of CNY140 billion into the financial system through the PBoC's short-term liquidity operations facility on Wednesday was, according to Reuters, followed by another CNY60 billion on Friday.
The moves made by China's central bank have forced analysts to change their view on when the US Federal Reserve will raise rates, with many now expecting an increase in December rather than the previously anticipated "lift-off" in September. Over the course of the week, several Fed officials suggested there is now less likelihood of a rate hike at the September 16-17 Federal Open Market Committee meeting.
Atlanta Federal Reserve President Dennis Lockhart kicked off the week when he said on Monday that he expected the normalisation of monetary policy to begin sometime this year. Earlier this month he had said that a September rate hike was "appropriate".
Market participants seemed to become more convinced over the timing of a rate hike when New York Federal Reserve President William Dudley said Wednesday that a "lift-off" in September appeared "less compelling" to him than it had a few weeks ago.
Investors will now focus on the Jackson Hole Symposium, which started on Thursday, where speeches from Fed Vice-Chairman Stanley Fischer, European Central Bank Vice-President Vitor Constancio and Bank of England Governor Mark Carney will grab the market's attention on Saturday, though US Fed Chair Janet Yellen is not expected to attend.
After strong US gross domestic product and initial US jobless claims data released this week, the US Commerce Department released a report on Friday showing that US personal income increased in line with economist estimates in July, but also showed that personal spending rose by slightly less than expected.
The report said personal income rose by 0.4% in July, matching the increases seen in the three previous months as well as the consensus estimate. Personal spending increased by 0.3% for the second consecutive month, behind economists' expectations of a 0.4% climb in spending.
Meanwhile, the University of Michigan released a report on Friday showing a bigger than previously estimated drop in US consumer sentiment in the month of August. The report said the final reading on the consumer sentiment index for August came in at 91.9 compared to the preliminary reading of 92.9. Economists had expected the index to be upwardly revised to 93.0.
In the UK, the economy grew at a faster pace in the second quarter, in line with initial estimates, latest figures from the Office for National Statistics showed Friday.
Gross domestic product advanced 0.7% quarter-on-quarter in the second quarter, confirming the flash data. In the first quarter, the economy expanded 0.4%. On an annual basis, GDP growth eased to 2.6% in the three months ended June from 2.9% in the preceding quarter. The figures came in line with the preliminary report.
"Given the panic in the financial markets in the last couple of weeks it's tempting to think that something very serious is going on and in the UK we should be worried. At the moment, these concerns are somewhat overstated," said Kallum Pickering, senior UK economist at Berenberg.
"The UK's domestic health is good, and it's key neighbours - namely the US and Europe - are showing solid improvements. Therefore, the UK is well placed to brace headwinds from afar and we forecast growth of 2.6% per annum over the next two years," wrote Pickering.
The pound slightly retreated after the data and was standing at USD1.5362, having traded at USD1.5408 prior to it.
On the London Stock Exchange, oil-related stocks were amongst the best performers in the FTSE 100 and the FTSE 250, benefiting from a jump in Brent and West Texas Intermediate crude oil prices overnight. BG Group ended up 3.2%, Royal Dutch Shell 'B' up 2.8% and BP up 2.6%. Meanwhile, Tullow Oil closed up 6.6% and Hunting up 3.5%.
Brent oil was at USD49.35 a barrel, having traded at USD45.81 a barrel at the London close on Thursday, while WTI was at USD44.42 a barrel, having traded at USD41.92 a barrel when European markets closed.
But the best blue-chip perfomer was Inmarsat, up 3.5%, after its third satellite in the Global Xpress network was successfully launched in Kazakhstan. The new satellite is needed to complete the roll-out of Inmarsat GBP1 billion next-generation telecommunications network and will allow the company to offer its customers faster connections at a lower cost.
In the FTSE 250, Marshalls closed up 5.9%. The landscape products company said its pretax profit leaped in the first half of 2015 on the back of better revenue and improved margins. It said its pretax profit in the six months to the end of June was up to GBP20.8 million, compared to a GBP14.0 million profit a year earlier, a 48% rise. The group's revenue rose to GBP199.1 million from GBP180.0 million and its operating margin improved to 11.1% from 8.7% a year earlier.
Debenhams, down 6.6%, was the biggest mid-cap faller after being downgraded to Sell from Neutral by UBS, as the bank said the buying intentions of the department store's customers have declined.
Meanwhile, Go-Ahead Group was down 1.9% after JP Morgan downgraded the transport company to Neutral from Overweight.
In the UK corporate calendar Tuesday, STM Group release half-year results, Energy Assets publish an AGM trading statement and Punch Taverns issue a trading statement.
In the economic calendar Monday, eurozone consumer price index is expected at 1000 BST, while in the US, the Chicago Purchasing Manager's index is due at 1445 BST.
Meanwhile, on Tuesday's economic calendar, Chinese non-manufacturing PMI is due at 0200 BST, while Caixin China Services and Manufacturing PMIs are due at 0245 BST. Markit manufacturing PMIs for Germany and the eurozone are expected at 0855 BST and 0900 BST, respectively. UK Mortgage approvals are due at 0930 BST, while Markit manufacturing PMI for the UK is due at 0930 BST.
In the US, the redbook index is due at 1355 BST. Markit manufacturing PMI for the US is due at 1445 BST, and ISM manufacturing PMI is due at 1500 BST. US construction spending is due at 1500 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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Tullow Oil (TLW)
Hunting (HTG)
BP (BP.)
Marshalls (MSLH)