The FTSE 100 rose on Friday, with gains in energy and defensive shares offsetting weakness in retail stocks as Black Friday sales began against a backdrop of a worsening cost-of-living crisis.
The blue-chip FTSE 100 rose 0.3%, set to end with weekly gains of 1.4% on hopes of smaller rate hikes from the U.S. Federal Reserve.
REITS and homebuilders fell the most in morning trade, while residential property services provider LSL Property Services was down 11.5% after flagging a bleak fiscal 2022 outlook.
Berenberg does not expect the trough in UK homebuilders’ earnings to occur until 2024, the brokerage said in a note on Friday, reiterating its cautious view on the sector.
Retail stocks dropped 0.3% on Black Friday, which typically marks the beginning of the holiday shopping season.
“Britons are expected to spend 8.7 bln pounds over the Black Friday weekend, but there’s a very real chance the cost-of-living crisis will dampen sales,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
“There’s a broader awareness these days that not all Black Friday deals are great value, meaning the sale-factor might not be enough to pull in struggling consumers.”
UK markets have recovered sharply from their October lows, when a botched mini-budget roiled investor sentiment, with the FTSE 100 hovering near two-month highs as new government leadership tries to restore confidence in the British economy.
Energy stocks were a bright spot, gaining 1.3% on higher oil prices.
The domestically focussed FTSE 250 midcap slid 0.4%, but the index is on track for a gain of nearly 1% on the week.
Among individual stocks, Devro jumped 60.2% after Saria Nederland B.V. agreed to acquire the collagen casings maker in a deal valued at about 540 million pounds.
Man Group lost 1.6% after UBS cut the investment manager’s rating to “neutral” from “buy”.