UK’s FTSE 100 closed flat on Friday, with markets struggling to find direction as they head into the holiday weekend, while strong U.S economic data fanned fears of interest rates staying higher for longer.
The export-oriented FTSE 100 closed flat, while the domestically oriented FTSE 250 added 0.4%.
“Everything is just rebounding from quite a sharp selloff in the afternoon session yesterday,” said Patrick Armstrong, chief investment officer at Plurimi Wealth.
“Any news that comes out may not be that relevant due to the illiquid markets you get around holiday times. So the markets are really overreacting to small bits of news.”
FTSE 100 posts worst week in two months on recession fears
London stocks reversed course to fall on Thursday after data showed a resilient final estimate of third-quarter US gross domestic product and a still tight labour market, which stoked fears the US Federal Reserve would stick to its aggressive monetary policy stance.
The blue-chip FTSE 100 is set to end the year 1.2% higher, outperforming the pan-European STOXX 600 and S&P 500 , both down nearly 12% and 20% year-to-date, respectively.
“It’s mostly got to do with the composition of the underlying assets for the index, and so far for the year energy has held up the best,” said Daniela Hathorn, senior market analyst at Capital.com.
The energy sector closed the session up 0.5%, leading gains this year and set to end 2022 nearly 44% higher.
Meanwhile, data showed UK car production rose 5.7% in November, but remained below pre-pandemic levels as global chip shortages and supply-chain issues continued to hurt the sector.
The automobiles and auto parts index closed 0.4% higher, down more than 60% year-to-date.
Hurricane Energy Plc rose 2.6% after activist investor Crystal Amber Fund called for the removal of top management at the oil and gas company.
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