Wall Street mixed as FTSE 100 touches four-year high

FTSE  Traders work on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., January 5, 2023. REUTERS/Andrew Kelly
Wall Street and FTSE 100 are moving in opposite directions this Friday. Photo: Andrew Kelly/Reuters (Andrew Kelly / reuters)

The FTSE 100 and European stocks closed higher this Friday with the surprise in UK GDP in November and cooling inflation in the US yesterday lifting the mood.

The FTSE 100 (^FTSE) rose 0.65% to close at 7,845 , while the CAC 40 (^FCHI) in Paris climbed 0.69% to 7,023 points. In Germany, the DAX (^GDAXI) advanced 0.23% to 15,092.

Across the pond, stocks were mixed as Wall Street's biggest banks stockpiled more rainy-day funds to prepare for a possible recession ahead and reported weak investment banking results

The Dow Jones (^DJI) gained 0.16% to 34,243 points. The S&P 500 (^GSPC) lost 0.25% to 3,973 points and the tech-heavy NASDAQ (^IXIC) slipped 0.24% to 10,973.

Read more: UK economy unexpectedly grows in November with help from World Cup

The FTSE 100 traded as high as 7847, nearing the record high of 7,903 set on 22nd May 2018, led by healthcare, financials, industrials and basic materials stocks.

The UK economy unexpectedly grew in November boosting hopes that the UK may yet avoid a recession.

Gross Domestic Product (GDP) rose 0.1% on the previous month, according to the Office for National Statistics (ONS), as the services sector remained in growth despite the soaring cost of living.

Rolls Royce (RR.L) led the gains by climbing 4.21%, followed by Airtel (AAF.L), up 3.42% and Haleon (HLN.L), up 3.79%.

"Britain’s FTSE continues to make gains, hitting 7,800 yesterday and pushing up further to 7,848 in early trade on Friday amid a broad rally for European equities after US inflation cooled. The UK bluechip index still has valuation on its side, trading around 10x forward earnings vs 15x for global equities. (for reference the FTSE traded at 17x in 2020)," Neil Wilson, chief market analyst at Finalto, said.

"The FTSE is up around ~5% this year, a bit behind the +8% gains for European equity markets but reflective of a better starting position – the FTSE 100 was easily the top performer among the big equity indices last year as it shrugged off rising rates and inflation with its defensive and old world mix of stocks. Only 50pts or so to the May 2018 all-time high at 7,903," he added.

So far this year, the FTSE 100 has already gained over 5%. In 2022 it gained almost 1%, while global markets tumbled around 20%.

Meanwhile, Brent crude (BZ=F) rose and was trading at around $84/barrel, amid optimism over China's demand outlook.

Read more: British Gas owner Centrica predicts eightfold rise in earnings as energy prices soar

In Asia, Tokyo’s Nikkei 225 (^N225) closed lower, losing 1.25% to 26,119 points, while the Hang Seng (^HSI) in Hong Kong rose 1.04% to 21,738. The Shanghai Composite (000001.SS) also edged higher, climbing 1.01% to 3,195 points.

Watch: Stocks rise as CPI report shows cooling inflation