London close: Stocks finish Friday in the green

London stocks managed a positive finish on Friday, after investors shrugged off weak Chinese data overnight.

The FTSE 100 ended the session up 1.69% at 7,159.01, and the FTSE 250 was ahead 1.91% at 18,833.80.

Sterling was in a mixed state, to last trade up 0.38% on the dollar at $1.1869, while it weakened 0.4% against the euro to change hands at €1.1756.

“The bears had been losing their strength all week, despite the drops in the wake of the US CPI reading and poor JPMorgan results,” said IG chief market analyst Chris Beauchamp.

“Equities attempted rebounds after both these events, and today the buyers have finally succeeded in taking control, pushing the Dow up 2% and back above 31,000 once again.”

Beauchamp said it was another attempt at a “bear market rally”, quipping that a “decent one” was overdue.

“Better retail sales figures may have played a part here, and adventurous dip buyers do seem keen to push their advantage.”

On the economic front, investors were faced with the latest data out of China at the start of the day, showing that economic growth slowed sharply in the second quarter as the country’s zero-Covid strategy took its toll.

According to the National Bureau of Statistics, real GDP grew by 0.4% year-on-year in the second quarter, hitting a two-year low and down from 4.8% in the previous quarter.

Analysts had been expecting 1.2% growth.

On a quarter-on-quarter basis, GDP fell 2.6% following 1.3% growth in the first quarter and versus expectations for a 2% contraction.

"Domestically, the impact of the epidemic is lingering," the NBS said, adding that the risk of stagflation in the world economy was rising.

Shanghai was locked down for two months until the end of May, while Beijing was also placed on lockdown several times.

“Although European indices traded higher on Friday, China’s problems could have a ripple effect and cause more turmoil on the markets in the coming days and weeks,” said Danni Hewson, financial analyst at AJ Bell.

“China is one of Asia’s key growth powerhouses.

“We already knew that growth expectations were being pared back, but the latest GDP figure is the sort of pedestrian number one might expect from a developed Western nation.

Stateside, American consumers were a tad more confident at the start of July, thanks to the recent drop in petrol prices, the results of a very closely-followed survey revealed.

At the same time, their expectations for inflation over the long-term appeared to ebb to their lowest level in almost a year.

The University of Michigan's consumer confidence index edged up from 50.0 points at the end of June to reach 51.1, above consensus expectations for a reading of 50.0.

On the continent, passenger car registrations continued their downward trend in the European Union in June, according to fresh data on Friday, as supply chain issues continue to limit vehicle output.

According to the European Automobile Manufacturers’ Association (ACEA), registrations fell 15.4% to 886,510 units, making for the lowest June on record in volume terms since 1996.

All four major EU markets contributed to the fall, with Germany posting the strongest decline at -18.1%, followed by Italy at -15.0% and France at -14.2%.

Back on home shores, Heathrow Airport’s ability to properly handle its current chaos was issued a fresh challenge earlier, after ministers and top civil servants demanded it produce a plan to resolve its acute staffing shortage.

Chief executive officer John Holland-Kaye was given a deadline of midday to show the airport had enough people to run security screening, and to assist disabled passengers, in a letter from both the Department for Transport and the Civil Aviation Authority, cited by the Telegraph.

Holland-Kaye was also told to present a “credible and resilient” six-month plan showing how the airport will recover to full capacity.

“Heathrow and the airlines that use your airport must be assured, and be able to assure us, that you have in place a plan that can deliver a positive passenger experience through allowing as many people as possible to travel, without too much disruption and queues, and in particular to avoid significant numbers of short-notice and on-the-day cancellations,” wrote CAA chief executive Richard Moriarty and DfT interim director-general of aviation, maritime and security Rannia Leontaridi.

In equity markets, luxury car maker Aston Martin Lagonda rallied 23.7% after it reaffirmed its outlook and announced a £653m equity capital raise to "meaningfully" de-leverage the balance sheet, in a move that would result in Saudi Arabia’s sovereign wealth fund becoming its second-biggest shareholder.

The company said it was placing 23.3 million shares at 33p each with Saudi Public Investment Fund (PIF) to raise £78m in exchange for a 16.7% stake.

That would make PIF the car maker’s second-largest shareholder after chairman Lawrence Stroll, with a rights issue to raise £575m also announced.

Rio Tinto Group reversed earlier losses to gain 0.26% after the miner sounded a cautious note on the outlook in its second-quarter production results.

British American Tobacco added 3.15% after JPMorgan Cazenove placed the shares on ‘positive catalyst watch’ and lifted the price target to 4,500p from 4,000p.

"We update our model ahead of first half results scheduled for 27 July, and now sit 8% ahead of company consensus first half next-generation product sales and 3% ahead on earnings per share," it said.

On the downside, luxury fashion brand Burberry Group was down 3.76% after it said first-quarter same-store sales increased just 1% year-on-year as revenues were impacted by lockdowns across mainland China.

Drinks maker Britvic flattened 5.36% after posh tonic maker Fevertree downgraded its full-year profit guidance amid higher costs and highlighted an "exceptionally challenging" environment.

In broker note action, Admiral lost 2.66% after a downgrade to ‘underweight’ at JPMorgan.

Reporting by Josh White at Sharecast.com. Additional reporting by Michele Maatouk and Alexander Bueso.

Market Movers

FTSE 100 (UKX) 7,159.01 1.69%
FTSE 250 (MCX) 18,833.80 1.91%
techMARK (TASX) 4,287.25 1.28%

FTSE 100 - Risers

Rolls-Royce Holdings (RR.) 89.79p 5.24%
Airtel Africa (AAF) 156.50p 4.61%
JD Sports Fashion (JD.) 128.90p 4.37%
Rentokil Initial (RTO) 512.00p 4.26%
Berkeley Group Holdings (The) (BKG) 3,949.00p 3.98%
International Consolidated Airlines Group SA (CDI) (IAG) 111.34p 3.80%
Harbour Energy (HBR) 328.20p 3.71%
Smith (DS) (SMDS) 283.00p 3.66%
Intermediate Capital Group (ICP) 1,366.50p 3.44%
Taylor Wimpey (TW.) 117.20p 3.40%

FTSE 100 - Fallers

BT Group (BT.A) 174.70p -7.65%
Burberry Group (BRBY) 1,586.50p -3.76%
United Utilities Group (UU.) 1,016.00p -3.38%
Severn Trent (SVT) 2,775.00p -2.90%
Admiral Group (ADM) 1,882.00p -2.66%
Ocado Group (OCDO) 759.40p -1.38%
London Stock Exchange Group (LSEG) 7,550.00p -1.00%
BAE Systems (BA.) 792.60p -0.55%
Antofagasta (ANTO) 992.40p 0.08%
Anglo American (AAL) 2,550.00p 0.10%

FTSE 250 - Risers

Aston Martin Lagonda Global Holdings (AML) 459.30p 23.70%
Ferrexpo (FXPO) 116.40p 8.79%
Discoverie Group (DSCV) 639.00p 7.04%
SSP Group (SSPG) 239.60p 6.11%
Molten Ventures (GROW) 417.20p 6.05%
Grafton Group Ut (CDI) (GFTU) 783.60p 5.29%
Elementis (ELM) 101.60p 4.80%
TP Icap Group (TCAP) 107.30p 4.78%
RHI Magnesita N.V. (DI) (RHIM) 1,922.00p 4.68%
CLS Holdings (CLI) 206.00p 4.67%

FTSE 250 - Fallers

Polymetal International (POLY) 160.15p -5.75%
Britvic (BVIC) 804.00p -5.36%
Pennon Group (PNN) 976.50p -2.16%
Hochschild Mining (HOC) 74.25p -2.04%
Centamin (DI) (CEY) 74.42p -1.30%
Lancashire Holdings Limited (LRE) 395.40p -1.10%
Fidelity China Special Situations (FCSS) 253.00p -0.78%
Apax Global Alpha Limited (APAX) 161.00p -0.62%
Brewin Dolphin Holdings (BRW) 509.00p -0.20%
Hipgnosis Songs Fund Limited NPV (SONG) 109.40p -0.18%