London close: Stocks mixed amid renewed US debt ceiling hopes

London’s stock markets ended the week on a mixed note on Friday, with the benchmark index rising amid hopes of a nearing deal over the US federal debt ceiling.

The FTSE 100 closed 0.74% higher at 7,627.70, while the FTSE 250 ended the session 0.25% lower at 18,794.09.

Adding to the positive outlook was the better-than-expected sales data in the UK retail sector.

Sterling was showing strength, last rising 0.16% on the dollar to trade at $1.2341, while it increased 0.22% against the euro to change hands at €1.1513.

“With Democrats and Republicans squabbling over the last $70bn, investors increasingly hope for a signed debt ceiling agreement before 1 June,” said IG senior market analyst Axel Rudolph.

“The question is whether it'll be made in time as Congress breaks up for a holiday weekend?

“With the UK and several European countries also enjoying a prolonged weekend, investors squared their positions on Friday, leading to a short squeeze and positive close on the day.”

Retail sales bounce back stronger than predicted last month

In economic news, UK retail sales made a stronger-than-expected comeback in April as consumers flooded back to the high streets, according to data from the Office for National Statistics.

Following a 1.2% drop in March, retail sales saw a 0.5% boost in April, surpassing predictions for a 0.3% rise.

The sales volumes in food stores ticked up 0.7%, while a 1% increase was observed in non-food store sales.

In addition, department stores and other store sales witnessed gains of 1.7% and 2.1% respectively for the month.

“Retail sales grew, partially rebounding from a poor weather affected March, with jewellers, sports retailers and department stores all having a good month,” said ONS chief economist Grant Fitzner.

“Despite continued high food prices, supermarkets also recovered from the fall in March.

“However, these were partly offset by a drop in the amount of fuel sold, despite prices also dropping.”

Across the Atlantic, American consumer spending saw a significant uptick last month, driving the savings rate downwards, according to the US Department of Commerce.

Personal income in April experienced a 0.4% monthly growth, aligning with experts' forecasts.

Meanwhile, personal consumption expenditures (PCE) saw a rise of 0.8% against March, doubling the expected 0.4% increase.

A revision by the Commerce Department revealed a marginal 0.1% PCE increase in March, up from a flat 0.0%.

The personal savings rate, however, dipped from 4.5% to 4.1%.

Despite the buoyant spending, US consumer confidence still dipped in May.

The University of Michigan's consumer confidence index fell to 59.2 from 63.5 in April, against the Bank of America's predicted decline to 57.5.

Miners firmer on metals prices, Darktrace tumbles

On London’s equity markets, mining companies Rio Tinto, Antofagasta, Anglo American and Glencore all registered gains as metals prices rallied.

Rio Tinto Group led the pack, jumping 3.51%, closely followed by Antofagasta at 2.93%, while Anglo American and Glencore added 2.27% and 1.49%, respectively.

Pharmaceutical giant AstraZeneca was 1.22% firmer, after the company announced that its phase three trial demonstrated significant improvement in endometrial cancer patients treated with a combination of its ‘Imfinzi’ drug and chemotherapy.

On the downside, International Consolidated Airlines declined 0.7% as a computer glitch affecting online check-ins led British Airways to cancel at least 50 flights from Heathrow, just as the bank holiday weekend kicked off.

Halfords Group slipped 0.69% after RBC Capital Markets downgraded the company from 'outperform' to 'sector perform'.

Cybersecurity firm Darktrace tumbled 10.96% after Bank of America Merrill Lynch initiated coverage with an 'underperform' rating and set a "street-low" price target of 240p, implying an 18% downside potential.

Fast-fashion retailer Asos fell 2.89% after confirming it had raised £75m from shareholders.

The fundraising effort was announced late on Thursday, with management saying it would help return the struggling business, which owns the TopShop and Miss Selfridge brands, to sustainable profitability and cash generation in the second half.

Reporting by Josh White for Sharecast.com.

FTSE 100 +56.33 (+0.74%) 7,627.70

RISERS
Rio Tinto Group +3.51% 4,925p
M&G +3.28% 198.35p
Antofagasta +2.93% 1,389.5p
Anglo American +2.27% 2,318.5p
Endeavour Mining +2.24% 2,010p
Auto Trader Group +1.85% 626.4p
Centrica +1.85% 118.4p
3i Group +1.81% 1,938p
Experian +1.8% 2,828p
Ashtead Group +1.76% 4,921p

FALLERS
Land Securities Group -2.51% 599p
Vodafone Group -1.96% 79.47p
British Land Co -1.93% 345.7p
Frasers Group -1.68% 672p
Taylor Wimpey -1.49% 115.65p
SSE -1.29% 1,833.5p
ConvaTec Group -0.86% 207.2p
Barratt Developments -0.8% 473.8p
Kingfisher -0.77% 231.2p
BT Group -0.72% 114.05p

FTSE 250 -46.66 (-0.25%) 18,794.09

RISERS
Molten Ventures +4.94% 284.6p
Tullow Oil +4.56% 25.68p
HgCapital Trust +3.93% 396.5p
IP Group +3.62% 57.2p
Petershill Partners +3.03% 149.8p
Carnival +2.42% 797.2p
Softcat +2.24% 1,325p
Kainos Group +2.1% 1,262p
JPMorgan American Investment Trust +1.92% 737p
Balanced Commercial Property Trust +1.88% 81.4p

FALLERS
Darktrace -10.96% 260p
IntegraFin Holdings -4.99% 263p
Syncona -4.35% 154p
Bakkavor Group -4.01% 91p
Synthomer -3.95% 98.45p
WH Smith -3.73% 1,522p
Helios Towers -3.6% 91.05p
Trainline -3.54% 261.8p
Dr. Martens -3.41% 161.3p
Elementis -3.25% 107p