London close: Shares finish week on a mixed note despite buoyant data

London's main stockmarket gauges finished the week on a mixed note, although the Footsie did outperform its European peers as investors digested the latest borrowing figures and economic growth data out China.

The FTSE 100 was up 0.32% or 22.81 points to 7,049.80, faring considerably better than its European counterparts, which were dragged lower by the latest clash between the EU and Italy, although the second-tier index gave up 0.87% or 165.60 points to finish at 18,795.75.

Indices in Europe were in the red throughout most of the session, with Italy's FTSE Mib suffering the brunt of the selling the day after the European Commission sent a letter to Rome overnight demanding an explanation for its budget plans, which it called an "unprecedented" breach of EU fiscal rules. The news prompted a sharp rise in Italy's 10-year government bond yields, which surged to a four-year high.

However, Italian bond yields later retreated sharply after the European Union's Economics czar, Pierre Moscovici, called for dialogue with Rome, saying Brussls had no interest in dialing-up the tensions.

In currency markets, the pound was up 0.19% against the dollar at 1.30431 but lower by 0.34% versus the euro to 1.1328 as the latter strengthened on the back of the more positive news around Italy.

Elsewhere on the economic front, data from the Office for National Statistics showed that UK government borrowing fell more than expected in September, to £4.1bn from £5bn a year ago, as a big rise in tax receipts boosted expectations for the upcoming budget.

ONS said it was the lowest borrowing figure for September since 2007.

"The chancellor will be heartened by the 2018/19 fiscal year performance so far. It does give him some much-needed room for manoeuvre in November’s Budget as he looks to find the extra funding needed for the high-profile increased spending promised for the NHS," said Howard Archer, chief economic adviser to the EY Item Club. "Even so, it looks like he will still need to raise some taxes (or reduce tax relief in some areas) to help finance the increased NHS spending."

Chinese growth figures out earlier were also in focus as they showed that the economy slowed more than expected in the third quarter, with annualised GDP coming in at 6.5%, its weakest quarter since 2009 and below expectations of 6.6%. Still, stocks in the China rallied after regulators there stepped in with fresh measures to support liquidity and investment.

Closer to home, Brexit was still at the forefront of investors' minds after the EU said it was ready to extend the length of the post-Brexit transition if the UK wants. EU Council president Donald Tusk told reporters at the EU summit on Thursday that if the UK decides an extension would be helpful in order to reach a deal, "leaders would be ready to consider this positively".

However, May's concessions in Brussels - made without cabinet approval - were infuriating "all sections" of her party and sparking further plotting against the Prime Minister, newspapers reported.

In corporate news, shopping centre owner Intu Properties surged 13% after confirming it had received a possible offer from a consortium led by one of its senior to directors to buy the company at 210p a share. Intu's deputy chairman John Whittaker's Peel Group, which already holds around 27% of the firm, has teamed up with Saudi conglomerate Olayan Group and Canary Wharf owner Brookfield Property.

London Stock Exchange advanced after a broadly in-line third-quarter trading statement and after announcing that it was in the process of increasing its stake in LCH Group, while Man Group ticked a touch higher after it announced a new $100m share buyback.

Dechra Pharmaceuticals was on the front foot as it announced the acquisition of Brazil's Venco for BRL185m (37.8m) and it said its performance in the first quarter was in line with management's expectations, while IP Group rallied on the back of an initiation at 'buy' at Berenberg.

On the downside, EasyJet and Renishaw were sharply lower following downgrades from MainFirst and Stifel, respectively.

Equipment rental firm Ashtead was under the cosh for the second day running after US peer United Rentals' guidance disappointed on Wednesday. United Rentals shares ended down nearly 15% overnight.

InterContinental Hotels lost ground even after saying it had its best quarter for news signings and openings in a decade, as revenue per available room growth slowed. The company also announced a $500m special dividend and share consolidation.

Provident Financial was in the red after the doorstep lender said collections in its home credit business were still 10% below historic levels in the third quarter.

Safety and health group Halma slipped after saying it had bought a Belgian fire control panel maker and fire system seller, while plastics maker Essentra slid as it said like-for-like revenues were flat in the third quarter.

Market Movers

FTSE 100 (UKX) 7,049.80 0.32%
FTSE 250 (MCX) 18,795.75 -0.87%
techMARK (TASX) 3,321.46 -0.51%

FTSE 100 - Risers

Reckitt Benckiser Group (RB.) 6,714.00p 3.76%
GlaxoSmithKline (GSK) 1,557.60p 3.11%
Unilever (ULVR) 4,110.50p 3.11%
Diageo (DGE) 2,701.00p 2.91%
Tesco (TSCO) 214.60p 2.63%
London Stock Exchange Group (LSE) 4,391.00p 2.45%
SSE (SSE) 1,150.00p 1.86%
GVC Holdings (GVC) 960.00p 1.53%
Royal Dutch Shell 'B' (RDSB) 2,569.00p 1.46%
Centrica (CNA) 149.20p 1.36%

FTSE 100 - Fallers

easyJet (EZJ) 1,070.00p -6.32%
Evraz (EVR) 523.60p -5.32%
Smith (DS) (SMDS) 385.10p -4.65%
Barratt Developments (BDEV) 491.60p -4.40%
Taylor Wimpey (TW.) 151.40p -3.81%
Micro Focus International (MCRO) 1,345.00p -3.49%
InterContinental Hotels Group (IHG) 4,070.00p -3.49%
NMC Health (NMC) 3,030.00p -3.38%
International Consolidated Airlines Group SA (CDI) (IAG) 557.00p -3.20%
Johnson Matthey (JMAT) 2,919.00p -3.19%

FTSE 250 - Risers

Intu Properties (INTU) 200.00p 12.55%
Dechra Pharmaceuticals (DPH) 2,332.00p 7.96%
Convatec Group (CTEC) 155.50p 3.25%
CYBG (CYBG) 272.00p 2.87%
Energean Oil & Gas (ENOG) 610.00p 2.33%
Kier Group (KIE) 895.00p 2.29%
F&C Commercial Property Trust Ltd. (FCPT) 137.80p 2.23%
Pennon Group (PNN) 733.40p 1.92%
Mediclinic International (MDC) 364.30p 1.85%
Great Portland Estates (GPOR) 702.70p 1.83%

FTSE 250 - Fallers

Renishaw (RSW) 3,764.00p -10.21%
Essentra (ESNT) 354.80p -8.24%
Elementis (ELM) 203.00p -7.57%
Auto Trader Group (AUTO) 388.50p -6.16%
Ted Baker (TED) 1,840.00p -6.07%
Bovis Homes Group (BVS) 935.00p -5.36%
On The Beach Group (OTB) 421.50p -5.28%
Countryside Properties (CSP) 279.20p -5.03%
AA (AA.) 99.74p -4.92%
Victrex plc (VCT) 2,552.00p -4.92%