FTSE 100 closes lower, US banks impress

The FTSE 100 index ended Friday’s session with a slight decline of 0.1%, closing down by 5.64 points at 7,434.57. This comes as investors maintain their focus on the Federal Reserve’s hiking cycle, believing that it is nearing its end. Despite a positive mood earlier in the week, the market sentiment took a slight dip.

During the week, the FTSE 100 saw a 2.5% increase, while the FTSE 250 enjoyed a 3.1% rise, and the AIM All-Share advanced by 1.2%. These gains indicate a relatively positive overall performance.

According to Ipek Ozkardeskaya, an analyst at Swissquote Bank, the US inflation news has contributed to the positive sentiment among investors. While the Federal Reserve is working towards reducing the US inflation rate to 2%, from its current level of 3.0%, market participants are confident that the central bank will only raise interest rates one more time.

Moreover, the US labor market’s strength provides hope that the nation may avoid a “hard landing.” The chances of another rate hike following the June increase are becoming less certain, leading to a positive reaction from equity markets.

The Federal Open Market Committee is scheduled to announce its decision on interest rates on July 26.

In New York, JPMorgan shares were up 0.2% at the time of the London equities close. The bank reported impressive figures, with net revenue increasing by 34% year-on-year to $41.31 billion and net income surging 67% to $14.47 billion.

Similarly, Wells Fargo announced a significant rise in quarterly net income and revenue, supported by higher interest rates. The bank’s stock rose by 0.9%, reporting a 20% increase in revenue to $20.53 billion and a 57% surge in net income to $4.94 billion.

However, Citigroup faced a less-than-stellar quarter, citing higher operating costs, increased cost of credit, and weaker revenue as factors impacting its net income. Citigroup’s stock dropped by 2.5%, reporting a 36% decline in net income to $2.92 billion and a 1.0% decrease in total revenue to $19.44 billion.

At the London close, stocks in New York showed positive momentum, with the Dow Jones Industrial Average up by 0.3%, the S&P 500 index up by 0.2%, and the Nasdaq Composite up by 0.4%.

In European equities, the CAC 40 in Paris ended the day up by 0.1%, while the DAX 40 in Frankfurt closed down by 0.2%.

Among the FTSE 100 constituents, Spirax-Sarco Engineering stood out as the top performer on Friday, closing up by 3.3%. UBS raised its rating on the stock from “neutral” to “buy.”

In the FTSE 250 index, Ashmore experienced an 8.3% decline. The emerging markets-focused investment manager expects a 3.1% decrease in assets under management for the fourth quarter, falling to $55.9 billion from $57.7 billion.

Additionally, 888 saw a significant drop of 24% after the UK gambling watchdog announced a review of its license. The review comes as a result of proposed additions to the bookmaker’s board by a vehicle backed by former executives of GVC Holdings.