London stocks closed little changed on Friday, as weak US economic data weighed on global markets.

  • The FTSE 100 edged down 3.60 points to 8,659.37.
  • The FTSE 250 was up 1.12 points at 20,613.89.
  • The AIM All-Share gained 1.48 points to 718.02.

US markets were lower at the London close, with the Dow Jones down 0.8%, the S&P 500 lower by 0.5%, and the Nasdaq Composite slipping 0.6%.

US Economic Data Signals Slowdown

A string of weak US data releases rattled markets:

  • Consumer sentiment fell as the University of Michigan’s index dropped to 64.7 from 71.7, missing expectations.
  • Existing home sales slid 4.9% in January to an annual rate of 4.08 million, reflecting persistent affordability challenges.
  • Business activity slowed, with the S&P Global US Composite PMI dropping to 50.4, a 17-month low.
  • The services sector contracted, with its PMI reading at 49.7, marking the weakest performance in over two years.

Adding to the gloom, UnitedHealth shares slumped 9.0% following reports that the US Justice Department is investigating whether the firm improperly influenced doctors to inflate Medicare claims.

UK Retail Sales Surge, Banks Provide Support

UK retail sales posted a 1.7% month-on-month rise in January, beating expectations of 0.3%. Food store sales led the rebound, according to the Office for National Statistics.

Retail stocks rose but pared gains late in the session:

  • J Sainsbury up 1.8%
  • AB Foods (Primark owner) up 1.4%
  • Marks & Spencer up 1.3%

Banking stocks also bolstered the FTSE:

  • NatWest surged 4.2%
  • Standard Chartered climbed 3.8%
  • Barclays gained 1.9%
  • Lloyds Banking Group added 1.6%

Standard Chartered jumped after an upbeat earnings report, stating its strategy is “firing on all cylinders” and targeting 13% return on tangible equity by 2026.

UK Government Borrowing Hits Record Surplus

The UK public sector recorded a £15.44 billion surplus in January, the largest since records began in 1993, largely due to tax receipts. However, this was below the £20 billion forecast by the Office for Budget Responsibility.

Poolbeg Pharma Plummets After Failed Takeover

Poolbeg Pharma sank 18% after potential buyer Hookipa Pharma opted against a bid. The London-based firm said it was “surprised and disappointed” by the decision.

Looking Ahead: Corporate Earnings & Eurozone CPI

Next week, major FTSE 100 firms including Croda, Smith & Nephew, Unite, Aviva, Haleon, Rolls-Royce, Taylor Wimpey, IMI, Rightmove, and Pearson will report full-year results.

On the macroeconomic front, investors will monitor eurozone CPI data on Monday and German elections on Sunday, which could influence market sentiment next week.

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