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The FTSE 100 was set to close the week out with gains that paled in comparison to its European rivals, as strength in banks and energy stocks vied with losses for the mining and home-building sectors.
The index UKX, +0.02% was flat at 6,736.62 and up 1.6% for the week, versus a more than 3% weekly gain for the Stoxx Europe 600 SXXP, -0.51%. The FTSE 100 was faring better than European rivals on Friday, though, helped in part by a weaker British pound GBPUSD, -0.74% as the dollar DXY, +0.46% firmed up across the board.
In focus for Friday, the yield on the 10-year Treasury note TMUBMUSD10Y, 1.600% jumped more than 8 basis points to trade above 1.61%, and was set to send growth-oriented stocks lower on Wall Street. U.K. bonds reflected similar pressure, with the yield on the 10-year gilt TMBMKGB-10Y, 0.803% up 5 basis points to 0.79%.
Data showed the U.K. economy shrank 2.9% in January, which was less than expected, but trade with the European Union tumbled at the end of the Brexit transition period. Even if the numbers were better than forecast, they “nevertheless showed the dire impact of lockdown on economic activity,” said Neil Wilson, chief market analyst at Markets.com, in a note to clients.
Among stocks on the move, shares of Burberry BRBY, +5.56% shares jumped 7% after the luxury-goods group forecast fiscal 2021 revenue and adjusted operating profit to come in ahead of expectations.
Banks were also in the lead, with Barclays BCS, -0.51% BARC, +2.74% and Standard Chartered STAN, +1.09% up more than 2% each. But as seen earlier in the week, mining stocks were again weighing on the FTSE 100 index, with shares of Rio Tinto RIO, -0.76% RIO, +2.86% down 0.8% BHP Group BHP, -0.55% BHP, +1.55% off 0.5% and Fresnillo FRES, -3.14% 3% lower.
The home-building sector was also weak, with Berkeley BKG, -5.29% shares leading decliners with a 5% drop after reporting results. The company said it’s trading robustly and expects to deliver a fiscal 2021 pretax profit in line with guidance.
“Of all the housebuilders Berkeley seems the least bullish. A flat performance in its financial year to February 2021 is testament to how impressively the business recovered from the pandemic in the second half,” said Russ Mould, investment director at AJ Bell, in a note to clients.
“Whatever the disappointment about the current year’s guidance from Berkeley no one could argue its credentials as an income stock rest on anything other than very firm foundations – the impressive visibility it provides on dividends backed by an extremely strong balance sheet,” he said.
The sector saw losses across the board, with shares of Rightmove RMV, -1.64% down 1.6% and Barratt Developments BDEV, -1.87% down 1%.
