Britain’s FTSE indexes experienced gains on Friday, positioning themselves to conclude the week on a positive note, primarily driven by the performance of defence stocks. Additionally, the anticipation of a rate cut from the Bank of England in March, coupled with a reduction in global concerns regarding AI disruption, contributed to the overall sentiment. The blue-chip FTSE 100 was up 0.6% at around 1134 and was trading just shy of a record high, while the domestically focused FTSE 250 rose 0.5%. Geopolitical tensions between Iran and the U.S., coupled with an increased probability of defense cooperation within Europe, contributed to a 6% rise in defense stocks this week.
On the earnings front, Aston Martin fell 1.4% after the luxury carmaker warned of a bigger annual loss and stated its intention to sell the rights to use its name on the Aston Martin F1 Team to bolster its finances following a challenging year. The broader auto sector lost 1.4% and was the only one in the red. Anglo American posted a $3.7 billion loss following another write-down in its diamonds business. However, shares increased by 1.3%, reflecting the upward movement in base and precious metal prices.
Both FTSE indexes are poised for weekly gains, with the blue-chip index on course for its most significant one-week increase in almost two months. Investors expressed relief following data released earlier this week indicating that inflation is consistently approaching the central bank’s 2% target. Robust manufacturing activity data and retail sales figures released on Friday indicated the potential for a resurgence in price pressures. Traders continue to assign a 78% probability to the central bank implementing a 25 basis point reduction in interest rates during its upcoming meeting, aimed at bolstering the labor market.
Concerns regarding AI disruption, which had previously unsettled global markets earlier in the month, seemed to momentarily recede into the background. Nevertheless, the escalating tensions between Iran and the United States came to the forefront following President Donald Trump’s warning on Thursday that Iran must negotiate a deal regarding its nuclear program or face severe consequences. Among other movers, Diageo rose 2.7% after a report indicated that new CEO Dave Lewis is planning a major shake-up of his executive team.