London close: FTSE ends up as investors mull Warsh speech

(Sharecast News) - London stocks ended up on Friday as investors mulled a speech by Federal Reserve chair Kevin Warsh, who signalled that rates hike may be needed in the coming months unless price pressures ease.

The FTSE 100 closed up 0.3% at 10,824.26, while Brent crude was down 0.4% at $89.31 a barrel and West Texas Intermediate was 0.3% lower at $83.00.

Earlier in the day, Warsh made his debut speech at the Jackson Hole Economic Policy Symposium in Wyoming.

Kathleen Brooks, research director at XTB, said: "It is hard to surmise the market reaction to Warsh's speech. The stock market is acting like his speech was dovish, and US indices are not pricing in a near-term rate hike from the Fed. However, the interest rate futures market is pricing in an increased chance of a September rate hike.

"Expectations for a hike have jumped to just over 40% from 35% before his speech, after Warsh said that the Fed cannot afford for inflation expectations to become de-anchored. This suggests that the Fed will continue to focus more on inflation than any more weakness in the labour market."

Unsurprisingly, there was a dearth of UK corporate news ahead of the Bank Holiday weekend.

Utilities were among the top performers on the FTSE 100, with SSE, Centrica and Severn Trent all up.

Melrose Industries gained again, having jumped earlier in the week after it said the Orange County District Attorney had closed its criminal investigation into an incident at the GKN Aerospace Garden Grove facility with no charges.

Recruiter Hays was boosted by an upgrade to 'buy' from 'hold' at Panmure Liberum, which hiked its price target on the stock 100p from 35p.

Goodwin ended in the black but well off earlier highs, after it reported record full-year trading profit and said talks regarding the sale of its Mechanical Engineering division are progressing well, and there have been discussions with a "number of potentially interested parties".

On the downside, BAE Systems and Babcock both lost ground on news that new chancellor John Healey will delay setting out when the UK will meet the target of spending 3% of GDP on defence until next year's spending review. His first budget in October will focus instead on funding the defence investment plan.

Market Movers

FTSE 100 (UKX) 10,824.26 0.29%

FTSE 250 (MCX) 24,938.79 0.16%

techMARK (TASX) 6,179.95 -0.56%

FTSE 100 - Risers

Investec (INVP) 663.00p 2.87%

SSE (SSE) 2,449.00p 2.86%

HSBC Holdings (HSBA) 1,528.40p 1.62%

Severn Trent (SVT) 3,146.00p 1.48%

Standard Chartered (STAN) 2,177.00p 1.40%

Vodafone Group (VOD) 118.45p 1.24%

Melrose Industries (MRO) 515.20p 1.22%

United Utilities Group (UU.) 1,431.00p 1.20%

Aviva (AV.) 730.40p 1.16%

Informa (INF) 901.40p 1.14%

FTSE 100 - Fallers

Babcock International Group (BAB) 1,056.50p -2.36%

BAE Systems (BA.) 2,044.00p -2.29%

Airtel Africa (AAF) 332.80p -2.12%

Autotrader Group (AUTO) 528.00p -1.53%

AstraZeneca (AZN) 11,970.00p -1.47%

JD Sports Fashion (JD.) 86.70p -1.32%

Admiral Group (ADM) 4,024.00p -1.28%

The Sage Group (SGE) 1,092.00p -1.04%

Convatec Group (CTEC) 227.60p -0.96%

Smith & Nephew (SN.) 1,062.50p -0.93%

FTSE 250 - Risers

Hays (HAS) 76.85p 5.13%

AEP Plantations (AEP) 205.00p 5.02%

Workspace Group (WKP) 378.00p 2.83%

Pets at Home Group (PETS) 218.60p 2.63%

Halfords Group (HFD) 273.50p 2.43%

GB Group (GBG) 162.20p 2.27%

Johnson Matthey (JMAT) 2,276.00p 2.25%

Telecom Plus (TEP) 875.00p 2.22%

Michael Page (PAGE) 222.00p 2.21%

Savills (SVS) 1,070.00p 1.90%

FTSE 250 - Fallers

XP Power Ltd. (DI) (XPP) 1,786.00p -4.08%

Oxford Nanopore Technologies (ONT) 176.10p -2.81%

Ceres Power Holdings (CWR) 392.80p -2.72%

B&M European Value Retail (BME) 237.60p -2.62%

Auction Technology Group (ATG) 440.60p -2.39%

Shawbrook Group (SHAW) 316.00p -2.17%

W.A.G Payment Solutions (EWG) 101.40p -2.12%

Rank Group (RNK) 103.20p -2.09%

Pan African Resources (PAF) 136.30p -1.87%

Chemring Group (CHG) 550.50p -1.87%