(Sharecast News) - London stocks fell on Friday amid surging oil prices and concerns about AI spending, as investors mulled a bigger-than-expected drop in UK retail sales and a plunge in consumer confidence.
The FTSE 100 closed down 0.3% at 10,690.36, while Brent crude was up 3.6% at $117.23 a barrel and West Texas Intermediate was also 3.6% firmer, at $103.07.
Danni Hewson, head of financial analysis at AJ Bell, said oil prices were being lifted by speculation there may be renewed US-Israeli strikes after next month's US midterm elections.
"Escalating tensions in Ukraine and the prospect of increased energy demand as the northern hemisphere heads into the winter months are only adding to the upwards pressure on oil and gas prices," she said.
"With the Nasdaq now 6% from its most recent all-time high it is starting to flirt with correction territory, with much now resting on next week's earnings updates from the likes of Amazon, Microsoft and Google-owner Alphabet.
"The UK market's limited exposure to tech and healthy representation for energy stocks and more traditionally defensive names means it has been spared some of the heavier losses across the US, Europe and Asia this week and that trend continued on Friday."
Investors were mulling a survey showing that business activity growth picked up in October.
The flash S&P Global composite purchasing managers' index ticked up to 53.1 from 52.0 in September, beating expectations for a reading of 51.7. This was above the 50 mark that separates contraction from expansion for the fourth month in a row and marked the highest reading since February.
Faster rates of output growth were recorded in both the manufacturing and service sectors, with the former posting its strongest upturn for just over two years.
S&P Global said greater demand meant that employment numbers returned to growth, albeit only marginally, ending a two-year period of job cuts.
Chris Williamson, chief business economist at S&P Global Market Intelligence, said: "This encouraging sign of economic resilience is underscored by firms taking on additional workers for the first time since hiring was hit by the 2024 Autumn Budget.
"There are reports of paused spending due to a lack of clarity on domestic economic policy in the run up to the Budget, meaning the promising economic picture from the latest PMIs should provide an encouraging base for further robust economic growth through the winter months, barring any adverse surprises to businesses in the tax and spending review."
Earlier, figures from the Office for National Statistics showed that retail sales fell 0.4% in September following a 0.7% rise the month before, and versus expectations for a smaller decline of 0.1%.
In the three months to September, sales were up 0.7% compared with the three months to June.
ONS senior statistician Hannah Finselbach said: "Retail sales grew in the latest quarter with growth led by motor fuel which, despite recent price increases at the pump, have now returned to monthly sales levels last seen before the start of the conflict in the Middle East.
"Food and drink sales also contributed to growth in the quarter, partly helped by the warm weather and the World Cup, although they fell back slightly in September."
Also on Friday, a survey from GfK showed that consumer confidence plunged in October to the greatest extent since the onset of the Covid pandemic.
GfK's long-running consumer confidence index fell 11 points from September to -24, with all five confidence measures down. Excluding a 25-point slide at the onset of Covid, this marked the steepest fall since the Brexit vote in 2016.
In equity markets, Rolls-Royce tumbled after French peer Safran warned of softening growth in the wide-body jet market. The engine maker was also in focus following a report it's nearing a deal for government subsidies of up to £200m to help fund the development of a new engine for short-haul aircraft. According to the Financial Times, an announcement is possible as early as next week.
Precious metals miner Fresnillo was weaker as gold and silver prices fell.
Trainline was knocked lower by a downgrade to 'hold' at Canaccord, while Eurowag slumped after TA Associates sold its remaining stake in the payments processor in a placing.
On the upside, BP, Ithaca Energy and Shell gushed higher in tandem with oil prices, while Anglo American rallied after an upgrade to 'buy' at Bank of America.
Market Movers
FTSE 100 (UKX) 10,690.36 -0.32%
FTSE 250 (MCX) 24,237.39 0.11%
techMARK (TASX) 6,223.66 -0.33%
FTSE 100 - Risers
BP (BP.) 638.50p 4.35%
Ithaca Energy (ITH) 300.80p 3.87%
Shell (SHEL) 4,033.00p 3.72%
Compass Group 11 (CPG) 33.94p 1.77%
Smith & Nephew (SN.) 1,153.00p 1.68%
Bunzl (BNZL) 2,822.00p 1.58%
Barratt Redrow (BTRW) 326.40p 1.37%
Weir (WEIR) 2,502.00p 1.30%
Anglo American (AAL) 3,663.00p 0.96%
Convatec Group (CTEC) 246.20p 0.90%
FTSE 100 - Fallers
Rolls-Royce Holdings (RR.) 1,164.20p -7.57%
Fresnillo (FRES) 2,309.00p -6.21%
Diploma (DPLM) 6,890.00p -5.10%
Computacenter (CCC) 4,590.00p -4.97%
Melrose Industries (MRO) 452.60p -4.72%
Burberry Group (BRBY) 1,040.00p -4.32%
Games Workshop Group (GAW) 16,050.00p -4.18%
International Consolidated Airlines Group SA (CDI) (IAG) 394.70p -3.52%
IG Group Holdings (IGG) 936.50p -2.90%
InterContinental Hotels Group (IHG) 161.10p -2.78%
FTSE 250 - Risers
NCC Group (NCC) 165.00p 5.10%
THG (THG) 39.70p 4.42%
Diversified Energy Company (DI) (DEC) 1,102.00p 4.36%
HGCapital Trust (HGT) 398.00p 3.78%
EnQuest (ENQ) 31.85p 3.24%
Halfords Group (HFD) 263.00p 2.94%
Michael Page (PAGE) 208.40p 2.76%
Rathbones Group (RAT) 1,712.00p 2.64%
Rosebank Industries NPV (ROSE) 312.00p 2.63%
Genus (GNS) 2,294.00p 2.41%
FTSE 250 - Fallers
Trainline (TRN) 210.80p -6.56%
Amaroq Ltd. Npv (DI) (AMRQ) 98.20p -4.88%
Bloomsbury Publishing (BMY) 625.00p -4.58%
W.A.G Payment Solutions (EWG) 104.80p -4.20%
Hochschild Mining (HOC) 429.80p -4.19%
Rightmove (RMV) 538.60p -3.75%
Renishaw (RSW) 5,160.00p -3.73%
CMC Markets (CMCX) 696.00p -3.47%
ASOS (ASC) 438.00p -3.42%
Baltic Classifieds Group (BCG) 2.29p -3.29%
34.67 (0.32%)
25.68
0.00