Article Highlights

  • FTSE 100 up 0.2 pct, mid caps hit fresh record
  • UK services activity grows at fastest rate in 6 months
  • Randgold recovers after disappointing results
  • TP ICAP falls after "shock" departure of finance chief
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British shares hovered near new highs on Friday, supported by a rally in global stocks and renewed pressure on sterling after the Bank of England’s interest rate hike helped the country’s leading exporters.

The exporter-heavy FTSE rose 0.2 percent to within sight of June’s record high and was set for a 1 percent weekly gain, while the mid cap index hit a new all-time high before paring some gains, up 0.1 percent on the day.

Globally stocks are at record highs so it would be a pretty dire sign if the FTSE was not in on the action when the economy is just about keeping up with peers,” said ETX Capital analyst Neil Wilson.

Yesterday’s sharp fall in sterling on the BoE’s dovish hike was the catalyst for fresh gains as once again we saw a weaker pound a reason to bid up UK equities,” he added.

Sterling came under renewed pressure on Friday but strengthened slightly after data showed that the services sector enjoyed a sharp pick-up in growth last month, but companies were nervous about Brexit.

The closely watched survey came a day after the Bank of England raised interest rates for the first time in a decade but said it expected only “very gradual” further increases as Britain prepares to leave the European Union.

Among big internationally exposed FTSE companies, Diageo was the biggest gainer, up 0.9 percent and close to its all time high, while Experian and Compass Group added 0.8 and 0.5 percent respectively.

Domestic banks Lloyds and Royal Bank of Scotland were under pressure for a second day on prospects of a gentle tightening cycle in the UK.

The biggest gainer on the FTSE was NMC Health, up 2.7 percent, helped by a price target upgrade at Deutsche Bank.

Precious metal miner Randgold rose 1.8 percent, recovering part of the slump seen in the previous session following weaker than expected results.

UBS confirmed its buy rating on the stock, saying the share price reaction to the quarterly update was unjustified given that the company kept its guidance unchanged.

IAG fell 0.8 percent, reversing earlier gains.

The owner of British Airways said it was aiming for annual core earnings around 20 percent higher than previous targets as it stuck to its goals for earning-per-share growth and margins for the coming years.

Among mid caps there were stronger price moves.

TP ICAP fell 5 percent after the world’s No. 1 interdealer broker said its finance head was leaving and flagged a challenging outlook for the final quarter of 2017.

The shock news (on TP ICAP) is that Andrew Baddeley, CFO, is stepping down from the board with immediate effect. Underlying trading however is good,” said Liberum, confirming its buy rating.