The FTSE finished flat on Friday as traders sifted through a batch of mixed economic data.
A flat finish to the week might seem like a defeat for investors, but a 1% gain since Monday for the FTSE 100 shows just how resilient the rally has been.
Equities had started off the day on the back foot after a terror attack in Nice that left at least 84 people dead. A truck was driven into crowds celebrating Bastille Day in Nice, in what President Francois Hollande called an attack of “an undeniable terrorist nature”. Shares in travel and leisure stocks fell on the news, including Carnival, Thomas Cook, TUI and easyJet.
On the upside, Chinese data came in better than expected, including economic growth figures. China’s gross domestic product growth of 6.7% was better than the 6.6% analysts had been expecting and was in line with the previous quarter’s growth. The government is targeting an annual GDP between 6.5% and 7% for this year.
Retail sales in China rose 10.6% in June from a year ago, beating forecasts for a 9.9% increase. China industrial production data also exceeded estimates, rising 6.2% year-on-year in June against forecasts for a 6.0% gain.
Closer to home, construction output in the UK slumped in May ahead of the EU referendum, according to the latest figures from the Office for National Statistics. Output fell by 2.1% in May from April, which was much steeper than the 1% decline expected by economists. Construction output had risen by 2.8% in April.
On the Brexit front, Prime Minister Theresa May has told First Minister Nicola Sturgeon she is “willing to listen to options” on Scotland’s future relationship with the European Union but appeared unwilling to consider a second referendum on the nation’s independence.
Stateside, US inflation remained unchanged in June at an annualised 1.0%, missing forecasts for 1.1% growth, the Labor Department revealed.
US retail sales rose 0.6% in June from the previous month versus expectations of a 0.1% gain, the Commerce Department said.
Dennis de Jong, managing director at UFX.com, said: “Last week’s US non-farm payroll data shocked the market by coming in much better than expected, and the trick was repeated by today’s retail sales figures.
Fed Chair Janet Yellen will be delighted to see the retail sector remain buoyant, as it was feared by some observers that consumers might keep their wallets close to their chests amid significant global uncertainty.
US industrial rose 0.6% in June following a 0.3% decline in May, beating analysts’ expectations of 0.3% growth amid strong auto and utility production. Manufacturing output was up 0.4% month-on-month, mostly due to an increase in motor vehicle assemblies, exceeding forecasts for a 0.3% increase.
The University of Michigan consumer confidence index adropped, falling to 89.5 in July from 93.5 the previous month. Analysts had expected no change.