European stock markets were slightly lower on Friday but still on course for their best weekly performance in over a year, wiping out almost all losses incurred since Russia’s invasion of Ukraine.
Wall Street's main indexes opened lower on Friday at the end of a week marked by little progress in peace talks to end the war in Ukraine and the first US interest rate hike since 2018.
But the S&P 500 is poised to break a two-week losing streak and achieve its best weekly performance since November 2020. Wall Street’s benchmark share index is on course to finish the week about 4.9% higher.
The London benchmark was trading down shortly after midday on Friday after what had otherwise been a strong week for London’s leading index.
"European shares were a bit more defensive in early trading on Friday, paring some of the gains of the previous two sessions. Nevertheless, stocks are on to finish the week higher as investors seem to be riding out some of the key war, sanctions risks," Neil Wilson, chief market analyst at Markets.com, said.
"At the highs this morning the FTSE 100 was only around 80pts below where it was before Russia invaded Ukraine. European stocks are on course for their best week since Nov 2020 despite all the tumult, but also because it’s been a much calmer commodity story. Investors are adjusting and getting comfortable with what’s out there and what the risks are…but I stick to the view that this is only the start and it remains a bear market rally."
Ted Baker (TED.L) shares jumped 21% after a US-based private equity firm confirmed its interest in a possible offer for the UK fashion chain.
Markets are making “more measured progress as some of the investing dust clouds begin to clear", Richard Hunter, head of markets at Interactive Investor, said.
“Some uncertainty has been lifted with the path of interest rates becoming clearer on both sides of the pond. In addition, there is something of a 'glass half-full' attitude emerging since, even after the projected rises, rates will still be low by historical standards.
"It remains to be seen whether the proposed rate rises will be sufficient to stifle inflation in the nearer term, but the purpose and clarity of thinking from the central banks is nonetheless being well-received by investors."
He added that the the FTSE 100 “remains a relative beacon of light on the global investment stage", though up just 0.1% in the year to date.
Asian markets finished mixed as of the most recent closing prices. The Hang Seng (^HSI) lost 0.2%, while the Nikkei 225 (^N225) advanced 0.6% in Tokyo after the Bank of Japan left its reference interest rate unchanged. The Shanghai Composite (000001.SS) gained 1.1%.
Meanwhile, crude oil prices were once again above the $100 a barrel mark. Brent crude (BZ=F) was trading at $107 a barrel on Friday amid continued fears over potential shortfalls in supplies.