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Markets in London were driven by a boom in retail stocks on Friday despite new official figures showing a drop in retail sales.
After trading in the red during the early part of the day, the FTSE 100 ended 0.4% in the green at 7,087.9 points, a rise of 29.04.
News from Morrisons and Marks & Spencer pushed the two chains to the top of the FTSE 250.
Morrisons is the target of a bidding war between two private equity sides, who want to buy the company.
On Thursday evening Clayton, Dubilier & Rice won the backing of Morrisons’ board after upping its bid for the company to £7 billion.
Its shares rose sharply on the news, but were left behind by a soaring Marks & Spencer.
M&S upgraded its profit guidance for the first time in decades on Friday because sales are doing better than expected.
Seeing this, investors jumped on the bandwagon, sending the high street giant’s shares up by 14%.
They ignored more concerning signs coming out of the sector. UK retail sales unexpectedly dipped 2.5% between June and July, according to the Office for National Statistics.
“UK retail sales may well have declined … in July; however, it appears someone forgot to tell the retail sector which is outperforming amongst the blue-chips today,” said CMC Markets analyst Michael Hewson.
The retail boom, which also lifted JD Sports, B&M and Next, saw the FTSE 100 end a tough week on a high.
All week global sentiment has been driving stocks, culminating in a rout on the stock exchange on Thursday.
Investors had in large part been worried about a potential crackdown on people who have gained huge wealth in China.
A new focus from Beijing on wealth distribution was especially bad for luxury fashion retailer Burberry’s shares.
“Having opened lower this morning European markets have recovered as we head into the weekend, however we can’t ignore the fact that this week has seen a bit of a shift in sentiment when it comes to optimism about the overall recovery story,” Mr Hewson said.
“Some sectors have taken a bit more punishment than most this week, notably luxury stocks, as well as basic resources over concerns that the combined headwinds of rising delta infections, supply chain constraints and a self-induced slowdown in China means that we’ve probably seen the peak of the recovery, just over a week since we were posting record highs.”
In Europe the Dax index ended the day up 0.2%, while Paris’s Cac 40 dropped 0.6%.
The S&P 500 in New York and its neighbour the Dow Jones were both trading up 0.6% as markets closed in Europe.
In currency markets, the pound bought 1.3613 dollars or 1.1651 euros by the end of the day.
It was a slight gain, less than 0.1% against the dollar, and a similarly sized fall against the euro.
Elsewhere, car dealership Vertu saw its shares dip 0.5% despite putting out a second profit upgrade in less than a month.
The biggest risers on the FTSE 100 were JD Sports, up 27.8p to 996.8p, Imperial Brands, up 38p to 1,557p, B&M, up 12.6p to 568.6p, Intermediate Capital Group, up 43p to 2,178p, and Sainsbury’s, up 5.5p to 294.7p.
The biggest fallers on the FTSE 100 were Anglo American, down 43.5p to 2,868.5p, United Utilities, down 8.6p to 624p, Diageo, down 44p to 3,523p, Pershing Square, down 25p to 2,540p, and Rolls-Royce, down 1.06p to 110.16p.