London’s main equity indexes saw declines for the second consecutive week, despite ending higher on Friday, bolstered by gains in homebuilder stocks. Positive U.S. jobs data also helped ease recession fears in the world’s largest economy.
The FTSE 100 index rose 0.3% on Friday, while the mid-cap FTSE 250 gained 0.6%. However, both indexes ended the week in negative territory, with the FTSE 250 down 1.5%.
The week was marked by global market volatility, driven by fears of a U.S. recession following the July jobs report and a surge in the yen after the Bank of Japan raised interest rates on July 31. Investors responded by unwinding yen carry trades.
In London, homebuilder stocks were among the top performers, rising 1.5%. This came after Bellway joined its rivals in providing an optimistic outlook for the sector, buoyed by the Bank of England’s rate cut and proposed planning reforms by the new labour government.
Rate-sensitive real estate investment trusts and the broader real estate sector also saw gains, each rising 1%. However, personal care, drugs, grocery stocks, and the luxury sector led the declines, each down 0.8%.
Looking ahead, next week will be critical as investors turn their attention to consumer price inflation data from the U.S. and UK, along with Britain’s GDP figures for the second quarter.
“With concerns about the quantum of existing carry trades still lingering, next week looks a significant one in terms of economic announcements with readings of US inflation and retail sales,” said Russ Mould, investment director at AJ Bell.
In other developments, Hargreaves Lansdown gained 2.3% after the investment platform agreed to a £5.44 billion ($6.94 billion) takeover by an international consortium.