The FTSE 100 finished the week on a positive note on Friday, driven by stronger UK private sector activity and a surge in gold prices boosting mining stocks.
The FTSE 100 index closed up 68.40 points, or 0.6%, at 10,816.56, while the FTSE 250 gained 210.16 points, or 0.9%, to finish at 24,718.82.
The AIM All-Share also advanced, closing up 7.87 points, or 1.0%, at 811.96, rounding out a broadly positive session across UK equity markets.
For the week as a whole, the FTSE 100 gained 0.6% and the AIM All-Share rose 1.1%, though the FTSE 250 slipped 0.6% over the same period.
The S&P Global flash composite purchasing managers’ index climbed to 52.5 points in August, a four-month high, up from July’s final reading of 52.2, beating the FXStreet cited consensus of 51.6 points.
The services PMI rose to 52.8 in the August flash estimate, a six-month high, up from 52.1 in July, though the manufacturing PMI eased to a five-month low of 51.5 from 51.9.
JPMorgan analyst Allan Monks said the report “sends another positive message on growth” and “points to modest upside risks to our third quarter growth forecast.”
Not all economic data was encouraging, with UK retail sales volumes rising just 1.6% on-year in July, slowing sharply from a 3.8% increase in June and falling short of the FXStreet cited consensus of 2.2%.
Separate figures from the Office for National Statistics showed public sector net borrowing rose to £1.8 billion in July, up from £1.07 billion a year earlier, well above forecasts that had predicted a fall to around £300 million.
Gold traded at 4,605.34 dollars an ounce on Friday, up sharply from 4,518.45 dollars on Thursday, with silver rising 2.1% and copper climbing 1.6% on the day.
Goldman Sachs analyst Lina Thomas warned that renewed elevated call option demand raises volatility and upside price risk for the precious metal.
Ms Thomas explained that “as gold prices approach key strike levels, dealers that have sold these calls may be forced to buy gold to hedge their exposure, accelerating the rally.”
“We therefore continue to see significant upside risk to our 4,900 dollar per ounce end-2026 gold forecast, but also greater two-sided volatility to the gold rally,” the Goldman analyst added.
Rising metal prices lifted miners sharply on the FTSE 100, with Antofagasta up 5.4%, Endeavour Mining up 4.1%, and Anglo American gaining 2.6% on the session.
JD Sports Fashion rebounded 5.6% after Thursday’s steep sell-off, which followed the sports retailer cutting its profit guidance, with Berenberg analysts saying they remain “constructive on JD’s recovery prospects should consumer and product cycles turn back in the company’s favour.”
On the FTSE 250, Gamma Communications surged 12% after the company named Waterland Private Equity Investments and Giacom Group as potential suitors, with Waterland acting in concert with the London-based telecoms provider.
Domino’s Pizza climbed 5.2% after Shore Capital upgraded the stock to “buy” from “hold,” with analyst Katie Cousins citing “a cleaner strategy, early evidence of operational delivery and a cash profile that should support investment and deleveraging.”
Hunting fell 14% after the company reported a decline in half-year revenue and cut its 2026 guidance, noting that the Middle East conflict “caused some delays to tendering.”
Dan Coatsworth, head of markets at AJ Bell, said relief from the US Treasury’s earlier intervention in bond markets had proved “short-lived,” citing the scale of US government borrowings having crossed the 40 trillion dollar threshold as a key pressure point.
Looking ahead, Federal Reserve chair Kevin Warsh is scheduled to speak at the Jackson Hole symposium on Friday, while US personal consumption expenditures inflation data and Chicago Fed activity figures are also due during the coming week.