London’s FTSE 100 has struggled to hold on to gains in a choppy day of trading for global markets, while the pound strengthened after dropping to an eight-month low against the dollar.
The FTSE 100 had surged by more than 1% on Thursday, the first trading day of 2025, fuelling hopes that it was kicking off a stronger year of trading.
But it failed to keep up the momentum on Friday, dropping 36.11 points, or 0.44%, to close at 8,223.98.
Gains for energy giants Shell and BP were offset by losses for housebuilders and some retail stocks.
Next week, some of Britain’s biggest retailers including Tesco and Sainsbury’s are set to reveal their sales performance for the critical Christmas period.
Investors will be hoping for good news after new data from the British Retail Consortium showed shopper numbers fell over December for the second year in a row, with high streets and shopping centres hit particularly hard.
Footfall dropped 2.2% compared with the same month in 2023.
Meanwhile, the pound strengthened against the US dollar after hitting an eight-month low on Thursday, and moving close to falling to the lowest level in more than a year.
On Friday, sterling was up about 0.2% against the dollar, at 1.241. Sterling was more or less flat against the euro, at 1.206.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The pound has gained a little ground but remains at eight-month lows against the dollar.
“Given the strength of the US economy, the Federal Reserve looks set to be more reticent about cutting rates than the Bank of England.
“The lower pound has been benefitting multinationals with big overseas earnings like miners, but as sterling has clawed back a little higher, it’s being reflected in valuations.”
It was a weaker day of trading for other top indices in Europe. France’s Cac 40 suffered a 1.51% drop on Friday, while Germany’s Dax also moved 0.59% lower.
On the other hand, investors were buoyed over in the US where the S&P 500 had climbed 1%, and Dow Jones was about 0.6% higher by the time European markets closed.
The price of Brent crude oil was about 0.6% higher, at 74.40 US dollars per barrel.
In company news, low-cost airlines Ryanair and Wizz Air both said they saw growing numbers of passengers in December, even though there was disruption to flights over the Christmas period at several major UK airports.
Ryanair flew 8% more passengers than the same period last year, while Wizz Air carried 1.9% more. Shares in London-listed Wizz Air nonetheless closed 1.8% lower on Friday.
The biggest risers on the FTSE 100 were Shell, up 39.5p to 2,566.5p, BP, up 4.8p to 407.95p, Pershing Square, up 46p to 4,034p, Scottish Mortgage Investment Trust, up 9.8p to 971.4p, and British Land, up 3.2p to 362.4p.
The biggest fallers on the FTSE 100 were Diageo, down 99p to 2,448.5p, Persimmon, down 44.5p to 1,139.5p, Barratt Redrow, down 14.1p to 420.5p, easyJet, down 17p to 540.4p, and Taylor Wimpey, down 3.4p to 118.85p.