FTSE 100 struggles for direction as financials counter gains

London’s FTSE 100 struggled for direction on Friday as heavyweight financials negated gains in mining and energy stocks, while investors awaited the US Federal Reserve’s Jackson Hole symposium for signs on early bond tapering.

The FTSE 100 was flat at 7,125.19 with HSBC Holdings, Prudential and Lloyd’s being among the top drags.

The domestically focussed mid-cap index rose 0.1 per cent to hover near record highs.

Energy shares, industrial miners and travel stocks have been top performers this week. Travel stocks were on course to end their best week since March on higher demand amid easing lockdowns.

Stocks and commodities slump on Fed and global growth jitters

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Among stocks, British subprime lender Amigo jumped 4.4 per cent after it posted a steep rise in first-quarter profit, although it reiterated there was “material uncertainty” about its ability to continue as a going concern.

Food delivery company Just Eat Takeaway dropped 2.3 per cent to be the top FTSE 100 loser after the New York City Council approved legislation to permanently cap commissions delivery apps can charge restaurants.

Elsewhere, European stocks inched lower on Friday ahead of US Federal Reserve chair Jerome Powell's speech that could offer hints on the timeline for slowing of its bond purchases programme.

The pan-European Stoxx 600 index slipped 0.2 per cent in early trading, with travel and leisure and banks leading declines after gaining for much of the week.

Investors were squarely focussed on Powell’s speech at the Jackson Hole summit at 2pm GMT after fresh calls for early tapering from a few hawkish Fed policymakers unsettled investors on Thursday.

European and US stocks are trading near record levels, but worries about the highly contagious Delta variant of the coronavirus, slowing economic momentum and a gradual paring back of stimulus have all weighed on investor sentiment recently.

A survey showed French consumer confidence eased marginally in August, dragging down the country’s blue-chip CAC 40 index by 0.3 per cent.

Just Eat Takeaway.com, which owns GrubHub , fell 2.3 per cent after the New York City Council approved legislation to license food-delivery apps and permanently cap commissions they can charge restaurants.

Asian shares meanwhile were set for their best week since February on Friday as Chinese markets cheered a burst of central bank liquidity.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.17 per cent, up 3.78 per cent on the week, which would be its best week since February, while Japan’s Nikkei shed 0.46 per cent.

Chinese blue chips rose 0.45 per cent, a reversal of recent weeks in which mainland stocks have weighed on the region, as investors took comfort in the central bank’s biggest weekly cash injection into the banking system since February. Hong Kong’s benchmark rose 0.15 per cent.

Recent regulatory crackdowns have roiled sectors from property to tech and wiped half a trillion dollars from China’s markets in last week alone.

“A-shares (onshore Chinese shares) and Hong Kong are taking a break after some pretty extreme movements in the last two weeks,” said Qi Wang, CEO of MegaTrust Investment (HK).

“Investors are grappling with the regulatory risk versus still strong earnings.”

ZhongAn Online P & C Insurance Co Ltd rose 6.3 per cent after posting strong results, for example.

Australian and Korean benchmarks traded either side of flat.

Gold rose 0.53 per cent to $1,801.55 per ounce as some investors sought safety ahead of the speech.

US crude rose 1.39 per cent to $68.36 a barrel, Brent crude rose 1.46 per cent to $72.03 per barrel, as energy companies began shutting production in the Gulf of Mexico ahead of a potential hurricane this weekend. – Reuters