UK's FTSE 100 rose on Friday, hauled by banking and energy stocks, but concerns around hawkish global rate hikes, looming recession and jitters ahead of Britain's new prime minister election set the blue-chip index on course for its worst week since mid-June.
The FTSE 100 rose 0.7% at 0820 GMT, snapping its four-day losing streak. The banking sector rose 1.1% with HSBC leading it higher after the U.S. Federal Reserve terminated a decade-long enforcement order against the bank for violating anti-money laundering laws.
Investors focussed on U.S. August nonfarm payroll data due later in the day, worried that robust data could spur more Fed tightening. The Tory Party is expected to announce its new Prime Minister on Monday, who will have to deal with rising food and energy prices, unrest among workers and a looming recession.
"Everybody is running up for the non-farm payrolls figure this afternoon from the U.S. and then there are people who will be looking to see who becomes the next Prime Minister on Monday," said Russ Mould, investment director at AJ Bell. "If you look at the previous occasions when mid-term prime ministers were appointed, the range of performances were massive."
The FTSE 100 rose over 1% when Theresa May was elected as the Conservative Party leader after David Cameron resigned as prime minister in 2016, while it gained 0.6% when Boris Johnson took over in 2019. Shell Plc advanced 1.5% after the oil major and Exxon Mobil Corp confirmed the sale of their California oil joint-venture Aera to German asset manager IKAV for $4 billion.
The oil major has also shortlisted four candidates to succeed Chief Executive Ben van Beurden who is preparing to step down next year after nearly a decade at the helm of the giant energy firm, two company sources told Reuters. Peer BP rose 2.1% tracking firm crude prices on bets that OPEC+ will discuss output cuts at a meeting on Sept. 5.
The mid cap index gained 0.6% but was still headed for its third consecutive week of losses. Rolls-Royce rose 3.5%, after the aircraft engine maker's Canada workforce voted in favour of a new collective agreement.
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