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London close: Gains in shares capped by geopolitical worries, pound strength
London stocks finished higher on Friday - but only just - as investors played it safe going into the weekend, due to the tense geopolitical situation in the Middle East, and strength in the pound.
The FTSE 100 edged higher by 0.09% or 6.22 points to finish at 7,264.56, having been a touch weaker at the open, as Sterling came off the boil a little.
Nevertheless, by the end of trading the pound was up by 0.19% at 1.42558 and trading above its 200-day moving average, alongside similarly-sized gains against the euro to 1.1572.
A stronger sterling tends to dent the top-flight index as around 70% of its constituents derive most of their earnings from overseas.
IG analyst Chris Beauchamp said: "The FTSE 100 has maintained its uncertain tone as we close out the week, with the volatility of Monday and Tuesday giving way to a less convincing three days. Gains in the pound have certainly helped stifle valuations.
"Traders are having a hard time trying to judge global developments, with the threat of a trade war and Western military involvement in Syria prompting a notably more cautious tone. The threat of a Syrian attack by the US and its allies at any moment has restrained market exuberance for the time being."
Weighing on sentiment, data out of China earlier showed a surprise monthly trade deficit in March for the first time in 13 months. China's trade balance swung to a deficit of $4.98bn from a surplus of $33.7bn the month before, versus expectations for a surplus of $19.6bn.
However, economists were quick to point out how first quarter figures as a whole continued to point to solid demand from overseas.
As well, overnight the US president struck a more confident note on the prospects for a fair resolution to his country's trade spat with Beijing.
Meanwhile, and in the geopolitical headlines, UK Prime Minister Theresa May and US President Trump agreed during a late-night phone conversation that Syria's suspected use of chemical weapons should not go unchallenged.
Downing Street said Cabinet ministers had agreed "on the need to take action" to "deter further use of chemical weapons" after concluding that it was "highly likely" the Assad regime was behind the chemical attack.
However, Transport Minister Jo Johnson later said that no decision on military action had been taken at this point.
In UK corporate news, London Stock Exchange shares edged higher as it appointed Goldman Sachs veteran David Schwimmer as its new chief executive.
Elsewhere, software company Sage Group tumbled after cutting its full-year organic revenue growth guidance, reflecting inconsistent operational execution.
Shopping centre owner Hammerson also suffered sharp losses as French real estate investment trust Klepierre said it does not intend to make an offer for the company after its second approach was rebuffed. Klepierre said it was abandoning its pursuit "after careful consideration" as Hammerson "did not provide any meaningful engagement with respect to the increase proposal".
Rolls-Royce was in the red after saying that it plans to step up the number of inspections it carries out on the Trent 1000 jet engines, a move that will lead to more disruption for customers and higher costs
There was a lot going on the broker note front. Fidessa was lifted to 'equalweight' at Barclays, while British Airways and Iberia parent IAG was a high riser as it was upgraded to 'hold' at HSBC a day after revealing it had taken a minority stake in Norwegian, which it is considering making an offer for.
Ultra Electronics was boosted by an upgrade to 'hold' at Berenberg.
Flybe was cut to 'hold' at HSBC, while Royal Mail was downgraded to 'underperform' at RBC Capital Markets and TalkTalk was cut to 'sector perform' at RBC. Lloyds was downgraded to 'hold' at HSBC and Wood Group was cut to 'equalweight' at Morgan Stanley.
Halma and Hill & Smith were initiated at 'buy' at Berenberg, while Renewi was initiated at 'hold'.
Virgin Money was started at 'hold' at HSBC.
Market Movers
FTSE 100 (UKX) 7,264.56 0.09%
FTSE 250 (MCX) 19,838.54 0.33%
techMARK (TASX) 3,367.27 -0.21%
FTSE 100 - Risers
Whitbread (WTB) 3,935.00p 3.31%
Micro Focus International (MCRO) 1,299.00p 3.22%
Mondi (MNDI) 1,963.00p 2.94%
GKN (GKN) 451.70p 2.80%
Rentokil Initial (RTO) 279.50p 2.31%
Smith (DS) (SMDS) 501.80p 2.30%
Mediclinic International (MDC) 592.20p 1.96%
Randgold Resources Ltd. (RRS) 5,784.00p 1.62%
Prudential (PRU) 1,846.50p 1.60%
Associated British Foods (ABF) 2,620.00p 1.51%
FTSE 100 - Fallers
Sage Group (SGE) 617.00p -8.18%
easyJet (EZJ) 1,611.00p -3.01%
Shire Plc (SHP) 3,606.50p -2.14%
Royal Mail (RMG) 560.80p -1.75%
Rolls-Royce Holdings (RR.) 866.80p -1.63%
British American Tobacco (BATS) 4,119.00p -1.32%
Barclays (BARC) 213.35p -1.23%
G4S (GFS) 250.70p -1.14%
Evraz (EVR) 392.60p -1.06%
Old Mutual (OML) 235.60p -0.93%
FTSE 250 - Risers
TI Fluid Systems (TIFS) 266.00p 6.40%
Greene King (GNK) 558.00p 5.68%
Hunting (HTG) 768.50p 5.35%
Ultra Electronics Holdings (ULE) 1,403.00p 4.31%
Intu Properties (INTU) 219.60p 4.22%
Contour Global (GLO) 250.00p 4.17%
Card Factory (CARD) 239.00p 4.00%
Capita (CPI) 146.65p 3.90%
Go-Ahead Group (GOG) 1,877.00p 3.70%
Centamin (DI) (CEY) 153.30p 3.69%
FTSE 250 - Fallers
Telecom Plus (TEP) 1,100.00p -10.57%
Hammerson (HMSO) 473.00p -9.04%
WH Smith (SMWH) 1,887.00p -6.49%
Greencore Group (GNC) 151.40p -3.54%
Fidelity China Special Situations (FCSS) 232.50p -3.33%
Cairn Energy (CNE) 215.00p -2.54%
Inmarsat (ISAT) 360.00p -2.44%
Dunelm Group (DNLM) 557.50p -2.19%
TalkTalk Telecom Group (TALK) 121.40p -2.18%
Coats Group (COA) 78.00p -2.01%