London equities advanced on Friday, with the FTSE 100 reaching fresh record highs amid a broad rally across European markets, even as domestic data showed UK service sector growth slowing to its weakest pace in five months.
The FTSE 100 rose 59.75 points, or 0.6%, to 9,487.45 at midday, after touching a new intra-day peak of 9,494.64.
The FTSE 250 gained 155.19 points, or 0.7%, to 22,202.49, while the AIM All-Share was up 0.6% at 793.73.
The Cboe UK 100 rose 0.6% to 949.08, the Cboe UK 250 climbed 0.7% to 19,437.02, and the Cboe Small Companies index was 0.5% higher at 17,801.43.
Elsewhere in Europe, the CAC 40 in Paris rose 0.3%, while the DAX 40 in Frankfurt added 0.1%, extending the regional rally despite weak UK economic data and lingering uncertainty over the delayed US jobs report.
Financials and miners support rally
Financial stocks were the day’s best performers, helping both large- and mid-cap indexes extend weekly gains.
The banking sector climbed 1.4% while investment banking shares advanced 1.3%.
Precious metals miners Fresnillo and Endeavour Mining also rallied more than 2% each, tracking gains in gold prices.
The FTSE 100’s upward move came after the benchmark faltered late on Thursday, paring earlier advances despite a strong start.
Market watchers noted the index’s relatively limited technology exposure kept it from fully benefiting from a US-led tech surge that pushed Wall Street to record highs in the previous session.
Among individual names, J D Wetherspoon fell 4.7%, the worst performer on the midcap index, after warning of higher costs linked to potential tax increases and national insurance contributions.
By contrast, Diploma rose 2.6% after RBC upgraded the stock to “outperform” from “underperform.”
Economic data weighs
The upbeat equity performance contrasted with softer economic signals.
Survey data from S&P Global showed growth in the UK service sector eased to a five-month low in September.
The services PMI fell to 50.8 from 54.2 in August, missing a flash estimate of 51.9.
The reading remained just above the neutral 50-point threshold, pointing to only modest expansion.
Weak sales pipelines and rising staff costs were cited as the main drags.
The UK composite PMI also slipped to 50.1 from 53.5, the lowest in five months and below a flash estimate of 51.0.
Economists said the data reinforced expectations of subdued momentum heading into the year-end.
Businesses and consumers have been delaying spending decisions amid uncertainty over potential tax rises in the November budget.
Finance Minister Rachel Reeves is widely expected to either raise taxes or cut spending in order to balance fiscal plans.
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