FTSE 100 Holds Steady as Energy Shares Offset Broader Losses

London’s FTSE 100 remained largely unchanged on Friday after hitting a two-week high in the previous session, with strong performance from energy stocks helping to limit broader declines.
The blue-chip FTSE 100 was marginally lower, while the mid-cap FTSE 250 fell by 0.2%. Despite these small losses, both indexes are on track for their second consecutive week of gains.
Most major sectors closed in the red, with industrial metal miners seeing the largest drop, falling 1.1%. A stronger U.S. dollar weighed on the prices of base metals, contributing to the decline in this sector.
On the positive side, energy stocks rose by 1%, buoyed by oil prices stabilizing at a two-month high reached on Thursday. However, trading volumes remained thin due to the shortened week following Wednesday’s New Year holiday.
A report from the British Retail Consortium revealed that foot traffic in stores fell by 2.2% last year, marking the largest drop since 2021. The decline was particularly notable in the final quarter, including the key holiday shopping period.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, commented, “It looks set to be a highly challenging year ahead for retailers, who will face the dual pressures of consumers seeking value for money while their own costs rise due to tax increases.”
Investors also remain uncertain about the potential inflationary effects of UK Finance Minister Rachel Reeves’ October budget, which could influence the Bank of England’s gradual approach to monetary policy easing. The central bank made two rate cuts totaling 50 basis points in 2024, and markets are anticipating a reduction of nearly 60 basis points this year.
Further jitters were added by the prospect of former U.S. President Donald Trump’s return to the White House and potential tariff policies.
The FTSE 100 closed 2024 with its fourth consecutive year of gains, while the FTSE 250 recorded its second straight year of growth.