Early market roundup: FTSE 100 closes in on 11,000 after US rally

London's blue chip index hit its highest level ever again on Friday, after a boost in US and Asian tech stocks lifted sentiment, after three major central banks all decided to hold interest rates this week.

The Federal Reserve, Bank of England and Bank of Japan all left rates unmoved.

The FTSE 100 index rose 83.33 points, 0.8%, at 10,980.60 on Friday morning, earlier hitting its best ever level of 10,985.46. It means the FTSE 100 is just a short stride away from the 11,000 threshold. It had only closed above 10,000 for the first time back in January and ended a day above 9,000 for the first time back in July 2025.

The FTSE 250 added 140.22 points, 0.6%, at 24,219.36, and the AIM all-share added 3.26 points, 0.4%, at 768.16.

In Paris, the CAC 40 was up 0.9%. The DAX 40 in Frankfurt rose 1.0%.

US tech shares were in focus overnight, as earnings continued to pour in.

Apple slumped 6.3% in extended trade after the iPhone maker warned supply constraints will increase significantly in the current quarter.

As a result, the Cupertino, California-based technology company expects September quarter revenue, Apple's fourth quarter, to grow between 9% and 11% year-over-year, below consensus which forecast growth of around 12%.

Chief Financial Officer Kevan Parekh told analysts the September quarter will be impacted by a foreign exchange sequential headwind of about 2.5 percentage points while he expects the impact from supply constraints to increase significantly sequentially, impacting the iPhone, Mac and iPad.

Amazon raced 9.6% higher. The e-commerce and cloud computing firm said second quarter net income multiplied to USD62.65 billion from USD18.16 billion a year prior. Diluted earnings per share jumped to USD5.75 from USD1.68, far surpassing the USD1.8 Visible Alpha consensus estimate.

Revenue totalled USD200.61 billion, up 20% from USD167.70 billion and better than the USD196.4 billion consensus.

In the US on Thursday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.2%, the S&P 500 up 1.7% and the Nasdaq Composite up 2.8%.

The US tech rally on Thursday fuelled gains in Asia. Tokyo's Nikkei 225 jumped 4.0%, while the Kospi in Seoul, heavily exposed to a chip sector plunge this week, soared 18%. Despite the Kospi still sitting 1.4% lower for the week, it represents a remarkable turnaround after shedding 11% on Tuesday and 6% on Wednesday. Stocks including Samsung Electronics and SK Hynix, at the heart of the tech tantrum in Seoul this week, ended 27% and 30% higher on Friday.

In China, the Shanghai Composite rose 0.7%, though the Hang Seng Index in Hong Kong edged up 0.1% in afternoon trade. Sydney's S&P/ASX 200 also rose 0.1%.

Sterling rose to USD1.3451 early Friday, from USD1.3439 at the time of the previous London equities close. Against the euro, it rose to EUR1.1679 from EUR1.1671. The euro faded to USD1.1513 from USD1.1516. Against the yen, the dollar rose to JPY160.29 from JPY159.44.

Over the course of the week, the dollar has lost ground against major counterparts. This time last week, the pound fetched USD1.3339, the euro USD1.1397 and against the yen, the buck bought JPY163.71.

"The post-FOMC dollar selloff accelerated yesterday. Markets remained concerned that the Federal Reserve may be reluctant to translate its price stability rhetoric into effective policy tightening. Combined with Fed Chair Kevin Warsh's ambiguity about the reaction function, this continued to weigh on USD, whose summer strength had been largely driven by Fed hike expectations," analysts at ING commented.

"USD/JPY has been on a rollercoaster, falling 3% yesterday on Japanese intervention, only to bounce back near 2% overnight. The Nikkei reported that Japanese authorities did indeed intervene yesterday and that the Fed, as it did in January, also checked rates yesterday afternoon."

The Bank of Japan on Friday decided to leave its benchmark interest rate unchanged.

Following the latest July monetary policy meeting, the central bank's policy board left the uncollateralised overnight call rate at around 1.0% in an eight-to-one vote.

The decision was widely expected based on the consensus forecast cited by FXStreet.

Takata Hajime was the lone dissenter among policymakers, calling for the central bank to lift its benchmark rate to around 1.25%.

The yield on the 10-year US Treasury eased to 4.65% early Friday from 4.67% at the time of the London equities close on Thursday. The 30-year yield eased to 5.18% from 5.21%.

A barrel of Brent eased to USD87.11 early Friday, from USD89.84. Gold traded at USD4,066.19 an ounce, down from USD4,099.23.

In London, NatWest rose 3.9%. The lender reported a second quarter earnings beat, lifted its guidance and announced it will "consider share-buybacks from full year 2026, six months earlier than previously planned".

Sainsbury's rose 3.6% as it announced the sale of its Argos arm. It expects proceeds of at least £120 million.

"We see this deal as a particularly good outcome for Sainsbury's shareholders in the here and now, plus tomorrow too," analysts at Shore Capital Markets commented.

"Post-Argos, completion is set for February 2027, Sainsbury should benefit from enhanced focus with improved margin, returns, and cash flows, which we think the equity market should like; future uncertainty and distraction being removed is also a major positive point that we believe can support the ongoing group equity rating. It has not been easy, but we commend CEO, Simon Roberts and his team on this work."

IG Group fell 6.6%, the worst FTSE 100 performer. The London-based online trading platform's total revenue for the first six months of 2026 increased 18% to £642.8 million from £545.2 million a year prior, it said after the market close on Thursday. Pretax profit fell 6.8% to £227.7 million from £244.3 million.

In addition, it agreed to acquire US fantasy sports and prediction markets operator Underdog for around USD1.3 billion.

Headlam rose 8.8%. The floor coverings distributor said trading "continues to be challenging", but revenue in July so far is up 3.5% from June.

The firm is currently undertaking a full strategic review.

"The company continues to progress a review of its options which includes, but is not limited to, further support from its existing lenders, further property disposals, a wider group refinancing, new partnerships and other broader corporate actions, and the company is finalising a plan which it is seeking to execute. Specifically, retaining the Coleshill HQ property as one of the company's key freehold properties has been determined as part of the strategic options plan, and therefore a sale and leaseback of this asset is no longer being pursued," Headlam says.

In addition, a refinancing process for its debt package has progressed, with offers received. These would "advance additional liquidity" if completed at the terms currently proposed.

"At this stage there can be no certainty that the group will be successful in implementing any of these options, or any alternative solution to improve the group's financial position, within a reasonable timeframe, or at all. With a strengthened balance sheet, the board believes it would be able to alleviate the current liquidity issues that are negatively impacting its ability to trade effectively and to fund and allow time to execute the strategic options plan with the aim of returning Headlam to a profitable and cash generative business as quickly as possible," Headlam adds.

Still to come on Friday is a eurozone inflation reading at 1000 BST.

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