While the European indices lost their initial zeal, the Dow Jones opened higher on Friday, pleased by the latest dovish comments from the Federal Reserve.
With the question now turning to how deep the rate cut will be, rather than the likelihood of the cut itself, the Dow added just shy of 100 points after the bell, pushing it back above 27300 in the process.
In contrast the FTSE, which had been teasing 7550 for the umpteenth time this week, found itself retreating to 7500, its half a percent-plus rise eroded as the day went on. The DAX and CAC were in similar situations; the German index is now flat at 12240, while its French cousin actually fell 0.1%, a sharp turnaround from its initial 0.7% increase. This largely as the banking sector across the continent fell into the red, with Lloyds (LON:LLOY), RBS (LON:RBS) and Deutsche Bank (DE:DBKGn) all down more than 1%.
Sterling had a mixed end to the week. Against the dollar the pound gave back 0.2%, taking it under $1.252, while against the euro it was up the same amount, pushing past €1.1148. Things have turned around for the currency in the last couple of sessions, boosted by Thursday’s retail sales/anti-prorogation amendment brace. It is in for an interesting time of it next week, however – Tuesday sees the results of the Tory leadership race, with Jeremy Hunt or, more likely, Boris Johnson becoming Prime Minister on Wednesday.