London stocks were largely flat on Friday, with investors taking a cautious stance ahead of a crucial U.S. inflation report, even as the main indexes are poised for weekly gains. The market has been buoyed by signs of cooling domestic inflation in the UK and easing Sino-U.S. trade tensions, which have helped restore investor confidence in both international and domestic equities.

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Key Highlights

• FTSE 100: little changed, hovering near a record high
• FTSE 250: down 0.1%, near early 2022 levels
• UK retail sales: unexpectedly rose for the fourth consecutive month
• NatWest: hits near two-decade high after strong Q3 results
• Gold miners: fall on lower gold prices

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Market Performance

The FTSE 100, representing large-cap, internationally focused companies, remained largely unchanged, on track for its biggest weekly gain in over six months. Relief over easing U.S.-China trade tensions helped push investor sentiment higher.

Meanwhile, the FTSE 250, which tracks mid-cap domestic companies, slipped 0.1%, but is set for its steepest weekly rise in four months. This increase follows unexpectedly low UK inflation figures, which boosted market expectations that the Bank of England may cut interest rates by 25 basis points in December.

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Retail Sector Boost

UK retail sales rose unexpectedly for a fourth consecutive month, driven primarily by tech and jewellery sales. The broader retail sector gained 1%, reflecting resilience in consumer spending despite ongoing economic uncertainties.

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Corporate Earnings Highlights

Corporate earnings have provided further support for the London market:

• NatWest (NWG.L): rose 2.6% to a near two-decade high, after reporting a 30% increase in third-quarter profit and upgrading its 2025 performance target.
• WH Smith (SMWH.L): gained 3.4%, boosted by an upgrade from Peel Hunt, highlighting strong performance in travel retail.
• London Stock Exchange Group (LSEG.L): jumped 4.1% after at least three brokerages raised target prices following robust Q3 results.

In contrast, precious metal miners fell 2%, reflecting a profit-taking sell-off in gold, which is on course for its first weekly decline in ten weeks.

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Investor Focus on US Inflation

Market attention is now firmly on U.S. consumer price data, due later in the day, amid the ongoing U.S. government shutdown. Investors are closely watching these figures, as they will play a key role in shaping the Federal Reserve’s policy decision at next week’s meeting.

The combination of robust UK earnings, steady retail growth, and global macroeconomic developments is keeping London markets relatively calm, even as uncertainty lingers ahead of the U.S. data release.