The FTSE 100 weekly gain was confirmed on Friday as rising gold prices lifted mining stocks and a brighter-than-expected UK private sector reading added to the positive mood. The index closed up 68.40 points, or 0.6%, at 10,816.56, ending a choppy week on solid ground.
The FTSE 100 is the index of the 100 largest companies listed on the London Stock Exchange, and it often takes its cue from global commodity prices and economic data released through the week.
UK private sector hits four-month high
The main catalyst on Friday was a set of figures pointing to a pickup in UK business activity. The S&P Global flash composite purchasing managers’ index (PMI), a monthly survey measuring output across both manufacturing and services, rose to 52.5 points in August, a four-month high, up from 52.2 in July. Any reading above 50 signals expansion.
According to S&P Global, output growth was the strongest since August 2024, with a faster rise in service sector activity more than offsetting a marginal decline in manufacturing production. The services PMI rose to 52.8, a six-month high, while the Flash UK Manufacturing PMI fell to 47.3, a three-month low, confirming the split between a resilient services economy and a still-struggling factory sector. S&P Global also reported that business activity expectations for the year ahead edged up to their highest since October 2024.
JPMorgan analyst Allan Monks said the report “sends another positive message on growth” and “points to modest upside risks to our third-quarter growth forecast.”
Not everything pointed upward. The Office for National Statistics (ONS) said UK retail sales volumes rose 1.6% year-on-year in July, well below June’s 3.8% pace and short of the 2.2% increase that had been forecast. Month-on-month, retail sales fell 0.5%. Separate ONS figures showed public sector net borrowing totalled £1.8 billion in July, up from £1.07 billion a year earlier, as spending growth outpaced receipts. That reading came in well above forecasts, which had predicted an on-year fall in borrowing to about £300 million.
Gold price lifts FTSE 100 miners
Commodity prices did much of the heavy lifting for the FTSE 100 weekly gain. Gold traded at $4,605.34 an ounce on Friday, up from $4,518.45 on Thursday, with silver rising 2.1% and copper climbing 1.6%. Antofagasta, Endeavour Mining and Anglo American gained 5.4%, 4.1% and 2.6% respectively.
Goldman Sachs analyst Lina Thomas attributed part of the gold rally to a sharp rise in call option demand. Ms Thomas explained that renewed demand for global macro-policy hedges has created a mechanical price amplifier: “As gold prices approach key strike levels, dealers that have sold these calls may be forced to buy gold to hedge their exposure, accelerating the rally. Conversely, any pullback in the gold price can prompt dealers to unwind those hedges, adding selling pressure and amplifying the price downside.” Ms Thomas added that Goldman Sachs continues to “see significant upside risk to our $4,900 per ounce end-2026 gold forecast, but also greater two-sided volatility to the gold rally.”
Brent crude for October delivery traded at $94.08 a barrel, up from $93.53 late Thursday.
Bond markets told a less comfortable story. The yield on the US 10-year Treasury widened to 4.74% from 4.70% at Thursday’s London equity close, and the 30-year stretched to 5.27%. Dan Coatsworth, head of markets at AJ Bell, said the relief offered by a US Treasury intervention earlier in the week has proved “short-lived”. “Underlying factors, like the sheer scale of US government borrowings, having crossed the $40 trillion threshold, the size of deficits across the West, and the ongoing push higher in oil prices, mean yields have ticked up once more,” he said.
Elsewhere on the markets, the FTSE 250 ended up 210.16 points, or 0.9%, at 24,718.82. JD Sports Fashion rebounded 5.6% on the FTSE 100 after Thursday’s sharp fall. On the FTSE 250, Gamma Communications rose 12% after it named Waterland Private Equity Investments and Giacom Group as potential suitors. Domino’s Pizza climbed 5.2% after Shore Capital upgraded its stance to “buy.” Hunting fell 14% after cutting its 2026 guidance, with the Middle East conflict cited as having “caused some delays to tendering.”
Looking ahead, Federal Reserve chair Kevin Warsh is scheduled to speak at the Jackson Hole symposium on Friday, with US personal consumption expenditures inflation data also due later in the week.
