FTSE 100 steady with cenbank decisions in focus; Sainsbury's shines

We may start to see a change in that the BoE might be a little bit more cautious," added Grant. Britain's central bank was one of the first among global peers to begin raising rates, and has added 340 basis points since December 2021 to tame inflation now running at more than five times its 2% target.

UK's FTSE 100 eked out gains on Friday as investors maintained a cautious stance ahead of a slate of central bank decisions next week, while shares of Sainsbury's jumped after retail firm Bestway took a stake in the British supermarket group.

The blue-chip FTSE 100 index edged 0.1% higher, while the midcap FTSE 250 index added 0.2%. Wall Street's main indexes closed higher on Thursday after a raft of data showed the U.S. economy fared better than expected in the fourth quarter, allaying concerns about an immediate recession but also likely emboldening the Federal Reserve to keep key interest rates higher.

"The likelihood of avoiding a deep recession in many markets has increased, so there was a reason for optimism. But at the same time, the market may have got a little bit too excited," said Lewis Grant, senior portfolio manager for global equities, at Federated Hermes. "Earnings from some of the bellwether names are just not quite filling investors with the same sort of optimism."

Major central banks including the U.S. Fed, the European Central Bank, and the Bank of England (BoE) will announce monetary policy decisions next week, with traders betting on a 50-basis-point rate hike from the BoE. "The UK has its own set of unique and partly self-inflicted issues that do make things a bit more difficult from the political and economic perspective. We may start to see a change in that the BoE might be a little bit more cautious," added Grant.

Britain's central bank was one of the first among global peers to begin raising rates and has added 340 basis points since December 2021 to tame inflation now running at more than five times its 2% target. Sainsbury's rose 4.7% to the top of the FTSE 100 after Bestway amassed a 3.45% stake in Britain's second-largest supermarket group, but said it is not considering a takeover offer.

Superdry tumbled 15.3% after the fashion retailer cut its profit forecast for the year and forecast to broadly break even as its wholesale segment underperformed.

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