London stocks rise on miners, GDP data boost; Burberry sinks

UK stocks climbed nearly 1% on Friday, underpinned by precious metals miners tracking bullion prices higher, and as investors cheered data that signalled the British economy grew stronger than expected in November. The blue-chip FTSE 100 was up 0.8% and the mid-cap FTSE 250 index gained 0.9%.

UK stocks climbed nearly 1% on Friday, underpinned by precious metals miners tracking bullion prices higher, and as investors cheered data that signalled the British economy grew stronger than expected in November.

The blue-chip FTSE 100 was up 0.8% and the mid-cap FTSE 250 index gained 0.9%. Still, both the indexes were on track to book losses for a second consecutive week. Shares of Burberry dropped 6.7% to a three-year low after the British luxury fashion brand warned its full-year results would fall below its previous outlook following a slowdown in key December trading period.

The luxury retailer dragged the personal goods sector down to an over 11-year low. Vistry Group climbed 2.7%, boosting the mid-cap index, as the British affordable homes builder said easing of mortgage rates in recent weeks was encouraging and this would help stimulate demand in 2024.

Precious metals miners were the top gainers with a 1.6% jump, boosted by firmer gold prices as global strikes on Yemen added to fears of further escalation in the Middle East conflict, enhancing bullion's safe-haven appeal. Meanwhile, Britain's gross domestic product expanded by 0.3% in November, figures from the Office for National Statistics showed on Friday, slightly beating economists' forecasts for 0.2% growth in a Reuters poll.

"GDP growth over the last year has been skittish to say the least, with almost every month of growth followed by a month of decline," said Michael Field, European Market Strategist, Morningstar. "That said, the UK has thankfully managed to avoid a recession over the period – something few economists gave them hope for just one year ago."

The UK's 2-year gilt yield was down more than 8 basis points on Friday, and was last trading at 4.192%. The money markets priced in 126 bps of rate cuts in 2024 after the data, compared with 120 bps prior to the release. Goldman Sachs lowered Britain's 2024 economic growth forecast on Friday to 0.5% from an earlier estimate of 0.6%.