FTSE 100 index closes the week near record level

Britain’s leading equity index closed the week for a sizable gain, despite logging a drop on Friday, as confidence in a speedy EU recovery and growth in the UK and US led investors to more stocks.

FTSE 100 was down 0.33% to close at 6 855.10 points on Friday, logging only the second daily drop in 9 sessions and standing for a weekly gain of ~0.5%. The blue-chip index added 0.06% on Thursday, reaching 6 904.50, the highest level since December 1999.

This week saw a number of key economic gauges, data and decisions. By far the most impact on FTSE 100, and on all the global indices and currencies, had the ECB decision to cut deep into the benchmark interest rate, in addition to begining a €1tn bond-purchasing program. The unexpectedly decissive move comes as the Eurozone struggles to liven its economy, logging a series of downbeat data recently.

Friday saw the Bloc record zero growth on a quarterly basis for Q2 of 2014, supporting the validity of ECBs decision. Year-on-year, economic expansion was logged at 0.7%, compared to the preceding period’s 0.9%, further pressuring the euro.

Separately, Bank of England introduced no changes to its monetary stance. According to analysts, BoE’s next step looks to be an interest-rate hike in the first half of next year, provided the UK economy continues to improve. Yesterday’s FTSE 100 multi-year high was seen as investor confidence about the future.

Meanwhile, across the Atlantic there was a bit of mixed sentimet, after new payrolls were reported at just 143 000, well below the expected 225 000, while the unemplyment rate dropped to a 6-year low. Earlier, ISM reported its manufacturing PMI and services PMI gauges for the US, both of which were logged high above expectations at three-year highs, stoking confidence in the world’s largest economy.

On the geopolitical scene, a shaky ceasefire was signed between Kiev and pro-Russian rebels in Ukraine, though fighting was still reported well after it should have come in effect.

The peace talks are still ongoing and come after rebels directly assisted by Russian military, according to NATO, made significant advances against government troops recently. The EU could also announce further sanctions against Russia today.

Meanwhile, NATO holds its summit in Wales, with security in Eastern Europe and response to Russian aggression high on the agenda. Ukraine lawmakers yesterday approved of the country’s decision to bid for NATO membership, souring relations with the Kremlin just ahead of the scheduled peace talks with the rebels.

Top movers

This weeks FTSE 100 gains were led by Standard Lifes rally on a lucrative deal, helping the companys stock add 8.35% this week alone, nearing a record value.

Other top gainers were Carnival and Burberry, adding 5.70% and 5.00%, respectively.

The big loser this week was BP, which shed 6% of its value on Thursday after a US judge found the company guilty of gross negligence, though shares rebounded on Friday to dispell a worst-week scenario and settle the week just 3.08% lower.

Another top company which saw a bad week was Royal Bank of Scotland, which closed the week 4.36% lower.

Next week

Several key readings are due next week. The US will probably report moderately growing retail sales, a key metric for gauging consumer spending, which generates 80% of US GDP. Elsewhere, the Eurozone is set to post employment and industrial production figures, while China will release foreign trade and CPI data.

In the UK, there will be house price gauge readings, as well as data on industrial and manufacturing production, and key trade balance figures.