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FTSE Locks In End-of-Week Gains

FRIDAY MARKET UPDATE: UK markets ended the week with solid gains and shares in Rio Tinto bounced back from earlier weakness

Alanna Petroff 18 January, 2013 | 5:38PM

The FTSE 100 and FTSE 250 indices climbed higher on Friday, spurred on by some better-than-expected economic data out of China. The FTSE 100 jumped up by 22 points, or 0.4%, to close the week at 6,154. The FTSE 250 also pushed ahead by 99 points, or 0.8%, to close at 12,946.

"The Chinese data out last night ... showed retail sales in the world’s second largest economy [rose by more] than expectations, but it was the all-important GDP figure from the country that also surprised to the upside as well and this sent Asian markets higher overnight," said Angus Campbell, head of market analysis at Capital Spreads.

"This good GDP number marked the end of over two years of continuous decline and has been talked up for some time now with people saying that China is turning a corner again, back towards increasing growth which is set to drive the global economy," he said.

Investors seemed unfazed by lacklustre UK retail sales figures for December. While retail sales increased compared to the same period from December 2011, the increase was smaller than expected. Furthermore, sales fell by 0.1% in December compared to the previous month, November 2012.

This data point to continued weakness on the High Street, which recently saw HMV, Jessops and Blockbuster enter administration.

Rio Stages a Bounce Back

Shares in Rio Tinto (RIO) bounced back by nearly 2% after declining on Thursday. The miner announced ahead of the previous trading session that it was going to register a $14 million writedown for 2012 and it was ousting CEO Tom Albanese. The company appointed iron ore chief executive Sam Walsh to take over the CEO position.

"It's taken a long time, but Rio Tinto CEO Tom Albanese has finally fallen on his sword (or was felled by his sword) and is replaced by respected Rio iron ore head Sam Walsh," stated Taylor in a recent research report. "[The Albanese] departure is a positive for Rio and despite headline-grabbing writedowns of $14 billion, we expect Rio shares to rally as the news is thoughtfully digested."

Market Performance: January 14 - 18

FTSE 100 Index: +0.54%
FTSE 250 Index: +1.16%
FTSE All Share: +0.62%
FTSE Small Cap: +0.66%
FTSE AIM 100: -0.18%
FTSE Fledgling: +0.58%

To see the other risers and fallers on the FTSE 100, check out Morningstar's Heat Map.

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Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Rio Tinto PLC3,288.50 GBX-0.51
About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.