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FTSE 100 Continues Recovery

FRIDAY MARKET UPDATE: The FTSE 100 recovered some lost ground by the end of the trading day, but the benchmark index is still off by 1.3% for the week

Alanna Petroff 8 February, 2013 | 6:32PM

The FTSE 100 pushed higher on Friday, which helped the large-cap index claw back from some sharp losses earlier in the week. The index is closing the week with a 1.3% loss. Meanwhile, the mid-cap FTSE 250 index also moved ahead on Friday and ended the week with a 0.75% gain. The markets are still trading near a 4 1/2 year high that was set last week.

"We are ending the week on a positive note as the markets rebound from yesterday’s sell-off," said IG market analyst, David Madden.

"Despite the Libor-rigging scandal tarnishing the financial industry and Mark Carney’s muted comments regarding monetary easing, the banking sector [led] the way. Traders have short memories when it comes to bad news; yesterday’s biggest losers -- the Royal Bank of Scotland (RBS) and Barclays (BARC) -- are among today’s winners," he said. 

The markets also got a boost from some better-than-expected trade data out of China and some clarity over the European Union's budget.

"Chinese exports grew 25% against an expected growth of 17%, while imports grew 28.8% – showing strong domestic demand," said Fiona Cincotta, a market analyst at City Index. "Chinese data has really been under the spotlight so far this year as hope increased that the world’s second-largest economy has avoided a crash landing."

Meanwhile, in Europe, union leaders agreed to a new budget framework that will see EU spending fixed at €960 billion over the next seven years. This spending level is lower than an original proposal that projected just over €1 trillion in spending. Prime Minister David Cameron had insisted that the union cut back on spending.

Upbeat US Markets

US markets were higher on Friday morning after encouraging trade data from both the US and China.

The US trade gap narrowed by 21% in December to $38.54 billion, the biggest one-month contraction in almost 4 years. Lower oil prices were a major contributor to the decline. The unexpectedly large decline may lead to a large upward revision in fourth-quarter GDP.

At midday the Dow, S&P 500 and Nasdaq indices were up 0.3%, 0.5% and 0.9%, respectively.

Mixed Markets In Asia

Asian markets ended mixed on Friday with the Nikkei dropping sharply. It was weighed down by index heavyweight Sony’s biggest single-day share price fall in years after the electronics maker reported third quarter results that missed estimates.

The Nikkei fell 1.8%. The Shanghai Composite was up 0.6% while the Hang Seng edged up 0.2%. The Sensex gave up 0.5% while the S&P/ASX All Ordinaries gained 0.7%.

FTSE Market Performance: February 4 - 8

FTSE 100 Index: -1.31%
FTSE 250 Index: +0.75%
FTSE All Share: -0.99%
FTSE Small Cap: +0.63%
FTSE AIM 100: +0.72%
FTSE Fledgling: +0.71%

To see the top winners and losers on the FTSE 100 each day, check out Morningstar's Heat Map.

Morningstar's Rouhan Sharma and Jeremy Glaser contributed to this article.

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About Author Alanna Petroff

Alanna Petroff  is a financial journalist with Morningstar UK.