THE London market closed higher with traders cheered by strong US economic data, soothing a hangover caused by Thursday's stark warning by the Bank of England governor about the cost of a Brexit vote.
American retail sales posted their biggest rise in a year, jumping by 1.3% year-on-year in April, restoring confidence in consumer spending in the world's largest economy.
The FTSE 100 Index lifted 34.3 points to 6138.5, following falls early in the session and a 58-point slump on Thursday after Bank governor Mark Carney said a Brexit vote could tip the UK into a "technical recession" and see the pound plunge in value.
Traders had been glum because the Bank had not only kept interest rates at 0.5%, where they have been since March 2009, but also revised down UK growth forecasts for three years.
But the strong US data changed the mood, helping to send Germany's Dax up almost 1%, while the Cac 40 in France was 0.5% higher.
However, in New York the Dow Jones Industrial Average slipped by around 17 points in early trading due to a string of weak corporate earnings.
The pound was a cent lower against the US dollar at 1.43, on the strong US retail data that was led by car sales.
Sterling was slightly higher against the euro at 1.27.
The London market also defied disappointing Office for National Statistics construction data, which showed that output fell 3.6%, compared with the month before, due to declines in the amount of new work being carried out as well as repair and maintenance activity. Economists had forecast a slide of 3.2%.
March marked a third consecutive decline in month-on-month construction output - the first such run since the monthly series started in 2010.
Among stocks, satellite operator Inmarsat was one of the biggest fallers in the top flight - down almost 4%, or 33.5p, to 760.5p - after a series of recent broker downgrades following disappointing quarterly results last week.
Supermarket Tesco was the strong riser among top flight stocks, as it emerged that chief executive Dave Lewis has been awarded an annual bonus of £2.9 million, taking his total pay for the year to £4.6 million.
The figures were revealed in the supermarket's annual report. It said the payouts were awarded after "financial targets for sales and operating profit ... were met almost fully".
Tesco swung back into the black in February, notching up a pre-tax profit of £162 million compared with a £6.4 billion loss a year earlier.
Shares in Tesco lifted 6.1p to 161.7p, while Morrisons also rose 3p to 189.5p.
The biggest risers on the top flight were Tesco up 6.1p at 161.7p, Fresnillo up 40p at 1115p, Standard Chartered up 16.4p at 506.5p and Lloyds Banking Group up 1.5p at 66.4p.
The biggest fallers in the top flight were Mediclinic International down 42p at 835.5p, Inmarsat down 33.5p at 760.5p, Coca-Cola HBC down 49p at 1348p and ITV down 5.1p at 204.9p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here