By Carla Mozee and Sara Sjolin, MarketWatch

U.K. blue-chip stocks ended higher Friday, helped by a fall in the pound against the dollar after upbeat U.S. data lured investors into the greenback.

Home builders were hit after Berkeley Group Holdings PLC, one of Britain's biggest developers, offered a downbeat view of the market.

How markets are moving

The FTSE 100 index ended 0.3% higher at 7,164.14, after opening slightly in the red. For the week, the London benchmark closed 0.8% lower, paring back after a 2.2% rally last week.

The pound traded at an intraday low of $1.3889 shortly before the market close, down from $1.3936 late Thursday in New York. A weaker sterling can help boost the FTSE 100, as many of the index's components make the bulk of their earnings overseas. When the pound falls, their revenues rise when converted back into the British currency.

What's driving markets

Investors were in the mood to end the week on an upbeat note, shrugging off concerns over more instability in the U.S. administration. Media reports said President Donald Trump was planning to sack his national security adviser H.R. McMaster, which would be the second high-profile firing from the White House this week. Secretary of State Rex Tillerson was fired on Tuesday and replaced with CIA Director Mike Pompeo.

The FTSE index moved a leg higher in the afternoon after upbeat data from the U.S. There, industrial production rose the most in four months in February (http://www.marketwatch.com/story/industrial-production-jumps-11-in-february-biggest-gain-in-four-months-2018-03-16), while the University of Michigan's consumer sentiment index jumped to a 14-year high in March (http://www.marketwatch.com/story/consumer-sentiment-hits-14-year-high-as-low-income-households-report-better-conditions-2018-03-16). U.S. stocks also traded higher (http://www.marketwatch.com/story/us-stock-futures-struggle-as-political-worries-return-to-haunt-investors-2018-03-16).

The encouraging data spurred a rally in the dollar (http://www.marketwatch.com/story/dollar-slumps-to-9-day-low-against-the-yen-after-reports-trump-plans-to-sack-mcmaster-2018-03-16), in turn yanking the pound lower.

What are strategists saying?

"Dollar strength has been seen repeatedly throughout the week, and this afternoon has been no exception, with the greenback on the up against the euro, sterling and the Aussie," said Chris Beauchamp, chief market analyst at IG, in a note.

"Whether this dollar rally has much further to run remains to be seen, but a slightly more hawkish Fed next week could be enough to spark more short-covering. In which case, the current strength we have seen in European markets could have some more life in it," he added.

Stock movers

Berkeley Group Holdings PLC (BKG.LN) dropped 5.4% as the home builder said while trading conditions in London and the southeast of the U.K. remain stable it doesn't plan to step up building. (http://www.marketwatch.com/story/berkeley-projects-no-increase-in-production-2018-03-16)

"The operating environment and its impact on transaction volumes, whilst sufficient for the business plan and five-year profit guidance period that ends at 30 April 2021, do not support the step-up in Berkeley's production levels that these markets so badly need," said Berkeley.

Shares of other home builders also fell. Taylor Wimpey PLC (TW.LN) dropped 1.4% and Persimmon PLC (PSN.LN) gave up 1.3%.

Off the FTSE 100, NEX Group PLC (NXG.LN) rallied 30% after confirming that it's received a preliminary takeover approach from CME Group Inc (http://www.marketwatch.com/story/nex-confirms-takeover-approach-by-cme-2018-03-16). (CME) .

 

(END) Dow Jones Newswires

March 16, 2018 13:20 ET (17:20 GMT)

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