In a return to the "bad news is good news" paradigm, London's leading shares were mostly firmer after a dismal gross domestic product reading.
The FTSE 100 closed at 7,502, up 81 points, with the many big dollar earners among the constituents enjoying a good day as sterling got hammered on the foreign exchange markets.
Sterling was down by around 1% against the dollar as the market bet that the Bank of England would pass on the option of increasing its benchmark interest rate at May's meeting of its policy makers.
"GDP in the United Kingdom grew just 0.1 percent in Q1, with today's print significantly weaker than consensus expectations. While growth should eventually pick up, we now look for the BoE to remain on hold until August," said Wells Fargo Economics Group.
Richard Falkenh??ll, a senior FX strategist at Nordic corporate bank, SEB, went further and said that "a rate seems unlikely before 2019".
Serial disappointer Royal Bank of Scotland Group PLC (LON:RBS) actually managed to beat the market's expectations with its first quarter numbers but the shares dipped as analysts raised concerns about a looming fine from US lawmakers and tough competition in mortgage lending.
$RBS #Royal Bank of Scotland Group plc RBS Starts 2018 Well; While Results Are Somewhat Encouraging, Litigation Remains as Downside Risk: Royal Bank of Scotland booked GBP 792 million attributable profit for the first quarter, more than triple its GBP... https://t.co/lvy8LOgHqo pic.twitter.com/1hRwqQiy1n
- ResearchPool (@ResearchPool) April 27, 2018The shares closed the day at 268.4p, down 4p.
US consumer sentiment was lower than market expectations for April, according to data from the University of Michigan's index on the matter.
Sentiment for the month fell to 97.8 from 101.4 in March, below market expectations of 100.5.
The slip reverses most of the gains from the last two months, with the decline being shared across all age and income groups and regions of the country.
In other news, outsourcer Interserve (LON:IRV) said it had completed a ?200mln refinancing that it had agreed in principle last month.
The group will receive ?196.6mln in cash facilities and ?94.5mln in critical bonding lines, with the package subject to conditions that the company expects to satisfy before it announces its full-year results on 30 April.
Shares in Interserve were down 4.5% at 106.2p in late-afternoon trading.
The greenback was higher against its major currency rivals as the US economy grew more than expected in the first quarter.
Against the euro the dollar moved up to a 3 and a half month high of US$1.2056, while it maintained its 2 month peak against sterling at US$1.3746.
Meanwhile, brokers across the EU are preparing for a rule change on Monday when fund managers will be forced to reveal their top trading firms for the first time.
The aim of the move is to try and provide more transparency into trading and put pressure on brokers and fund managers to show that they are offering the best deals to investors.
Fund managers and brokers must state annually their top five venues by order flow for executing their stock, bond or exchange-traded-funds trades.
A flurry of lists are scheduled to be published on Monday and Tuesday across the EU, and may also catch the eye of the UK's Financial Conduct Authority.
The US economy grew 2.3% in the first quarter, the slowest pace in a year caused mainly by a large retreat in consumer spending, however the growth was still above expectations as solid business investment and a smaller trade deficit offset heavier losses.
Consumer spending rose slightly by 1.1% after a 4% increase in the final quarter of last year which was the biggest in three years.
However, businesses offset the shortfall, with investment in structures such as drilling rigs and office space doubling to 12.3% while equipment spending rose 6.1%.
In a surprising development, a more positive trade picture also helped to bolster the GDP figures, with exports rising 4.8% while imports moved up 2.6%.
Nancy Curtin, chief investment officer at Close Brothers Asset Management, said: "These weaker Q1 growth figures are unsurprising in the context of historic seasonal weakness of this quarter in the US, exacerbated by severe weather. We should not be disheartened.
"Earnings have stabilised, and the benefits of last year's tax reforms are starting to materialise, though the actual spending of money will take time. While the political environment has been volatile, the strength of the global supply network has helped to ensure a smooth start to the year.
She added: "Investors have reaped the rewards of the growing economy, and it looks like Trump may be able to deliver on his bombastic growth ambitions. This needs to be kept in mind during concern around the tariff war. As both China and Russia have their eyes set on ambitious expansionary plans, neither will be keen for those plans be scuppered by tariff discussions."
In the markets, earnings are likely to be a major driver, with investors digesting several sets of strong results from tech giants Amazon, Microsoft (NASDAQ:MSFT), and Intel (NASDAQ:INTC) as well as a disappointing showing from energy major Exxon Mobil (NYSE:XOM) whose first quarte earnings fell short of estimates.
Markets in the US seem set for a mixed open this morning after surging in the previous session as strong corporate results buoyed markets.
While the week seems likely to end on a more downbeat note, technology stocks are continuing to show signs of strength in the pre-market, with e-commerce giant Amazon Inc (NASDAQ:AMZN) climbing over 7% after it posted almost double profits late on Thursday in addition to sales growth and a 20% increase in subscription prices for its Prime service.
The first quarter estimates of US economic growth will also be in focus today, as it is expected to show a slowdown, with business investment as the key indicator.
International politics could also garner some attention, with the recent meeting between North Korean leader Kim Jong Un and South Korean president Moon Jae-in thought to be a key event in laying the groundwork for Donald Trump's planned meeting with Kim in the coming weeks.
The FTSE 100 continued its gains from this morning despite disappointing news on UK growth figures for the first quarter.
ONS data for the UK economy showed a sharp decrease in growth for the first three months of 2018 to just 0.1%, well below market expectations of between 0.3% and 0.4%.
The construction sector was the biggest downward pull, falling 3.3% in the period.
The worse than expected slowdown is seen by many analysts as the final nail in the coffin for any potential rate hike from the Bank of England, who will hold a meeting of its Monetary Policy Committee next month.
Analysts at Dutch bank ING said: "It now looks more likely than not that the Bank will opt to wait until August to buy more time to see how things evolve. But policymakers will also be acutely aware that this might be one of the best opportunities they get to raise rates this year."
In company news, Melrose Industries PLC (LON:MRO) has taken a step closer to full ownership of GKN PLC (LON:GKN) after receiving acceptances from more than 90% of shareholders for its takeover bid.
In a statement on Friday, Melrose said it will send formal compulsory acquisition notices to the GKN shareholders who are yet to accept its ?8bn cash and shares offer for the engineer.
As previously announced, the turnaround specialist said it will cancel GKN's shares on the London Stock Exchange, which is expected to take place by May 21.
In the small caps, a big riser was Sunrise Resources Plc (LON:SRES), who saw its shares surge 46% to 0.19p in lunchtime trading after it said it had signed a non-binding memorandum of understanding (MOU) that will pave the way for the first sales of perlite from its CS Pozzolan-Perlite project in Nevada, USA.
The miner said that under the terms of the MOU the parties would negotiate a purchase and sales agreement to sell/buy a minimum quantity of raw perlite over a specified period.
Retail sales in Ireland posted their sharpest monthly drop in seven months in March as the Central Statistics Office reported a 2.2% decline.
The data showed retail sales volumes were 2.8% lower than the same month last year, however if vehicle sales were excluded retail sales were in fact 2.3% above their March 2017 levels.
Meanwhile, a spokesman for UK prime minister Theresa May has said the latest GDP figures are "clearly disappointing" but the government was investing billions into infrastructure and the economy.
The spokesman told reporters: "The figures today are clearly disappointing, but the fundamentals of our economy are strong. It has grown every year since 2010 and unemployment is at a 40 year low, but we are not complacent,"
When asked whether Brexit has hurt economic growth, the spokesman said: "Growth was stronger than many expected after the referendum and what the government has been working towards is providing certainty for businesses."
Brent Crude is heading for a third week of gains as supply concerns were exacerbated by the possibility of the US reimposing sanctions on Iran.
US president Donald Trump will decide by May 12 whether or not to reimpose sanctions on Iran that were lifted as part of an agreement signed with six other world powers over its nuclear programme.
Brent has increased around 6% this month on the expectation of sanctions, which would most likely hit Iranian oil exports.
In company news, struggling rug retailer Carpetright (LON:CPR) has seen its shares rise after creditors approved a company voluntary arrangement yesterday as the company looks to cut back its estate and turn itself around.
Wilf Walsh, Carpetright chief executive, said: "Addressing our legacy property issues to reduce our fixed costs to sustainable levels is critical to securing Carpetright's recovery,
He added: "Receipt of creditor approval for the CVA proposal will enable us to take tough but necessary action to establish a right-sized estate of stores on economic rents, which is essential to restoring our profitability."
In mid-morning trading, Carpetright shares were up 8.9% at 42.5p.
The pound has fallen to an eight-week low against the greenback after the UK economy slowed much more sharply than predicted in the first quarter of 2018.
Sterling dropped 0.8% to US$1.3813 as GDP grew at its slowest pace since the fourth quarter of 2012.
The pound wasn't the only thing to drop following the results as a Reuters report saw market expectations for a Bank of England rate hike next month drop to 25% from 50%.
UK government bond prices jumped following the data, up 30 basis points while the yield on rate-sensitive two-year gilts fell to as low as 0.843%, its lowest since Tuesday.
Joshua Mahony, market analyst at IG, said that the data will have done little to help the cause of Sterling bulls, with the fall wrapping up what has been a "tumultuous fortnight for the pound".
In other currency news, the euro was steady against the other major currencies after the Eurozone Economic Confidence Index rose to 0.4 in April from 0.1 in March.
The euro was trading at US$1.2074 against the dollar and ?0.8738 against the pound.
For the first three months of 2018 the UK's gross domestic product (GDP) slowed sharply, rising by just 0.1% in the period.
It is the weakest quarterly growth since the fourth quarter of 2012, and worse than expected with analysts having previously predicted growth of between 0.3% and 0.4%.
According to the Office for National Statistics (ONS), the construction sector was the largest downward pull on GDP, falling by 3.3%.
Meanwhile, production increased by 0.7%, with manufacturing slowing to 0.2% but partially offset by an increase in energy production due to the lower temperatures.
Services industries were the largest contributor to growth, increasing by 0.3%, although the longer-term trends showed a weakening in growth for the sector.
While the snow had some impacts on GDP, particularly for construction and retail sales, the ONS said the effects were generally small, with very little impact observed in other areas sectors.
David Cheetham, chief market analyst at XTB, said: "The alarming slowdown will cause a major headache for the Bank of England who were as recently as last week widely expected to raise rates once more in May. The data of late has been consistently below forecasts and this now means that a move to increase next month would be a very bold call from Carney and in all likelihood the bank will decide to stand pat.
He added: "Today's disappointing data has all but ended any hopes for a May rate hike, with Carney and his fellow MPC members surely now likely to stand pat and bide their time before tightening policy further. Given the anaemic levels of growth in Q1 an increase in rates would threaten to tip the economy into recession and even though inflation continues to run well above target, it has shown signs of reaching a high-water mark of late with notable declines in recent months and this is really the only piece of economic data supportive of a hike."
British house prices rose a little faster in April after grazing a seven-month low in March, with weak economic growth and potentially higher interest rates expected to slow price rises over the year, according to mortgage lender Nationwide.
Prices were up 2.6% in the year to April, an increase on the 2.1% rise in March, with prices rising 0.2% on the month after a 0.2% fall in March.
House prices across the UK have been rising much slower since the Brexit vote in 2016, which hit consumer spending and confidence as inflation was pushed up by a fall in the value of the pound.
Nationwide's measure of house prices was growing by about 5% a year around the time of the Brexit vote, but the lender said it continued to expect house price growth of just 1% for 2018.
Nationwide's chief economist, Robert Gardner, said: "Looking ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates,".
The FTSE 100 opened just seven points higher at 7,428.45 with traders keeping their powder dry ahead of the first-quarter gross domestic product read-out later this morning.
Economists are expecting the rate of growth to slow to around 0.3% in the first three months of 2018, down from 0.4% the quarter before.
The Beast from the East, which hit the retail sector, and construction, are likely to provide the drag.
Asia's main markets ended the week in positive territory as the leaders of North and South Korea met at the demilitarised zone between the two countries, with each side pledging a new dawn in relations.
Back here in the UK, Royal Bank of Scotland (LON:RBS) encountered some mild profit-taking after its financial results met market expectations. Up 9% in the last month, the stock fell 1.4% in early trade.
"RBS continues to move away from its previous existence as something of a financial basket case, although the journey is far from over," said Richard Hunter, head of markets at Interactive Investor.
After the recent good run, backed by rising commodity prices, the miners also gave back some of their recent gains. That said, the sell-off was half-hearted with BHP Billiton (LON:BHP) down just 1%, with Rio Tinto (LON:RIO) and Fresnillo (LON:FRES) not far behind.
Sunrise Resources Plc (LON:SRES) said it has signed a non-binding memorandum of understanding (MOU) that will pave the way for the first sales of perlite from its CS Pozzolan-Perlite project in Nevada, USA.
Feedback plc (LON:FDBK) has announced that its subsidiary company, Feedback Medical Limited, has signed a two-year agreement with Royal Papworth Hospital NHS Foundation Trust to support and maintain its Cadran picture archiving communication system (PACS), which provides decision support for scan analysis..
Highlands Natural Resources Plc (LON:HNR) told investors that drilling has restarted for the East Denver shale project, with the spudding of the third well. Last week, the company agreed a funding deal with True Oil which sees the costs of at least six new wells being covered by Highland's partner.
A strong performance in the UK lifted tech recruitment specialist Harvey Nash PLC's (LON:HVN) revenues to record levels. Albert Ellis, chief executive, described the performance in the UK as outstanding in view of the uncertainty sparked by Brexit.
Bushveld Minerals Limited (LON:BMN) has said it is pleased with the 'strong performance' at its Vametco vanadium operation during the first quarter of 2018, as the first phase of the expansion project was completed. Big Pic in November.
SDX Energy Inc (LON:SDX) has told investors that it has begun drilling the LMS-1 exploration well on the Lalla Mimouna permit, onshore Morocco. It is the final well in the group's current campaign in Morocco, and the well is expected to take 15 to 20 days to drill.
The FTSE 100 looks set to make a subdued start to the last trading day of the week with the spread betting firms expecting it to open 11 points higher at 7,432.43.
This is set to be the fifth week in the black for Britain's blue-chip index after temporarily breaking below 7,000 last month.
The symbolic walk across the border by North Korea's Kim Jong-Un to meet Moon Jae-in, the South Korean leader, buoyed sentiment in the region with the major bourses in positive territory.
"This will be a new starting point for us, we will make a new beginning, and it is with such commitment that I have come to the meeting," he said in comments broadcast live to millions worldwide," said Kim.
Here in the UK, we'll see what sort of bite the Beast from the East and the slowdown in the construction sector took from economic growth as first-quarter GDP figures are unveiled later.
Analysts expect the UK economy to expand by a rather pedestrian 0.3% in the January-March period. Over the last two years, Q1 has tended to be the weakest three-month period.
The outlook for interest rates? Well, City commentators aren't getting too agitated.
"It also doesn't change the fact that the UK economy has grown every quarter since the first quarter of 2013, and yet in that time we've had both a rate cut and a rate hike, consequently rates have never been above where they are now since 2009," said CMC Markets' Michael Hewson.
"We are way beyond emergency level interest rates and a 25 basis point rate rise is unlikely to be material one way or the other.
"If you have any doubts ask Alex Brazier, the Bank of England's executive director on financial stability, who told politicians last week that "we should not see large swaths of the household sector getting into distress because interest rates have gone up."