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London - Investors appeared to take in their stride weaker-than-expected growth data in the United States Friday, as President Donald Trump's "America first" policies could point to stronger expansion in the coming months, dealers said.
Wall Street was flat following a disappointing report on fourth-quarter US economic growth and a mixed bag of earnings.
US growth came in at a sluggish 1.9% in the quarter ending December 31, well below the 3.5% in the third quarter and under analyst expectations.
Still, analysts noted the report is backward-looking and that the economic outlook has shifted with the expectation that Trump will pursue pro-growth policies.
"All said, we think that the economy is on track to expand by 2% to 2.25% in the first half of the year," said UniCredit analyst Harm Bandholz.
"Under the assumption that the new administration will pass a fiscal stimulus in time without derailing global trade, growth in the second half of the year will most likely be faster."
London Capital Group analyst Jasper Lawler said that overall it had been "a week of celebration in the market since the Dow Jones finally cracked 20 000 for the first time."
And despite trending fractionally lower on Friday, "the Dow should comfortably finish the week above 20 000," he added.
European markets saw an underwhelming end to the week, but London was buoyed by a blockbuster takeover by Tesco.
British supermarket group Tesco agreed to buy wholesaler Booker for $4.6bn in a move to become the nation's top food business, slash costs and boost growth.
Across Asia, most bourses rose again, with Tokyo boosted by a plunging yen, although traders remain nervous about the outlook for global trade with Trump in the White House.
After one of the best weeks in January, gains were tempered with investors taking a breather as they keep an eye on developments in Washington.
Markets surged in the two months after Trump's November election win on hopes his plans for big infrastructure spending, tax cuts and slashing red tape would fan the world's biggest economy and, in turn, global growth.
The new year saw a retreat as his failure to provide any detail of his economic plans led to worries about his determination to follow through with his campaign promises.
But his decision to give the go-ahead to controversial oil pipelines across the US lifted spirits on trading floors earlier in the week as it was taken as a sign the tycoon would deliver.
On Wednesday, the Dow breached the crucial level of 20,000 points for the first time and on Thursday extended those gains. The S&P 500 and Nasdaq are also sitting around record highs.
Asian markets have followed suit, rallying for most of this week.
On Friday, Tokyo rose 0.3% as the dollar held Thursday's rise against the yen. Sydney ended 0.8% higher, Singapore gained 0.4% and Hong Kong ended down 0.1% after a four-day rally.
Activity was thin heading into the Lunar New Year break, while Shanghai and Seoul were already closed.
