London close: FTSE ends up after non-farm payrolls report
London stocks ended firmly in the black on Friday, supported by an upbeat US session, as investors digested what many were calling a "’Goldilocks" non-farm payrolls report.
The FTSE 100 closed up 1.9% at 7,281.19, following four days of losses.
Figures released earlier by the US Bureau of Labor Statistics showed than non-farm payrolls rose by 315,000 in August following a revised 526,000 jump the month before. This was ahead of expectations for a 300,000 increase.
The unemployment rate rose to 3.7% from 3.5% and average hourly earnings pushed up 0.3%, maintaining a year-on-year increase of 5.2%.
Joshua Mahony, senior market analyst at IG, said: "Another bout of Friday volatility has swept over financial markets from the US, with the latest jobs report helping to reverse some of the damage done by Jerome Powell last week.
"While many have questioned whether this raft of employment data had the ability to shift markets in the face of an inflation-focused Federal Reserve, the jump in unemployment and lower-than-expected wage growth figure did help ease market concerns. However, markets continue to price in a 75% chance of a third consecutive 75-basis point rate hike in three-week’s time.
"Unfortunately for the bulls, this rally looks unlikely to last, with wage growth elevated, payrolls looking healthy, and rising unemployment largely attributed to improvements in the participation rate. For now, the jobs market remains relatively strong, with two jobs available for every unemployed person. Unfortunately for bulls, that is unlikely to derail the Fed’s policy decisions aimed at driving down the problematic inflation rate."
In equity markets, investment firm Abrdn was the standout gainer on the top-flight index. CMC Markets analyst Michael Hewson said the stock "appears to be enjoying some buying interest ahead of what is likely to be its eviction from the FTSE 100 at the next reshuffle in what has been a disappointing year to date for the asset management sector".
Meanwhile, private equity firm Bridgepoint jumped to the top of the FTSE 250.
Asset manager Ashmore was also a high riser even it said that assets under management and earnings slipped in the 12 months ended 30 June as Russia's invasion of Ukraine and inflationary concerns led to widespread risk aversion.
Avast nudged up after the Competition and Markets Authority cleared NortonLifeLock’s $8.6bn takeover of the London-listed cybersecurity software developer.
Shell was higher following a report it has shortlisted four candidates to succeed chief executive Ben van Beurden, who is preparing to step down next year after nearly a decade at the helm of the energy firm. Reuters cited two company sources as saying that Shell's board succession committee - headed by Chairman Andrew Mackenzie - has met several times in recent months to draw up plans for van Beurden's departure and interview potential successors.
On the downside, housebuilders slumped after a raft of downgrades in the sector. HSBC cut Barratt Developments, Bellway, Persimmon, Crest Nicholson, Redrow and Taylor Wimpey to ‘hold’ from 'buy', while Berkeley Group was downgraded to ‘reduce’ from 'hold'.
Market Movers
FTSE 100 (UKX) 7,281.19 1.86%
FTSE 250 (MCX) 18,853.22 1.94%
techMARK (TASX) 4,266.07 1.29%
FTSE 100 - Risers
Abrdn (ABDN) 152.10p 7.45%
Prudential (PRU) 936.60p 6.24%
Smith & Nephew (SN.) 1,076.00p 5.71%
Fresnillo (FRES) 693.80p 5.50%
Rolls-Royce Holdings (RR.) 75.07p 5.27%
Scottish Mortgage Inv Trust (SMT) 808.40p 5.10%
SEGRO (SGRO) 939.00p 5.09%
Antofagasta (ANTO) 1,101.50p 4.90%
JD Sports Fashion (JD.) 119.60p 4.85%
Barclays (BARC) 168.64p 4.49%
FTSE 100 - Fallers
Berkeley Group Holdings (The) (BKG) 3,492.00p -2.70%
Persimmon (PSN) 1,442.00p -1.90%
Barratt Developments (BDEV) 410.10p -1.23%
Haleon (HLN) 247.15p -1.02%
GSK (GSK) 1,352.00p -0.38%
Taylor Wimpey (TW.) 104.80p -0.19%
National Grid (NG.) 1,074.00p -0.09%
Meggitt (MGGT) 798.00p -0.03%
Associated British Foods (ABF) 1,502.50p 0.17%
Imperial Brands (IMB) 1,900.00p 0.26%
FTSE 250 - Risers
Bridgepoint Group (Reg S) (BPT) 277.00p 16.88%
Ashmore Group (ASHM) 211.80p 9.06%
Carnival (CCL) 730.40p 7.10%
Aston Martin Lagonda Global Holdings (AML) 480.10p 6.88%
IP Group (IPO) 70.25p 6.12%
Hill & Smith Holdings (HILS) 1,018.00p 6.04%
Jupiter Fund Management (JUP) 96.65p 5.85%
Hochschild Mining (HOC) 61.90p 4.65%
Watches of Switzerland Group (WOSG) 770.00p 4.61%
SSP Group (SSPG) 211.10p 4.61%
FTSE 250 - Fallers
Redrow (RDW) 473.60p -3.47%
XP Power Ltd. (DI) (XPP) 1,880.00p -2.99%
Moonpig Group (MOON) 175.40p -2.61%
Coats Group (COA) 57.00p -2.06%
Auction Technology Group (ATG) 760.00p -1.30%
Hilton Food Group (HFG) 930.00p -1.27%
Crest Nicholson Holdings (CRST) 220.40p -0.99%
Volution Group (FAN) 336.00p -0.88%
Bellway (BWY) 1,965.50p -0.86%
Fidelity Emerging Markets Limited Ptg NPV (FEML) 605.80p -0.85%