London close: Stocks finish higher after US non-farm payrolls
London stocks closed higher on Thursday, on hopes of a potential coronavirus vaccine, and as investors digested a better-than-expected non-farm payrolls report out of the United States.
The FTSE 100 ended the session up 1.34% at 6,240.36, and the FTSE 250 was 1.04% firmer at 17,367.86.
Sterling was mixed against its major trading pairs, last falling 0.11% against the dollar to $1.2461, while it gained 0.14% on the euro to €1.1102.
“The strong US jobs report lifted the already bullish mood,” said CMC Markets analyst David Madden.
“Stocks were pushing higher this morning on the back of the news that Pfizer and BioNTech saw positive results from their drug trial that they are hoping will be a vaccine for Covid-19.
“The news encouraged traders to buy into the market, but the results have yet to be reviewed by a medical journal.”
According to the Department of Labor, non-farm payrolls in the US jumped by 4.8m in June, beating expectations for 3.0m.
Underscoring the speed of the improvement, the index of aggregate weekly hours - which is the closest thing akin to a monthly reading for gross domestic product - jumped at a month-on-month pace of 3.6%, after May's rise of 4.5% and April's collapse of -15.2%.
At the same time, the rate of unemployment, which is derived from a separate survey than the one for payrolls, eased from 13.3% during the preceding month to 11.1%, against consensus forecasts for 12.5%.
Commenting on the news out of Washington, Ian Shepherdson of Pantheon Macroeconomics emphasised how the world looked like a very different place than on 13 June, the end of the survey week for the June employment report.
The number of staff working from home was falling again, and weekly jobless appeared about to turn higher after controls were reimposed on bars and restaurants in some states in the south and California.
People simply opting to stay in more often to avoid the surge in the pandemic was another factor, he believed.
"No doubt the administration will be crowing about today’s numbers, but they’d better make the most of them; the July and August numbers won’t be as good; at this point, we can’t rule out a decline in payrolls," he said.
In equity markets, airlines put in a strong performance, with British Airways and Iberia parent IAG rising 5.7% and easyJet 2.18% higher, amid expectations the government will announce later in the day that 75 countries will be exempt from UK quarantine rules.
Associated British Foods was 4.15% firmer after a trading update.
The company estimated full-year adjusted operating profit for Primark will decline from £913m to between £300m and £350m due to the impact of the coronavirus pandemic, but it said trading at its reopened stores has been "encouraging".
In addition, the group’s grocery business saw turnover rise by 9% in the third quarter.
Aerospace and defence engineer Meggitt pushed up 6.19% even as it said it expects civil revenue in the second quarter to decline by 50% on an organic basis.
On the downside, packaging company DS Smith slumped 6.9% after it reported a 5% increase in full-year profit as strong e-commerce demand offset weaker demand from industrial customers, but a dip in revenue amid weak paper pricing in Europe and North America.
Market Movers
FTSE 100 (UKX)6,240.361.34%
FTSE 250 (MCX)17,367.861.04%
techMARK (TASX)3,758.170.99%
FTSE 100 - Risers
International Consolidated Airlines Group SA (CDI) (IAG)231.70p5.70%
Royal Bank of Scotland Group (RBS)125.00p4.65%
HSBC Holdings (HSBA)389.10p4.51%
Whitbread (WTB)2,336.00p4.26%
Associated British Foods (ABF)2,046.00p4.15%
GVC Holdings (GVC)778.80p4.06%
Barclays (BARC)117.90p3.84%
Lloyds Banking Group (LLOY)31.85p3.75%
Next (NXT)5,026.00p3.54%
JD Sports Fashion (JD.)652.20p3.49%
FTSE 100 - Fallers
Smith (DS) (SMDS)296.70p-6.90%
National Grid (NG.)939.20p-5.23%
Smurfit Kappa Group (SKG)2,552.00p-4.14%
Coca-Cola HBC AG (CDI) (CCH)1,990.00p-1.95%
Sainsbury (J) (SBRY)200.40p-1.38%
Smiths Group (SMIN)1,387.00p-1.03%
Mondi (MNDI)1,484.50p-0.84%
Tesco (TSCO)221.80p-0.67%
Sage Group (SGE)665.20p-0.66%
Homeserve (HSV)1,282.00p-0.62%
FTSE 250 - Risers
Meggitt (MGGT)324.00p6.19%
Virgin Money UK (VMUK)98.76p6.17%
Ferrexpo (FXPO)174.10p5.84%
Mediclinic International (MDC)280.20p5.26%
Cineworld Group (CINE)64.58p4.91%
Euromoney Institutional Investor (ERM)840.00p4.90%
Future (FUTR)1,258.00p4.65%
IWG (IWG)271.00p4.23%
G4S (GFS)119.20p4.15%
Wetherspoon (J.D.) (JDW)1,065.00p4.13%
FTSE 250 - Fallers
Workspace Group (WKP)650.00p-3.70%
Ibstock (IBST)178.40p-2.99%
LXI Reit (LXI)113.60p-2.57%
Liontrust Asset Management (LIO)1,380.00p-2.47%
Vistry Group (VTY)697.50p-2.45%
PayPoint (PAY)609.00p-2.42%
ICG Enterprise Trust (ICGT)732.00p-2.40%
AO World (AO.)142.00p-2.34%
Savills (SVS)788.50p-2.16%
Equiniti Group (EQN)149.00p-1.97%