6th Jan 2023 17:09
(Alliance News) - Stocks in Europe ended higher on Friday, taking conflicted readings of the US economy in their stride, with miners leading the way in London with hopes of a China re-opening still front and centre.
The FTSE 100 index was up 66.04 points, or 0.9%, at 7,699.49. The FTSE 250 rose 41.29 points, or 0.2%, at 19,504.72, while the AIM All-Share climbed 3.72 points, 0.4%, at 847.46.
For the week, the FTSE 100 added 3.3%, the FTSE 250 rose 3.5% and the AIM All-Share added 1.9%.
The Cboe UK 100 ended up 0.8% at 770.55, the Cboe UK 250 closed flat at 16,978.41, and the Cboe Small Companies added 0.7% at 13,716.69.
In European equities on Friday, the CAC 40 in Paris shot up 1.5%, while the DAX 40 in Frankfurt added 1.2%.
At the time of the closing bell in London, US stocks were higher. The Dow Jones Industrial Average was up 1.6%, the S&P 500 up 1.7% and the Nasdaq Composite up 1.5%.
The US added more jobs than expected in December, according to the latest data from the US Department of Labor. Total non-farm payroll employment increased by 223,000 in December, the department said. This came in higher than market expectations of 200,000 jobs, as cited by FXStreet.
The unemployment rate edged down to 3.5% from 3.6% in November. It has remained in a narrow range between 3.5% and 3.7% since March.
However, wage growth came in below expectations. Hourly earnings rose 4.6% on-year, slowing from 4.8% in November, and below FXStreet cited consensus of 5%.
"This goldilocks scenario, while welcome at the end of what is set to be a negative week for US markets, still comes at a time when other indicators of inflation are still flashing red, and where private sector wages are trending much higher. Nonetheless, we still appear to be getting a modest end-of-week rebound after the latest ISM services survey unexpectedly contracted in December. This unexpected weakness may have more to do with the cold weather impact than any significant economic slowdown," CMC Markets analyst Michael Hewson commented.
The US services sector finally slipped into contraction territory at the end of December, after two-and-a-half years of growth, according to a survey by the Institute for Supply Chain Management.
The latest ISM services purchasing managers' index fell to 49.6 points in December, from 56.5 in November. Below the 50.0 no-change mark, the reading suggests the US services economy is in decline.
It was the first reading below 50 points in 30 months, ISM noted.
The dollar edged higher shortly after the US jobs data, but succumbed as the afternoon dragged on.
The pound was quoted at USD1.2051 at the time of the London equities close on Friday, up sharply from USD1.1890 on Thursday. The euro stood at USD1.0612, up against USD1.0525. Against the yen, the dollar was trading at JPY132.44, down from JPY133.89.
"The US dollar was hit by a double whammy of bearish news," City Index and FOREX.com analyst Fawad Razaqzada commented.
"The weakness in wages and soft services PMI data both point to subdued economic activity, reducing the need for the Fed to hike rates aggressively to tame inflation. However, much of this sentiment had already been priced in, so let's see how much further the sellers will punish the dollar. My feeling is that it will make a strong comeback because the economic situation outside of the US is not great either."
In London, miners ended higher.
Anglo-American surged 5.7%, Antofagasta added 2.8% and Glencore rose 2.3%.
Optimism stemming from a re-opening of the Chinese economy, after years of bruising zero-Covid curbs, has been a key theme so far in 2023. An easing of mobility restrictions in China would be a boon for miners as the nation is a big buyer of minerals.
Clarkson rose 5.1%. The shipping services provider announced strong fourth-quarter trading, particularly from its Broking division, and, as a result, said it now expected its full-year performance to be ahead of current market expectations.
Clarkson said 2022 underlying pretax profit was at least GBP98 million. This is up 41% from GBP69.4 million in 2021.
At the other end of the FTSE 250, Essentra lost 6.8%. It reported its business saw a slower period of economic growth in 2022 as a result of toughening market headwinds.
This, coupled with a strong comparative for its final quarter, saw the firm's LFL trading day adjusted sales fall by 3.0% compared with the year prior.
Elsewhere in London, Nanoco added 31%. The quantum dot developer said that it has agreed a term sheet for a no-fault settlement with Korean electronics firm Samsung.
The two firms now have 30 days to agree the terms of a binding agreement. They have jointly requested a stay to the trial that was scheduled on Friday in order to allow time for this agreement to be finalised.
The duo have been locked in a dispute with Nanoco claiming Samsung infringed on its unique synthesis and resin capabilities for quantum dots. Quantum dot technology is used on Samsung QLED televisions. QLED stands for quantum light-emitting diode.
Brent oil was quoted at USD79.64 a barrel late Friday, up from USD78.48 late Thursday. Gold was quoted at USD1,861.63 an ounce, sharply higher than USD1,828.35.
Monday's economic calendar has a eurozone unemployment reading at 1000 GMT. Over the course of the week, there is US inflation data on Thursday and gross domestic product readings from the UK and Germany on Friday.
Also of interest, the US banking earnings season kicks off on Friday, with results from JPMorgan Chase & Co, Morgan Stanley and Bank of America.
Monday's local corporate calendar has trading statements from property company Assura and vehicle tracking system provider Quartix Technologies.
By Eric Cunha, Alliance News news editor
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