4th Oct 2019 17:06
(Alliance News) - Stocks in London ended in the green on Friday as jobs data from the US assuaged investor fears of a slowdown in the world's largest economy.
The FTSE 100 index closed up 77.74 points, or 1.1% at 7,155.38, ending the week down 3.7%.
The FTSE 250 ended up 132.21 points, or 0.7% at 19,480.37, ending the week down 1.1%, and the AIM All-Share closed up 5.02 points, or 0.6% at 863.30, ending the week down 1.1%.
The Cboe UK 100 ended up 1.0% at 12,128.20, the Cboe UK 250 closed up 0.5% at 17,377.84, and the Cboe Small Companies ended up 0.5% at 10,845.89.
In Paris the CAC 40 ended 0.9% higher, while the DAX 30 in Frankfurt ended up 0.7%.
CMC Markets analyst David Madden said: "Stock markets in Europe are higher at the close on the back of the broadly positive US nonfarm payrolls report. This week fears grew for the state of the global economy as disappointing services and manufacturing data from Europe plus the US spooked traders, which prompted heavy losses on global stock markets.
"Today's largely upbeat US jobs report was a welcome change, which encouraged bargain hunting. Some of the fear that dominated the markets has evaporated as the wheels are not coming of the US economy. Recently we have heard that Chinese companies have been buying up US agricultural goods, so that should help with the US-China trade talks that are due to take place next week."
Stocks in New York were higher at the London equities close. The DJIA, the S&P 500 index and the Nasdaq Composite were all up 0.7%.
The hotly anticipated US jobs report came amid a raft of worrying economic data over the past few days showing President Donald Trump's trade wars have put a dent in the business environment and suggesting hiring should slow in the coming months.
The US economy added 136,000 in September, down from August's reading of 168,000. August's reading had been upwardly revised from the 130,000 initially reported.
Market consensus was for 145,000 jobs to be added in September.
"The bulls have sought to wrest control away from the bears who have dominated for most of the week. Yesterday's post-ISM rebound has continued in the wake of a non-farm payrolls report that echoes the 'Goldilocks' reports of years past - weak job growth but not too weak, and slightly slower wage growth, but not too slow," said IG Group's Chris Beauchamp.
More positively, the jobless rate dropped to 3.5% in September from 3.7% in August, marking the lowest jobless rate since December 1969, when it also came in at 3.5%.
Meanwhile, average hourly earnings climbed 2.9% from September 2018, a slowdown from previous months but still higher than inflation.
"There is nothing here to suggest the Fed needs to cut interest rates again at this month's FOMC meeting rather than waiting until December. But the Fed has shown itself to be unwilling to fight the markets (or the President) this year, so we'll take our lead from Chair Jerome Powell's comments over the next week," said analysts at Capital Economics.
Ahead, Fed Chair Jerome Powell is set to give opening remarks at the "Fed Listens: Perspectives on Maximum Employment and Price Stability" event in Washington, DC at 1900 BST on Friday.
In the FTSE 100, London Stock Exchange Group closed up 3.0% after Reuters reported on Thursday that some shareholders in the stock exchange operator want Hong Kong Exchanges & Clearing to up its bid in order to persuade them to engage.
The three investors, who own a combined 3% of LSEG, said HKEX has been lobbying them to back the proposed GBP29.6 billion cash and share offer for LSEG.
HKEX in September offered 2,045 pence in cash and 2.495 new HKEX shares for each LSEG share, valuing LSEG at 8,361p per share. A banking source "close to the deal" said that 9,000p to 10,000p was "what most investors asked for", according to Reuters.
BP was up 2.1% despite the oil major announcing the departure of Chief Executive Bob Dudley.
BP said Dudley will step down in February 2020 and will be replaced by the head of the company's Upstream unit. Dudley, who was chief executive for nine years and spent 40 years at the company, will be replaced by Upstream CEO Bernard Looney.
Dudley will step down as CEO following the release of BP's financial 2019 full year results on February 4, then will retire on March 31, 2020.
Dudley is the latest senior executive of a major London-listed company to step down this week. His departure follows Imperial Brands's Alison Cooper, Tesco's Dave Lewis, Metro Bank's Vernon Hill, Centamin's Andrew Pardey and Standard Life Aberdeen's Martin Gilbert.
In the FTSE 250, Marks & Spencer closed down 3.9% after HSBC downgraded the food, clothing and homewares retailer to Reduce from Hold.
The pound was quoted at USD1.2302 at the London equities close, down from USD1.2410 at the close Thursday.
On the political front, UK Prime Minister Boris Johnson will ask for a Brexit delay if he fails to get a deal with Brussels despite his "do or die" promise to get the UK out of the EU on October 31, documents disclosed in court have revealed.
Documents submitted to the Court of Session on behalf of Johnson were read out on Friday, in which he makes it clear he will not attempt to frustrate the so-called 'Benn Act'.
The legislation, passed by Westminster last month, requires the PM to ask the EU for a Brexit extension to January 31, if Parliament does not agree to any withdrawal deal Number 10 may come back with by October 19.
"Sterling was heading for its first weekly gain since the middle of last month. Then it emerged that Prime Minister Boris Johnson, who dubbed the law that prevents a no-deal Brexit 'the surrender bill', had pledged to send a letter to the EU seeking a Brexit extension, if no agreement has been reached by 19th October", commented City Index analyst Ken Odeluga..
It's superficially good news for a softer Brexit. But on the basis that a further delay also extends damaging economic uncertainty - it's not the best news at all," Odeluga added.
The euro stood at USD1.0973 at the European equities close, against USD1.0985 late Thursday.
On the economic front, construction activity in the eurozone perked up in September, according to data released by IHS Markit.
The eurozone construction purchasing managers' index rose to 50.5 in September from 49.1 in August, signalling the sector returned to expansion. Any reading above 50 indicates growth in a sector, while one below signals contraction.
Brent oil was quoted at USD58.40 a barrel at the London equities close, up from USD56.82 late Thursday.
"Oil, like stocks has pushed higher today as US jobs data helped move the tone along from a cautious one, to a more upbeat one. It was been a dreadful few weeks for oil as the return of the Saudi oil production to pre-attack levels, combined concerns about demand levels in light of disappointing manufacturing data. Bargain hunters have entered the fold an account of the US jobs data, but the wider demand woes won’t disappear easily," Madden said.
Gold was quoted at USD1,504.05 an ounce at the London equities close, lower than USD1,514.80 at the close Thursday.
The economic events calendar on Monday has Germany factory orders at 0700 BST and UK Halifax house prices at 0830 BST. Financial markets in China remain closed on Monday for 'Golden Week'.
The UK corporate calendar on Monday has trading statements from optical components firm Gooch & Housego and podcast platform operator Audioboom Group.
By Arvind Bhunjun; [email protected]
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