The FTSE 100 closed lower Friday as inflation and higher interest rates came into focus on a strong US jobs report and a bounce back for major tech stocks.
The unexpected surge in jobs last month, up 467,000 versus an estimate of 150,000 rise, spiked bond yields and reaffirmed to investors that the Federal Reserve would continue with its plan to raise interest rates as soon as March.
At the close, the UK benchmark FTSE 100 has fallen 12 points, or 0.17%, to close at 7,516.40, but up 0.7% on the week. Mid-caps took a pounding with the FTSE 250 losing nearly 1.2% (255 points) to end the week at 21,712.04.
US markets opened lower but had bounced hard by the UK close, led by a big rebound for the tech heavy Nasdaq Composite, up 1.9% at 13,850. An incredible 16% jump in Amazon stock helped, which would make it the largest one-day jump for a US stock ever in Market cap terms, powered the S&P 500 to near-1% gains, although gains were more modest for the Dow Jones, up 0.13%.
On the currency markets, sterling lost ground against the dollar at $1.3538, while in commodity markets Brent crude futures continue to push higher, up more than 2.5% at $93.40 per barrel, adding to inflation concerns.
MOVING ON THE MARKETS
Travel retail group SSP (SSPG) posted a mixed trading update as the spread of the Omicron variant around the world over the holiday season and subsequent government restrictions impacted passenger numbers in many of its markets.
After running at 66% of 2019 levels from October to the start of December, revenues slowed to just 57% of 2019 levels in the eight weeks to the end of January.
On a positive note, the firm said sales were ‘trending positively’ again in the UK and some European markets, nudging the stock 0.7% higher at 266.2p.
Real estate investment firm Shaftesbury (SHB), which owns a 16-acre portfolio in the heart of London’s West End, also reported a rebound in activity heading into the festive period followed by a dip in footfall due to Omicron.
Longer term, vacancy levels are trending lower towards pre-Covid levels and rent collection continues to improve with 88% of rent for the quarter to end-December collected by early February. The shares added 1.2% to 620p.
Shares in mobile operator Airtel Africa (AAF) lost earlier modest gains to slip a little more than 1% into the red at 155p after the firm posted strong nine-month results with growth of more than 20% in revenues and more than 30% in EBITDA (earnings before interest, taxes, depreciation and amortisation).
The firm increased its customer base by just under 6% to 125.8 million users with mobile money services proving especially popular and customer numbers up almost 20% in the period to December.
It was the first day of dealings for infrastructure employment firm Hercules Site Services (HERC:AIM) after the company raised £8 million of capital at 50.5p per share last month.
Hercules has strong relationships with infrastructure firms Balfour Beatty (BBY), Costain (COST) and Kier Group (KIE). In early trading shares gained 2p to 52.5p.
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