London’s FTSE 100 edged lower and its European peers closed off session highs as robust US jobs data may have all but killed any lingering hope that the Federal Reserve will cut interest rates next month.
The FTSE 100 index closed down 6.62 points, down 0.1%, at 7,615.54. It went into the jobs data on the up, before stock market sentiment soured in the wake.
The FTSE 250 ended up 41.48 points, 0.2%, at 19,172.64 and the AIM All-Share closed up 1.47 points, 0.2%, at 754.17.
For the week, the FTSE 100 lost 0.3%, the FTSE 250 shed 0.9%, though the AIM All-Share shot up 0.5%.
The Cboe UK 100 ended marginally up at 761.97, the Cboe UK 250 closed up 0.2% at 16,620.30, and the Cboe Small Companies ended down 0.1% at 14,648.73.
The US economy added markedly more jobs than expected at the start of the year. According to Bureau of Labor Statistics, nonfarm payroll employment rose by 353,000 in January, picking up speed from 333,000 in December.
The latest figure defied the consensus forecast. Hiring was predicted to slow to 180,000 jobs, according to consensus cited by FXStreet.
December’s figure was upwardly revised from 216,000 and November’s to 182,000 from 173,000. It means that in the final two months of last year, payroll employment was 126,000 higher than initially reported.
The US jobless rate was unmoved at 3.7% in January.
Analysis from Brown Brothers Harriman said: ‘We see upside risks. Given the recent history of revisions, there is a good chance the previous two months increases will be revised down. However, that would not take away from the underlying message that the labour market remains robust.’
The dollar spiked in the wake of the jobs report. The euro bought $1.0793 on Friday at the London equities close, down from $1.0884 shortly before the data was released at 1330 GMT, and also falling from $1.0821 this time on Thursday.
The data follows the latest Fed decision. At the conclusion of its two-day meeting on Wednesday, the Federal Open Market Committee unanimously voted not to raise the fed funds rate, for the fourth meeting in a row. The key rate is targeted at a range between 5.25%-5.50%.
The pound was quoted at $1.2639 on Friday in London, lower compared to $1.2708 at the equities close on Thursday. Against the yen, the dollar was trading at JP¥148.35, higher compared to JP¥146.13.
Oil prices eased, on progress to peace talks between Israel and Hamas.
Brent oil was quoted at $77.09 a barrel at the London equities close in London on Friday, sliding from $81.21 late Thursday.
Hamas has given ‘initial positive confirmation’ to a proposal for the cessation of fighting in Gaza and the release of hostages, Qatar’s foreign ministry spokesperson said.
US, Egyptian and Qatari mediators met with Israeli intelligence officials in Paris on Sunday, where they proposed a six-week pause in the Gaza war and a hostage-prisoner exchange for Hamas to review.
‘That proposal has been approved by the Israeli side and now we have an initial positive confirmation from the Hamas’ side,’ Majed al-Ansari told an audience at a Washington-based graduate school.
In the FTSE 100, BP and Shell dropped on the back of lower oil prices. They were down 1.6% and 1.4%.
BP also named Kate Thomson as its permanent chief financial officer, after being in the interim role since September.
Thomson has been interim CFO of the oil major since September 2023. Before picking up the role, Thomson was BP’s senior vice president of finance for the Production & Operations arm and has been with the company since 2004.
Thomson’s appointment as interim CFO came after finance chief Murray Auchincloss was named interim chief executive. Ex-CEO Bernard Looney had resigned from the top job, following allegations.
Among New York-listed oil majors, Chevron and Exxon moved in opposite directions after reporting earnings. Chevron rose 3.0%, though Exxon fell 0.9%.
Chevron reported consensus-topping fourth-quarter profit but a revenue miss.
Revenue fell 16% to $47.18 billion from $56.47 billion a year earlier. The latest figure was shy of the CNN cited consensus of $49.7 billion. Net income fell 65% to $2.24 billion from $6.38 billion a year prior.
Adjusted earnings per share were 16% lower year-on-year at $3.45 from $4.09. The figure topped the CNN cited consensus of $3.21, however.
Exxon Mobil said fourth quarter, net income fell 39% to $8.01 billion from $13.06 billion a year prior. Revenue decreased 12% to $84.34 billion from $95.43 billion, while diluted earnings per share fell to $1.91 from $3.09.
Stocks in New York were higher at the London equities close, with the DJIA up 0.1%, the S&P 500 index climbing 0.8%, and the Nasdaq Composite surging 1.4%.
Back in London, budget airlines were higher on the back of an easing of geopolitical worries. Wizz Air soared 8.8% and easyJet added 2.9%. Ryanair rose 1.3% in Dublin.
Dublin-based Ryanair said that it carried 12.2 million passengers in January 2024, up 3.4% from 11.8 million in the corresponding month last year. Its load factor fell by two points to 89% from 92% the year before, however.
Ryanair added that the short-term reduction to its load factor followed the removal of most of its flights from online travel agency pirate websites in early December.
Meanwhile, Budapest-based Wizz Air said it carried 4.7 million passengers in January, up 14% from 4.1 million a year ago. Capacity for the month was 20% higher at 5.8 million seats, compared to 4.8 million seats in January 2023.
The Hungarian airline also said it will restart operations into Tel Aviv, with routes from Budapest, Sofia, Bucharest, Krakow, London and Rome from the beginning of March. Back in November, Wizz Air suspended operations in Israel.
Among London’s small-caps, Superdry’s stock more than doubled, as M&A speculation heats up, breathing life into the retailer’s share price after a year of profit warnings.
Norwegian-based investment fund First Seagull bought a 5.3% stake in Superdry, according to a regulatory filing on Wednesday.
On Friday, the Times reported that First Seagull considers Superdry ‘to be ripe for a bid’.
The newspaper added that Sycamore Partners, an American private equity company, and Authentic Brands Group, which owns Ted Baker and Forever 21, are said to have Superdry on their radars.
‘It’s just a matter of time before there’s an offer,’ a source said to the Times.
Superdry Chief Executive Julian Dunkerton confirmed that he is in discussions with potential financing partners. This could include a possible cash offer for the entire issued and to be issued share capital of the company, not already owned by him.
‘These discussions are at a preliminary stage and no decisions have been made,’ Superdry said.#
Superdry shares surged to 46.15 pence on Friday, from 21.15p on Thursday.
On AIM, MC Mining rose 7.9%, after Goldway Capital Investments said it made a takeover offer for the coal miner worth A$65.3 million, or £33.8 million.
MC Mining later advised its shareholders to take no action on the offer, saying it will respond with a target statement that will include an independent expert report and the independent board committee’s recommendation regarding the offer.
In European equities on Friday, the CAC 40 in Paris ended up 0.1%, while the DAX 40 in Frankfurt ended up 0.3%.
Gold was quoted at $2,034.63 an ounce at the London equities close on Friday, down against $2,061.02 on Thursday.
In Monday’s UK corporate calendar, telecommunications operator Vodafone puts out a trading statement.
Next week’s economic diary has a slew of services purchasing managers’ index readings on Monday, a Reserve Bank of Australia interest rate decision on Tuesday, and Chinese inflation data on Thursday.
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