Top UK stocks cruised to a higher finish on Friday, leaving the FTSE-100 index up on the week as investors cheered powerful US jobs data, snapping up mining stocks and airline British Airways.
The blue-chip FTSE-100 index ended the session up 54.9 points, or 1.2 percent, at 4,465.6 - marking a gain of 2.5 percent on the week. But market watchers said that while the creation of 308,000 US jobs in March was positive, the effects could be short-lived.
"Undoubtedly the idea of a 300,000-plus increase in payrolls is good news for equities in the short term," said Philip Shaw, economist at brokerage Investec.
"However, we would warn against a long-term rally for two reasons - the good earnings from the US have come out because of lower costs and subdued hiring, and secondly, if we see another figure like this next week it's quite possible the Fed could start to tighten in June."
The mood was also upbeat on Wall Street, where the Dow Jones industrial average rose 81 points, or 0.8 percent, by the time London closed. The tech-focused Nasdaq index was up 1.3 percent.
Mining stocks dominated the London blue-chip gainers list, even though an initial hike in commodity prices was unwound as investors reacted to the leap in US jobs growth.
"The whole market is up and commodity prices are ending the week near highs anyway. Miners and commodities are definitely still on an upward trend so it's hard to find a reason to sell," said Geoff Langham, head of trading with CMC Group.
Copper miner Antofagasta closed up 5.3 percent, BHP Billiton finished 3.7 percent better and Anglo American rose 2.8 percent.
British Airways also soared, up 4.7 percent on hopes that an improving US economy would increase traffic on its profitable trans-Atlantic routes. The carrier reports monthly traffic figures on Monday.
Other companies with exposure to the US market also rose sharply after the positive employment figures. Anglo-US fund manager Amvescap rose three percent. Software maker Sage and advertising giant WPP jumped 2.8 percent each.
Insurers were also stronger, with Prudential up four percent and Aviva 2.6 percent higher, helped by their exposure to equity markets.
Some traders said Prudential had also been helped by renewed talk of a bid for Internet-bank Egg, in which it owns a 79 percent stake. But others were quick to play down the rumour and Egg shares did not react, ending down 1.8 percent.
Mortgage bank Northern Rock was one of only a handful of blue chips to end the day lower. It fell 2.4 percent after saying profits this year would at least meet market forecasts. Dealers said the news was not enough to push the shares further, after a recent strong run.
Among mid-caps, fire-fighting equipment maker Kidde rose 4.6 percent after investment bank Credit Suisse First Boston upgraded the stock to "outperform".
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