Yahoo Finance FTSE 100 closes higher as Wall Street jumps after jobs report tops expectations
A look at how the major markets are performing on Friday
The FTSE 100 and European stocks finished higher on Friday amid the passage of the US debt ceiling bill and an unexpectedly strong report on the US job market which helped ease worries on Wall Street about a possible recession.
The FTSE 100 (^FTSE) rose 1.53% to close at 7,605 points during afternoon trading, while the CAC 40 (^FCHI) in Paris gained 1.87% to 7,270 points. In Germany, the DAX (^GDAXI) rose 1.21% to 16,047.
FTSE
London stocks rose after the US Senate passed a bi-partisan agreement to raise the debt ceiling, and as investors eyed the latest non-farm payrolls report.
Miners were the top performers as copper prices rose, with Antofagasta (ANTO.L), Anglo American (AAL.L), Glencore (GLEN.L) and Rio Tinto (RIO.L) all up.
NatWest (NWG.L) rose 0.57% after it confirmed it had reduced its stake in Ireland’s Permanent TSB (PTSB.L).
Diageo (DGE.L) struggled for direction as Deutsche Bank reiterated its sell rating. "We believe consensus estimates remain too optimistic for Diageo and we note US alcohol inventories are currently at a 30 year high vs shipments," the bank said.
Shares of Dechra Pharmaceuticals (DPH.L) rose over 8% and hit a two-week high after the vet drugmaker agreed to be taken private.
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The mid-cap FTSE 250 (^FTMC) company said it had agreed a £4.5bn ($5.6bn) bid from Swedish private equity firm EQT. The offer, worth 3,875p, is below the terms of an indicative proposal from EQT of 4,070p per share made in April.
The Cheshire-based company listed on the London Stock Exchange in 2000 with a market value of £60m.
US and Asia
US stocks were higher on Friday after a strong May jobs report and news late on Thursday that the Senate passed the debt ceiling bill, clearing investor fears over both a US debt default and worries about a marked slowdown in the economy.
The Dow Jones (^DJI) rose 1.67% to 33,613 points. The S&P 500 (^GSPC) gained 1.35% to 4,278 points and the tech-heavy NASDAQ (^IXIC) advanced 1.03% to 13,235.
The US economy added 339,000 nonfarm payroll jobs last month while the unemployment rate rose to 3.7%, data from the Bureau of Labor Statistics showed Friday. This marks the 14th-straight month that job creation came in above Wall Street economists' expectations.
Economists had expected the report to show payrolls rose by 195,000 while the unemployment rate was expected to tick up to 3.5%.
Meanwhile, debt ceiling fears are diminishing among investors as the Senate voted to approve a bill that will raise the US debt ceiling for two more years.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: "The deal clears the path to more normal business to resume, but the reason there hasn’t been more of a substantial bounce is because markets were very much betting that officials would indeed sort out the issue before default occurred."
Richard Hunter, head of markets at Interactive Investor, said: "Investor optimism ahead of the Senate vote proved to be well-founded as the debt ceiling issue was resolved, with just days to go, after the closing bell.
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"While the issue was expected ultimately to reach a satisfactory conclusion, there was nonetheless relief as the legislation avoids what would have been a disastrous US default. Attention will now revert to the other pressing issues of the day, most notably the next move on interest rates from the Federal Reserve."
In Asia, markets were mostly higher on Thursday led by gains in Hong Kong-listed technology companies after the bill to raise the US debt ceiling was passed.
Tokyo’s Nikkei 225 (^N225) gained 1.21% to 31,524 points, while the Hang Seng (^HSI) in Hong Kong jumped 4.09% to 18,961. The Shanghai Composite (000001.SS) climbed 0.79% to 3,230 points.
Pound
The pound (GBPUSD=X) rose against the dollar, with sterling trading at $1.2533. So far this week, sterling has gained 1.5% against the dollar, or almost two cents.
Fawad Razaqzada, market analyst at City Index and FOREX.com, said: "Risk sentiment has improved markedly with the passage of the US debt ceiling deal through Congress. This kept European currencies supported on Friday morning."
Sterling (GBPEUR=X) was flat against the euro, trading at €1.1634.
Oil markets
Meanwhile, Brent crude (BZ=F) rose and was trading at around $75 per barrel as the debt ceiling deal averted a default in the world’s biggest oil consumer. Now investors are turning their attention to a meeting of OPEC ministers and their allies at the weekend.
Edward Moya, senior market analyst at OANDA said: "Oil prices are stabilizing after a round of disappointing global manufacturing data supported the case for OPEC+ to deliver another production cut."
Watch: Senate approves debt ceiling deal, sending it to Biden
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