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Shares rise as FTSE regains lost ground

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The FTSE 100 rose slightly on Friday as the dust settled following the Prime Minister’s resignation announcement – which had caused shares to bounce a day earlier.

Traders saw Boris Johnson’s impending exit as a sign of financial security but only after the FTSE suffered its worst performance on Tuesday since March.

The index closed at 7,196.24 on Friday, up by 0.1%, still slightly below Monday’s close.

Oil companies topped the leaderboard as traders bet on traditional energy over greener sources.

In the US, an unexpectedly strong jobs report prompted optimism from investors ahead of the weekend, with 372,000 jobs added in the US in June.

The S&P 500 index and Dow Jones were both trading up 0.2% by the time the European markets closed.

“It’s been a fairly low-key end to another choppy week for European markets after the latest US payrolls report showed that the US economy added 372,000 jobs in June,” said Michael Hewson, chief market analyst at CMC Markets.

“The decent jobs report prompted a bigger reaction from markets in the US, than here in Europe, where trading activity has been lacklustre, but still looks set to finish the week on a positive note.”

But analysts warn the labour market tightness only adds to inflationary pressures and increases the chances of rate rises this month.

Joshua Mahony, senior market analyst at online trading platform IG, said: “The latest US jobs report helped alleviate fears that the widely anticipated recession could begin to hit business investment and hiring decisions.

“Nevertheless, we have seen some weakness for US markets as better-than-expected payrolls, and stable unemployment/wages strengthen the case for a 75 basis-point hike in three-weeks’ time.

“Inflation remains the key concern for the Fed, and the absence of major red flags in the economy serves to raise the likeliness of Fed action to stifle price pressures.”

Elsewhere in Europe, the Dax index was up 1.3% and the CAC 40 closed 0.4% higher.

The pound reached 1.2033 against the dollar and fell to 1.1824 against the euro in the wake of the Prime Minister’s resignation.

In company news, JD Sports saw its shares rise 2.5% after announcing former Morrisons boss Andrew Higginson would take over from Peter Cowgill as its new chairman.

Shares in housebuilder Vistry rose 2.1% after saying its profits could exceed expectations due to a period of high demand in the first half of the year.

The biggest risers on the FTSE 100 were Ashtead, up 117p to 3,839p, St James’s Place, up 32.5p to 1,149p, CocaCola HBC, up 48p to 1,848p, JD Sports, up 3p to 125.25p, and Airtel Africa, up 3.4p to 147.8p.

The biggest fallers on the FTSE 100 were Standard Chartered, down 17.6p to 579.4p, GSK, down 36.6p to 1,754.8p, HSBC, down 9.8p to 525.8p, Taylor Wimpey, down 1.9p to 112.95p, and Hikma, down 20.0p to 1,697p.

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