(Alliance News) - Stocks in London ended higher on Friday shrugging off a dismal US jobs report, as investors place their hopes on a substantial stimulus package to help support the economy following the transition to power of the Biden administration.
The FTSE 100 index closed up 16.30 points, or 0.2%, at 6,873.26 - ending up 6.4% for the week.
The FTSE 250 ended up 54.38 points, or 0.3%, at 21,064.24 - up 2.8% for the week and the AIM All-Share closed up 5.22 points, or 0.4%, at 1,179.76 - closing the week up 1.9%.
The Cboe UK 100 ended down 0.2% at 683.41, the Cboe UK 250 ended up 0.1%, at 18,341.77, and the Cboe Small Companies ended up 0.8% at 12,183.77.
In Paris, the CAC 40 ended 0.4%, while the DAX 30 in Frankfurt ended up 0.6%.
IG Group's Chris Beauchamp said: "Equities remain on track to finish the week with strong gains, although some of the momentum of the previous two sessions is beginning to ebb away. Today's non-farm payroll report provided a brief moment of excitement in an otherwise quiet session, as the world's largest economy lost jobs for the first time since April. But when revisions to the previous months are taken into account the US is only down 5000 jobs, not even a pinprick for the mighty American economy.
"Those expecting the Federal Reserve to shift its views on the recovery based on this report are likely to be disappointed, although the pandemic does continue to have a disproportionate effect on lower-paying jobs, which explains the big rise in average earnings this time around. This, more than headline job losses, is the situation that should concern the central bank and the government, and should be a key plank of any new government stimulus programme."
The US employment figures decreased in December, disappointing market forecasts of modest jobs growth, figures from the Department of Labor showed.
According to the latest US government data, nonfarm payrolls declined by 140,000, well short of consensus calling for 71,000 rise, according to FXStreet. The December slump takes back some of the 336,000 rise in November and 654,000 increase in October.
Data showed the unemployment rate was unchanged at 6.7%, beating market forecasts of a rise to 6.8%.
"The decline in payroll employment reflects the recent increase in coronavirus cases and efforts to contain the pandemic. In December, job losses in leisure and hospitality and in private education were partially offset by gains in professional and business services retail trade, and construction," the Department of Labor said.
The grim reading raises concerns that the US's economic recovery from Covid-19 has slowed.
The US reported a daily record on Thursday with nearly 4,000 deaths, according to Johns Hopkins University. It also notched 265,246 new infections, according to the university.
Stocks in New York were adding to record highs, undeterred by weak jobs data and rising US coronavirus cases amid rising prospects for more government stimulus.
The DJIA was up 0.1%, the S&P 500 index 0.4% and the Nasdaq Composite 0.8%.
On the London Stock Exchange, Hargreaves Lansdown ended the best blue chip performer, up 5.4%, after Shore Capital upgraded the fund supermarket to Buy from Hold, saying it should benefit from a recent jump in major equity indices.
"Such was the rise in markets seen in the fourth quarter, along with the continued elevated retail share dealing that this catalysed, we materially upgrade forecasts and raise our recommendation from Hold to Buy," Shore said.
Barratt Developments closed up 4.5% after the UK's largest housebuilder described its interim performance as "excellent", noting that while its sales rate has moderated since its October update it was still notably higher than in the previous year.
The housebuilder said that for the financial first half ended December 31, its sales rate climbed 12% to 0.77 net private reservation per active outlet per week from 0.69 per week the year prior. The firm's home completions rose 9.2% annually to 9,077, and total forward sales at December 31 were 14% higher year-on-year at 13,588 homes at a value of GBP3.21 billion, which up 19% from 12 months ago.
Peers Taylor Wimpey, Berkeley Group and Persimmon ended up 2.7%, 2.4%, and 0.2% respectively, in a positive read-across.
At the other end of the large caps, gold miners Fresnillo and Polymetal International ended the worst performers, down 3.5% and 3.0% respectively, tracking spot gold prices lower.
Gold was quoted at USD1,856.00 an ounce at the London equities close, sharply lower against USD1,914.89 late Thursday, as analysts believe Bitcoin is starting to replace gold as the go-to asset for investors seeking a safe haven.
Bitcoin, the largest and oldest cryptocurrency, hit a fresh record-high at USD41,962.36, less than a month after breaking USD20,000 for the first time.
Oanda Markets analyst Edward Moya explained: "Gold prices tumbled on speculation ETF investors are about to abandon the safe-haven trade since the US political situation will see stability with President-elect Biden and as the US begins to speed up their vaccine rollout. Gold's tumble at the European open was unusual for a nonfarm payroll Friday. Someone big or a hedge fund is abandoning their bet on bullion and that could reverberate further.
"The institutional interest for Bitcoin is starting to really hurt the long-term outlook for gold. The Bitcoin bubble will pop at some point over the next few months if not sooner, but until then gold is losing the backbone of big-money interest."
In the FTSE 250, Tui ended as the worst performer, down 22% after the Anglo-German tour operator said it plans to raise nearly EUR550 million through a share issue, having been battered by travel restrictions to combat Covid-19.
Tui will raise EUR544.6 million through the issue of 509.0 million shares.
Shareholders would be offered 25 new shares for every 29 shares already owned, at a subscription price of EUR1.07, about 96 pence.
The pound was quoted at USD1.3585 at the London equities close, up from USD1.3565 at the close Thursday, as the UK approved Moderna's vaccine to help in the fight against Covid-19.
The jab is the third to be given the green light by the Medicines and Healthcare products Regulatory Agency, along with the Covid-19 vaccines from Pfizer and BioNTech and the Oxford University and AstraZeneca. The Moderna vaccine is 94% effective in preventing disease, including in the elderly.
The UK government has also agreed to purchase an additional 10 million doses of the Moderna vaccine on top of its previous order of seven million, taking the total to 17 million.
The euro stood at USD1.2250 at the European equities close, lower from USD1.2274 late Thursday. Against the yen, the dollar was trading at JPY103.86, flat from JPY103.80.
Brent oil was quoted at USD55.50 a barrel at the equities close, up sharply from USD54.51 at the close Thursday, trading at its highest levels since February.
The economic events calendar on Monday has China inflation data overnight. Financial markets in Japan will be closed on Monday for the Coming of Age day holiday.
The UK corporate calendar on Monday has trading statements from building products supplier SIG and life science research software firm Abcam.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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