The FTSE 100 index experienced a notable uplift on Wednesday, closing higher as robust US employment figures exceeded forecasts, injecting optimism into London's financial markets. The benchmark index advanced by 118.27 points, or 1.1%, settling at 10,472.11. This positive movement was primarily driven by stronger-than-anticipated labour market data from the United States, which overshadowed mixed performances across other global indices.
US Labour Market Surge Boosts Investor Confidence
According to the Bureau of Labour Statistics, non-farm payroll employment in the US increased by 130,000 jobs in January, significantly surpassing the consensus estimate of 70,000 cited by FXStreet. This report, initially delayed due to a brief government shutdown, also revised December's figure downward to 50,000 from 48,000. The substantial job growth has alleviated some economic concerns, prompting a rally in UK blue-chip stocks.
Mixed Fortunes Across London and Global Markets
While the FTSE 100 enjoyed gains, the FTSE 250 index declined by 52.76 points, or 0.2%, to 23,416.54, and the AIM all-share index dropped slightly by 0.47 points, or 0.1%, to 815.29. In New York, stock markets presented a varied picture: the Dow Jones Industrial Average fell by 0.1%, the S&P 500 index rose by 0.2%, and the Nasdaq Composite decreased by 0.1%. Treasury yields also widened, with the US 10-year Treasury quoted at 4.17% and the 30-year at 4.81%.
European Equities and Corporate Developments
European markets faced headwinds, with the Cac 40 in Paris closing down 0.2% and the Dax 40 in Frankfurt ending 0.4% lower. This decline was influenced by specific corporate events, including BMW's recall of hundreds of thousands of vehicles worldwide due to a technical fault and Deutsche Lufthansa's flight cancellations ahead of planned strikes. BMW shares edged up 0.2%, while Lufthansa fell 4.0%.
Global Trade Reforms and Commodity Movements
In broader global news, World Trade Organisation director-general Ngozi Okonjo-Iweala emphasised the need for reform, stating that multilateral organisations must adapt to remain relevant. She highlighted that the WTO, hampered by consensus rules, is at an inflection point, with reforms set to be a key focus at an upcoming ministerial meeting in Cameroon.
Commodity markets saw fluctuations: gold prices increased to $5,055.15 per ounce, while Brent oil dipped to $69.82 per barrel. Currency movements included the pound quoted at $1.3640 and the euro at $1.1861 at the London close.
Notable Stock Performances and Corporate Updates
BP emerged as a significant gainer on the FTSE 100, rising 3.9% after securing new Libyan oil exploration and production licences for the first time in 17 years. Libya aims to boost daily oil production by 850,000 barrels over the next 25 years, attracting major energy firms like Eni and Chevron, which also saw share price increases.
On the FTSE 250, Renishaw climbed 5.0% following a positive financial report, with revenue up 7.1% to £365.6 million for the six months to December 31. However, statutory pretax profit declined by 20% to £46.0 million, though the interim dividend was maintained.
Top Movers and Economic Outlook
The biggest risers on the FTSE 100 included Antofagasta, Persimmon, London Stock Exchange, BP, and AstraZeneca. Conversely, the largest fallers were St James's Place, Relx, Entain, Sage Group, and Babcock. Looking ahead, Thursday's economic calendar features UK GDP, trade balance, and industrial production data, alongside US initial jobless claims and existing home sales. Corporate releases are scheduled from Unilever, Relx, Schroders, and British American Tobacco.
