The FTSE 100 hit its highest level since early March on Friday morning, climbing as high as 10,701 points, up 0.4%, its strongest showing since the first week of the Iran war. The blue-chip index was lifted by a combination of factors including hopes of a US-Iran peace deal, weaker-than-expected US employment data, and a rotation out of technology stocks into old economy companies.
Top risers and market movers
Precious metals miner Fresnillo led the gains, rising 2.5%, followed by engineering firm Weir Group up 2%, and energy company SSE adding 1.8%. The broader market advance was supported by a decline in oil prices amid optimism over a potential US-Iran peace agreement, which could further reduce energy costs.
US jobs data boosts rate cut hopes
A weaker-than-expected US employment report released Thursday also cheered traders by dampening expectations of interest rate rises. Dan Coatsworth, head of markets at AJ Bell, said: “Weak jobs numbers would normally be a key reason for central banks to consider cutting rates to stimulate the economy. The latest US jobs data confirms labour market disappointment but we’re nowhere near the stage where the Fed will reach for the monetary policy scissors to start cutting. We’re more likely to see an adjustment to the Fed’s assessment that implies no change to rates, which is still a win for markets.”
Rotation out of tech stocks
Investors are rotating out of chip stocks after a stellar start to the year and into old economy companies, many of which are listed on the London stock market. This shift has provided additional support to the FTSE 100, which is heavily weighted towards traditional sectors such as mining, energy, and finance.
