The FTSE 100 hit its highest level in over four months on Friday, climbing to 10,701 points in early trading, up 0.4%. The blue-chip index last traded at this level on 3 March, before the Iran conflict escalated.
Top Risers and Market Drivers
Leading the gains were precious metals miner Fresnillo (+2.5%), engineering firm Weir Group (+2%), and energy company SSE (+1.8%). Several factors combined to lift the Footsie, including optimism over a potential US-Iran peace deal, which pushed oil prices lower and could drive them down further.
A weaker-than-expected US employment report released on Thursday also buoyed traders by dampening expectations of interest rate hikes. The US jobs data showed disappointment in the labour market, but not enough to trigger rate cuts.
Analyst Commentary
Dan Coatsworth, head of markets at AJ Bell, explained: “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 into Old Economy Stocks
Additionally, investors are rotating out of chip stocks, which had a stellar start to the year, and into old economy companies. The London stock market is heavily weighted towards such traditional sectors, benefiting from this shift.
