London close: FTSE 100 hits two-month high on weak US jobs data

(Sharecast News) - UK stocks posted strong gains before the close on Thursday, pushing the FTSE 100 to a two-month high as strong US economic data eased concerns about a rate hike by the Federal Reserve.

The FTSE 100 closed 1.7% higher at 10,652.87, its highest close since 17 April.

Data from the Bureau of Labor Statistics revealed that the US economy added just 57,000 jobs in June, well below the downwardly revised 129,000 recorded in May and short of forecasts for 110,000, marking the weakest gain in four months.

"We're in a 'bad news is good news' situation as weaker-than-expected US jobs data spurred a stock market rally. Markets have interpreted the employment figures as making it less likely the Fed will raise interest rates," said Dan Coatsworth, head of markets at AJ Bell.

"Central banks look at inflation and jobs data when deciding what to do with rates. The Fed has been watching inflation closely given the Middle East conflict-induced oil price hike, as a higher cost of living might need taming through higher interest rates. However, oil prices have come back down in recent weeks, raising investors' hopes that interest rates wouldn't have to go up after all. The latest jobs data now feeds into that equation."

Also helping sentiment was another drop in the price of oil, with Brent crude down 0.9% at $70.91 a barrel, after a spokesperson for Qatar's Foreign Ministry said "positive progress" was made on issues related to the memorandum of understanding between the US and Iran. This followed a separate meeting of Qatari and Pakistani mediators with the US and Iranian delegations in Doha.

Defence firms shoot higher

Defence firms BAE Systems, Babcock International, Qinetiq and Melrose all rallied. Earlier in the week, the British government announced plans to ramp up investment in drones and strengthen the country's nuclear deterrent as part of a �15bn hike in defence spending.

Housebuilders were in the red, with Barratt Redrow and Persimmon both weaker, while F&C Investment Trust fell as it traded without entitlement to the dividend.

Baltic Classifieds shares fell after the online classifieds operator reported full-year revenue growth but guided to a lower margin and higher leverage as it continues an accelerated buyback programme.

Supermarket Income REIT announced the completion on Thursday of a �445m refinancing delivering lower borrowing costs and increasing average debt maturity.

Shares of PPHE Hotel Group slid as it confirmed the strategic review had ended and it is not in receipt of any takeover approaches.

Market Movers

FTSE 100 (UKX) 10,652.87 1.67%

FTSE 250 (MCX) 23,417.58 0.38%

techMARK (TASX) 6,035.76 2.16%

FTSE 100 - Risers

Babcock International Group (BAB) 1,056.50p 5.78%

London Stock Exchange Group (LSEG) 8,608.00p 5.46%

BAE Systems (BA.) 1,982.50p 5.45%

AstraZeneca (AZN) 14,538.00p 4.94%

Melrose Industries (MRO) 498.70p 4.42%

Airtel Africa (AAF) 337.40p 4.26%

St James's Place (STJ) 1,276.50p 3.95%

GSK (GSK) 2,004.00p 3.83%

Coca-Cola HBC AG (CDI) (CCH) 5,140.00p 3.75%

Diageo (DGE) 1,537.50p 3.64%

FTSE 100 - Fallers

Flutter Entertainment (DI) (FLTR) 7,798.00p -2.67%

Computacenter (CCC) 4,328.00p -2.14%

Entain (ENT) 540.00p -1.81%

JD Sports Fashion (JD.) 83.10p -1.33%

F&C Investment Trust (FCIT) 344.00p -1.32%

IMI (IMI) 2,916.00p -1.16%

Pershing Square Holdings Ltd NPV (PSH) 3,780.00p -1.00%

Prudential (PRU) 1,027.00p -0.96%

Metlen Energy & Metals (MTLN) 41.86p -0.81%

The Sage Group (SGE) 839.00p -0.61%

FTSE 250 - Risers

QinetiQ Group (QQ.) 478.00p 8.10%

CMC Markets (CMCX) 700.00p 7.69%

The Schiehallion Fund Limited NPV (MNTN) 2.18p 6.86%

Chemring Group (CHG) 572.00p 6.02%

Harworth Group (HWG) 127.40p 4.77%

Ithaca Energy (ITH) 217.80p 4.46%

Endeavour Mining (EDV) 3,996.00p 4.12%

CVS Group (CVSG) 1,235.00p 3.78%

Oxford Biomedica (OXB) 644.00p 3.37%

Genus (GNS) 2,312.00p 3.12%

FTSE 250 - Fallers

Oxford Nanopore Technologies (ONT) 123.70p -5.93%

Baltic Classifieds Group (BCG) 188.90p -5.83%

Allianz Technology Trust (ATT) 720.00p -4.64%

PPHE Hotel Group Ltd (PPH) 1,638.00p -4.21%

Pacific Horizon Inv Trust (PHI) 1,128.00p -3.75%

Polar Capital Technology Trust (PCT) 679.00p -3.41%

Renishaw (RSW) 4,908.00p -3.00%

Workspace Group (WKP) 335.00p -2.90%

Templeton Emerging Markets Inv Trust (TEM) 320.50p -2.88%

Discoverie Group (DSCV) 676.00p -2.87%