LONDON (ShareCast) - (Sharecast News) - London markets ended the trading session on a mixed note on Friday, as investors digested a faster-than-expected rise in non-farm payrolls in the US.
The FTSE 100 index closed down 0.43% at 7,659.74 points, while the FTSE 250 edged up 0.09%, reaching 19,601.78 points.

In currency markets, sterling was last up 0.34% on the dollar to trade at $1.2853, while it increased 0.39% against the euro, changing hands at €1.1745.

"The pound hit its highest level against the dollar since August this afternoon, as weakness in the greenback drove GBP-USD higher," said IG chief market analyst Chris Beauchamp.

"While US payrolls were stronger than expected once more, a big downward revision to last month's blockbuster number and a two percentage point rise in the unemployment rate meant that investors continued to focus on the prospect of US rate cuts this year."

Beauchamp noted that US stocks were again rallying, while the FTSE 100 and other European markets were left behind.

"Today's jobs figure is perhaps one of those hoped-for 'Goldilocks' moments - just enough signs of weakness to spur hope of rate cuts, but also a solid headline jobs number to underline the overall strength of the US economy.

"Compared to the anaemic growth outlooks for the UK and the eurozone, it is not surprising to see US stocks in favour once more."

Non-farm payrolls rise faster than expected, but wage growth languishes

In economic news, investors were faced with a robust increase in non-farm payrolls, in the US, although concerns arose over a notable slowdown in wage growth and downward revisions to previous months' data.

The Department of Labor reported a substantial jump of 275,000 in non-farm payrolls for February, surpassing the consensus forecast.

However, revisions showed a combined downward adjustment of 167,000 for December and January.

Average hourly earnings rose slightly less than expected, by 0.14%, indicating a moderation in wage growth.

The unemployment rate meanwhile ticked up two tenths of a percentage point to 3.7%, adding to the sense of a mixed economic picture.

"Alongside the rise in the unemployment rate to a two-year high and a much weaker rise in wages, there is less reason now to be concerned that renewed labour market strength will drive inflation higher again," said Andrew Hunter, deputy chief US economist at Capital Economics.

"The decline in the job quits rate to below its pre-pandemic level suggests wage growth will slow a lot further over the coming months."

Closer to home, fresh data showed a stagnant eurozone economy towards the end of 2023, with the bloc narrowly avoiding recession.

Eurostat reported that seasonally-adjusted GDP remained unchanged in both the eurozone and the wider EU, in line with expectations.

Year-on-year growth was marginal, with GDP increasing by 0.1% in the eurozone and by 0.2% in the wider bloc.

Notably, Germany, the largest economy in the EU, experienced a 0.3% decline in GDP month-on-month, while Spain, France, and Italy saw modest growth.

Despite those fluctuations, overall annual GDP growth for the eurozone and the EU stood at 0.4%.

"Looking ahead, we think productivity will pick up, as labour hoarding practices reverse, offsetting a slight slowdown in employment growth, such that GDP growth picks up," said Melanie Debono, senior Europe economist at Pantheon Macroeconomics.

"We think consumers spending growth will pick up as real income growth recovers.

"But the ECB tightening cycle last year will continue to weigh on investment."

Furthermore, German industrial production demonstrated resilience, exceeding expectations in January.

According to Destatis, production in industry rose by 1%, rebounding from a revised 2% decline in December.

Analysts had anticipated a smaller uptick of around 0.5%.

However, year-on-year, industrial production showed a decline of 5.5%, underscoring ongoing challenges within the sector.

Deal news in focus as Mondi agrees to buy DS Smith

On London's equity markets, packaging firm Mondi declined 1.94% following its agreement to acquire smaller rival DS Smith for £5.1bn.

DS Smith jumped 5.17% as investors reacted positively to the news, while sector peer Smurfit Kappa Group saw a more modest increase of 1.21%.

Informa shares advanced 0.53% after the company raised its 2024 guidance, citing strong growth in overseas markets that bolstered full-year revenues and profits.

Just Group surged 13.68% following the announcement of an accelerated timeline to double profits, now expected to be achieved in three years instead of five.

On the downside, Mike Ashley's Frasers Group slipped 0.66% as the closure of Matches, acquired just two months ago, was confirmed.

Currys also fell, losing 1.53% after receiving approval to sell its Greece and Cyprus retail business, Kotsovolos.

In broker note action, PZ Cussons lost 1.25% after Barclays downgraded its shares, while AG Barr slipped by 0.39% despite an upgrade from the same outfit.

Spirax-Sarco Engineering faced a downgrade to 'sell' from 'hold' at Stifel, contributing to a decrease of 0.75%.

Outside the FTSE 350, Petrofac surged by 6.45% following the announcement of a $200m operations contract from Turkemengas at the Galkynysh Gas Field.

Meanwhile, wealth manager Mattioli Woods skyrocketed 32.33% after agreeing to be acquired by private equity firm Pollen Street Capital in a £432m deal.

Reporting by Josh White for Sharecast.com.

Market Movers

FTSE 100 (UKX) 7,659.74 -0.43%
FTSE 250 (MCX) 19,601.78 0.09%
techMARK (TASX) 4,517.98 -0.46%

FTSE 100 - Risers

Smith (DS) (SMDS) 342.00p 5.17%
Convatec Group (CTEC) 286.00p 3.77%
Legal & General Group (LGEN) 249.60p 1.96%
Aviva (AV.) 470.50p 1.80%
BT Group (BT.A) 109.40p 1.77%
Vodafone Group (VOD) 70.94p 1.66%
Reckitt Benckiser Group (RKT) 5,164.00p 1.57%
Airtel Africa (AAF) 95.75p 1.43%
Land Securities Group (LAND) 632.40p 1.25%
Smurfit Kappa Group (CDI) (SKG) 3,336.00p 1.21%

FTSE 100 - Fallers

Entain (ENT) 747.00p -5.44%
Melrose Industries (MRO) 602.80p -2.49%
Rentokil Initial (RTO) 492.00p -2.42%
Mondi (MNDI) 1,348.50p -2.28%
GSK (GSK) 1,673.00p -2.23%
Fresnillo (FRES) 467.00p -2.22%
St James's Place (STJ) 470.40p -2.18%
Ocado Group (OCDO) 448.40p -2.16%
Rio Tinto (RIO) 4,869.50p -2.13%
Ashtead Group (AHT) 5,028.00p -1.91%

FTSE 250 - Risers

Just Group (JUST) 101.40p 13.68%
ITV (ITV) 70.54p 3.16%
Derwent London (DLN) 2,100.00p 3.04%
North Atlantic Smaller Companies Inv Trust (NAS) 3,760.00p 3.01%
Hipgnosis Songs Fund Limited NPV (SONG) 62.70p 2.79%
SSP Group (SSPG) 222.60p 2.68%
Carnival (CCL) 1,147.00p 2.64%
IWG (IWG) 182.30p 2.47%
British Land Company (BLND) 367.70p 2.45%
AO World (AO.) 92.75p 2.43%

FTSE 250 - Fallers

Tullow Oil (TLW) 28.24p -3.81%
Harbour Energy (HBR) 260.00p -3.67%
Inchcape (INCH) 636.00p -3.42%
Ferrexpo (FXPO) 70.20p -2.90%
Watches of Switzerland Group (WOSG) 377.00p -2.89%
Indivior (INDV) 1,671.00p -2.74%
Future (FUTR) 611.50p -2.55%
Plus500 Ltd (DI) (PLUS) 1,723.00p -2.43%
Tyman (TYMN) 290.00p -2.19%
Domino's Pizza Group (DOM) 360.00p -2.07%

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