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(Alliance News) - Stocks in London ended higher on Friday as investors took disappointing US employment figures in their stride, opting instead to focus on the coronavirus vaccine optimism.
The latest US jobs report was a reminder that "real time" economic data suggests the country's economic recovery from Covid-19 is far from complete, despite a spate of promising vaccine news lifting hopes of a return to normality.
A seemingly "daily-flow" of positive vaccine news has been met with "less optimistic" economic data, Oxford Economics Chief US Economist Gregory Daco said.
According to the latest data, nonfarm payrolls rose by just 245,000 in November, a less-than-stellar performance considering the market had forecast a rise of 469,000, cited by FXStreet. In October, 610,000 jobs were added, downwardly revised from 638,000.
Data showed the unemployment rate ticked down to 6.7% from 6.9% in October. The market had expected a fall to 6.8% in November.
The FTSE 100 index closed up 59.96 points, or 0.9%, at 6,550.23, having hit an intraday high of 6,559.18 in early trade - its highest level for nine months. The large-cap index added 2.9% this week.
The mid-cap FTSE 250 index gained 50.25 points, or 0.3%, at 20,182.69, ending the week up 4.1%. The AIM All-Share index ended up 2.68 points, or 0.3%, at 1,068.89, ending the week up 2.8%.
The Cboe UK 100 index closed 1.0% higher at 652.90. The Cboe 250 closed up 0.3% at 17,495.12. The Cboe Small Companies ended up 0.6% at 11,727.90.
In Paris the CAC 40 ended up 0.6%, while the DAX 30 in Frankfurt ended 0.4% higher.
Equity markets have found support after the UK earlier this week became the first country in the world to approve the Pfizer and BioNTech Covid-19 vaccine, putting pressure on the US to follow suit.
"The FTSE 100 has hit its highest level since March thanks to a solid performance in pharma, mining and energy stocks. These sectors have been gaining ground lately and they are connected to the optimism brought about by the positive vaccine news," said CMC Markets analyst David Madden.
Stocks in New York were higher at the London equities close, with investors hopeful the disappointing US jobs data would fuel prospects for additional fiscal stimulus.
The DJIA was up 0.6%, the S&P 500 index up 0.7% and the Nasdaq Composite up 0.5%.
Democratic leaders have backed a USD908-billion bipartisan proposal as a starting point for discussions, and some top Republicans are said to be warming to the idea.
"The sharp slowdown in the rate of US job creation doesn't appear to have bothered markets too much, since it appears the 'bad news is good news' trade is back in town with the release of November's payroll report," said IG Group's Chris Beauchamp. "If things continue in this vein then the pressure on lawmakers to enact fiscal stimulus will build, and even the Federal Reserve may feel the urge to act again, lest the tentative gains of the summer slip away."
On the London stock exchange, oil majors BP ended among the best blue-chip performers, up 3.9%, while Royal Dutch Shell 'A' shares added 3.4% and the 'B" shares gained 3.2%, tracking spot oil prices higher.
Brent oil was trading at USD49.08 a barrel at the equities close, up sharply from USD48.50 at the close Thursday.
Brent crude hit its highest level since its collapse in March, of USD49.87 a barrel, after OPEC and its oil-producing allies struck a deal on Thursday to offer flexibility over changes to production in the coming months.
Flutter Entertainment closed up 3.5% after the gaming company said it completed it placing to raise GBP1.1 billion, which will go towards partly funding the acquisition of a further stake in FanDuel for USD4.18 billion.
The FTSE 100 owner of Paddy Power issued 8.0 million shares at a price of 14,000 pence per share, reflecting a discount of 2.1% to Flutter's closing price on Thursday of 14,300p.
The purchase "materially increases exposure to US market", Flutter said on Thursday, "the most attractive sector opportunity today".
Glencore closed up 3.1%. The Swiss commodities house promoted Gary Nagle to chief executive officer, replacing the long-standing Ivan Glasenberg who is to retire during the first half of 2021.
Nagle currently serves as global head of Glencore's coal industrial business based in Sydney, Australia and will relocate from Australia to Switzerland early next year to work with Glasenberg during the transition. Billionaire Glasenberg took over as CEO in 2002 and became synonymous with the world's biggest trader in coal, nickel, oil and agriculture.
In the FTSE 250, Cineworld Group ended the worst performer, down 15% as the cinema chain hit back at AT&T's subsidiary Warner Bros' decision to release its 2021 movie slate on a streaming website alongside theatrical releases.
Warner Bros will release its entire 2021 slate of movies on HBO Max streaming and in theatres simultaneously. Before the pandemic, blockbuster movies ran only on the big screen for a theatrical window of around 90 days. The "hybrid model" will see films available on HBO Max streaming in the US for one month from the date of their theatrical release.
The announcement follows Warner's earlier decision to release "Wonder Woman 1984" on Christmas Day via its streaming platform at the same time as the big screen - a radical gamble for one of Hollywood's biggest studios, which the industry had widely assumed would be a one-off.
Cineworld responded Friday, saying: "We believe that at such a time WB will look to reach an agreement about the proper window and terms that will work for both sides. Big movies are made for the big screen and we cannot wait to reopen our cinemas in the first quarter in order to offer our customers, as always, the best place to watch a movie."
The cinema operator said the potential vaccine will generate "significant relief" for the industry and enable "cinemas to make a great comeback".
The pound was quoted at USD1.3470 at the London equities close, lower from USD1.3485 at the close Thursday, easing from multi-year highs reached earlier in the session, showing its sensitivity to Brexit-related headlines.
Sterling hit an intraday high of USD1.3539 in afternoon trade - its highest level against the greenback since mid-2018.
Downing Street has said the Brexit trade talks are at a "very difficult point" and warned that time is ticking if a deal is to be struck.
A spokesman for the prime minister told reporters: "Time is in very short supply and we are at a very difficult point in the talks."
Negotiations dragged on until 2300 GMT on Thursday, Number 10 confirmed, as both sides look to hammer out a deal.
Both No 10 and the European Commission declined to confirm whether talks are likely to continue into the weekend after reports surfaced that the EU's chief negotiator Michel Barnier would remain in London, having initially planned to travel back to Brussels on Friday.
Despite optimism in the week that the prospect of a deal was on the horizon, progress appeared to stall on Thursday, with a senior UK Government source claiming Brussels was calling for fresh concessions at the 11th hour and that the prospect of an agreement was "receding".
"We still think a deal is more likely than not - we'd put the chances at roughly 60:40 in favour of a deal. If there were a deal it would probably mean no tariffs or quotas on goods, and trade in services would probably remain similar to how it is now. And once a deal is in place, the UK and the EU could rapidly agree financial services equivalence as well. There would be some inevitable disruption as firms get used to the new rules - there will be rules of origin checks for the first time in many years. But the period of disruption should be relatively short-lived," analysts at Capital Economic commented.
The euro stood at USD1.2140 at the European equities close, lower from USD1.2153 late Thursday. Against the yen, the dollar was trading at JPY104.20, up from JPY103.73 late Thursday.
Gold was quoted at USD1,832.24 an ounce at the London equities close, higher against USD1,826.52 late Thursday.
The economic events calendar on Monday has Germany industrial production figures at 0700 GMT and UK Halifax house price index readings at 0830 GMT.
The UK corporate calendar on Monday has interim results from fashion retailer Ted Baker.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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