The FTSE 100 closed slightly down on Friday, but still positive on the week. US jobs data on Friday added choppiness to what had been a gradually improving week for London’s leading index.
The FTSE 100 closed down 2 points at 7,556 on Friday, gaining around 1% on the week.
The index was dragged from pillar to post earlier this week by developments in China. Unrest over the weekend put the FTSE 100 on the back foot, before reports Chinese authorities were considering an easing of lockdown rules helped lift the index. The news saw the index hits the highest levels since August.
Equity traders had further reason for optimism on Wednesday as attention shifted to Jerome Powell’s speech and hints the Fed would soon start to slow the pace of rate hikes.
US jobs
However, with the jobs number today suggesting strength in the US economy, the Fed will find it difficult to justify pulling back in the short term and stopped the equity rally in its tracks.
US Non-Farm payrolls rose 263,000 in November versus expectations of just 200,000. Wages surged 5.1% higher year-on-year.
“Whilst the headline news is good for the US economy, the view is that the Federal Reserve will continue to raise rates until the labour market starts to crack and clearly there are no signs of that. The markets therefore reacted on the basis that rates will continue to rise reversing the changes seen following Chairman Powell’s speech earlier in the week,” said Toby Sturgeon, Global Head of Fiduciary Investment Services at ZEDRA.