The FTSE 100 edged up on Friday as miners and oil stocks rallied amid rising commodity prices ahead of the US Non-Farm Payrolls.
London’s leading index was trading at 10,907, up 0.37% at the time of writing.
“The FTSE 100 was modestly higher in early trading, though short of its recent all-time highs, as the latest developments in the Middle East drove an increase in oil prices,” says AJ Bell investment director Russ Mould.
“Draft terms in an agreement over the Strait of Hormuz between Iran and Oman hinted at Tehran’s leverage in the region – with mooted bans for US and Israeli shipping likely to do little to calm tensions.
“Brent crude was firmly above $80 per barrel to revive fears about inflationary pressures. As investors seek to get a steer on the trajectory of borrowing costs, all eyes will be on the latest US jobs report later.”
There seems to be hesitancy among traders to push the FTSE 100 to test 11,000, which is understandable given the uncertainties on the global stage.
Although the FTSE 100 lacks the technology shares that have caused heightened volatility in the US and Asia, negative sentiment knows no borders, and it feels like the UK doesn’t quite have the exuberance needed to scale a key psychological level.
However, this could change quickly, and with the index trading around 10,900, you can’t rule out 11,000 in the coming weeks.
Fresnillo was the FTSE 100’s top riser, jumping 5% as precious metals prices rose.
Diageo continued to attract interest on Friday, gaining 1.3%, as investors bought in after the drinks group announced a turnaround plan yesterday.
Persimmon dipped 1% as profit-takers took control after a strong short-term run in the Housebuilders. Much like the FTSE 100 itself, Persimmon seems to need a bit more to go its way to break above its recent range.
A slowing rate of UK house price growth would have also taken the wind out of the sails for the builders on Friday after Lloyds said house prices rose just 0.1% over the past year.
“House price movements have had all the ease and comfort of a ride with a learner driver recently, and after edging upwards in June, July saw them stall again. Sellers may be worried that we’re set for falls in the coming months, but they still have some options,” said Sarah Coles, head of personal finance at AJ Bell
“Mortgage rates have been nudging upwards in recent weeks, which hasn’t helped bolster buyer enthusiasm. Meanwhile, global uncertainty coupled with domestic change makes people wary about making a major financial commitment. The jobs market is weighing on confidence too, with the unemployment rate at 4.9% – higher than last year – and vacancies falling again.”