The FTSE 100 started the week on the front foot after Friday’s non-farm payrolls eased fears of a string of US interest rate hikes.
London’s leading index pushed above 10,500 in early trade before the rally faded as the session progressed.
“The FTSE 100 managed a steady start on Monday morning after weak US jobs numbers prompted a Wall Street rally on Friday,” said AJ Bell investment director Russ Mould.
“The non-farm payrolls number was a long way short of expectations, but in a looking-glass world where weak economic data could mean relief on the rate hike front this has been taken positively by investors. This logic was applied in Asia too, which saw widespread gains.”
But the stock market’s advances were capped by the uncomfortable realisation that although the US jobs market was showing signs of weakness, oil prices were still above $100 and risking further inflation.
Susannah Streeter, Chief Investment Strategist, Wealth Club, said: “The Middle East remains mired in uncertainty, keeping crude costs elevated and piling pressure on companies and consumers around the world.”
The uncertainty facing consumers was reflected in the FTSE 100 on Monday, where interest rate-sensitive sectors were among the stocks in the red.
Companies related to the UK’s housing market were out of favour, with Barratt Developments, Howden Joinery and DIY specialist Kingfisher all lower on the day. The boost from Andy Burnham’s new Help to Buy scheme has been erased from most housebuilders’ share prices.
However, plenty of stocks were up on Monday to offset softness in those exposed to borrowing costs.
Ithaca Energy was the FTSE 100’s top performer on the news that it has diversified its production base through the acquisition of Canadian assets.
Yaniv Friedman, Executive Chairman of Ithaca Energy, said: “This acquisition marks the next era of growth for Ithaca Energy as we make our inaugural international acquisition in Offshore East Coast Canada. The Transaction delivers on our clear stated growth strategy as we seek to diversify and grow our production and resource base and replicate our success in the United Kingdom Continental Shelf through disciplined international expansion in regions we believe we can create long-term value for our shareholders.”
Ithaca Energy shares were 3.1% higher at the time of writing.
BT was also boosted by an acquisition. In the telecoms group’s case, the takeover of TalkTalk out of administration and the promise of an additional 2.5 million customers for BT sent the stock 2% higher.
Commodity companies Shell, Antofagasta and BP posted gains of around 1%, helping edge the FTSE 100 into positive territory.