The FTSE 100 dipped slightly on Friday as the index consolidated after a recent rally and held steady above the 8,700 level.
London’s leading was trading down 0.1% at 8,711 at the time of writing after hitting fresh record highs yesterday.
US Non-Farm Payrolls, widely considered the single most important data on the economic calendar, was, of course, the main event on Friday, and the reading for January gave investors reason to be optimistic, even though Non-Farm Payrolls missed expectations.
The headline jobs added figure came in at 143,000 compared to estimates of 175,000. Although the miss of expectations will be a disappointment, there is underlying strength in the US labour market.
The FTSE 100 was happy to settle into sideways trade in early trade and showed little sign of movement in either direction shortly after the US jobs numbers.
It’s been a record-breaking week for London’s leading index as investors jumped into UK-centric stocks on the back of a 0.25% interest rate cut by the Bank of England.
However, the initial enthusiasm around the possibility of further rate cuts was dampened by the slashing of UK growth forecasts for 2025. That said, investors seemed content with easier monetary policy and the hopes of additional rate cuts – especially as it meant the pound could remain depressed against the dollar in the near term and provide support for London’s overseas earners.
Legal & General shares had a positive reaction to news of the disposal of its US protection unit in a deal worth £1.8bn. Shares were 3% higher at the time of writing and took the top spot on the FTSE 100 leaderboard.
“Financial services provider Legal & General has sharpened its US facing strategy today divesting its protection business to long-standing partner Meji Yasuda, with whom it has also agreed a partnership to target the lucrative US Pension Risk Transfer market. Meji Yasuda intends to take a 5% stake in the company. Investors liked the vote of confidence with the shares rising in early trading,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
Housebuilders were among the fallers as investors fretted about the outlook for the UK economy. It will be fascinating to see how the highly interest rate-sensitive sector balances the tailwind of lower interest rates and the threat of a slowdown in the early months of 2025.
Mondi was the top faller as investors booked profits after a monster rally since the middle of January.