The FTSE 100’s cyclical sectors were leading the way higher on Friday with the miners, financials and consumer stocks gaining and taking the FTSE 100 above 7,950.
Continuing the rally sparked by record Chinese manufacturing data earlier this week, the top three FTSE 100 risers were miners Antofagasta, Rio Tinto and Anglo American. Rio Tinto is up around 10% in a week.
“A sea of green greeted the main European indices on Friday including a 0.3% rise in the FTSE 100 and a 0.7% advance in the Dax. It was certainly a ‘risk-on’ day for UK equities, with the likes of Ocado and Scottish Mortgage Investment Trust among the top risers. Miners and packaging companies were also in demand, implying that investors continue to find reasons to stay optimistic despite patchy economic conditions,” said Russ Mould, investment director at AJ Bell.
Rightmove was slightly weaker after the property app said their engagement levels stumbled in 2023. Admiral was the FTSE 100’s top faller after analysts at Citigroup cut the insurer to neutral with 2,272p price target.
Other notable ratings changes include Bank of America’s 9,550p increased price target for London Stock Exchange and Numis cutting Rightmove to add from buy.
US Interest Rates
Sentiment was improved by comments from a Fed official suggesting the next rate hike from the United States could be just 25bps, instead of 50bps. “Right now I’m still in very firmly in the quarter-point move pacing,” said Atlanta Federal Reserve President Raphael Bostic.
Bostic’s comments invigorated equity bulls and US equity futures rose in line with European stocks.
A slower pace of rates hike will be welcomed by markets fixated on forecasting terminal US interest rates. However, Bostic is just one Fed official commenting after a string of strong economic data that warrants a higher level of interest rates.
Non-farm payrolls next week will provide further insight into the health of the world’s largest economy after adding 517,000 jobs in January.