The FTSE 100 rose on Friday as investors continued to assess a week of central bank action, major economic data, and the reinvigoration of the US regional bank crisis.

The FTSE 100 was 0.8% higher at the time of writing, shortly after the Non-Farm Payrolls release on Friday.

Widely seen as the globe’s most important single data point, the Non-Farm Payrolls provide deep insight into the health of the US economy.

Friday’s highly anticipated jobs number beat expectations, with 253,000 jobs added in the month of April. An Economist consensus had predicted 185,000 jobs added. The unemployment rate also fell.

While the beater-than-expected number suggests underlying health in the US economy, markets will be mindful that it means the Federal Reserve has no reason to cut rates in the short term.

Although many economists expect a US recession later this year, the US economy is showing little sign of slowing down.

FTSE 100 movers

UK banks and housebuilders were among the top risers on Friday. A rebound in stricken regional US banks PacWest and Western Alliance helped spur a rally in UK banks.

Barclays, HSBC and NatWest were up over 2%, while Lloyds gained 1.6%. UK banks have seen little operational impact during the banking turmoil, which has been limited to a few European institutions and mainly US regional banks.

Housebuilders were again performing strongly after upbeat house price data earlier this week. Taylor Wimpey, Persimmon and Barratt Developments were up between 0.5% and 1.6%. The sector has been heavily sold off, and many will see long-term value in individual names.

Underlining the cyclical nature of today’s rally, miners were higher after being under pressure for the past few weeks.

IAG was higher after reporting a surprise profit in the first quarter.

Alba Mineral Resources shares traded near multi-year lows on Friday after the Wales-focused miner released final results dominated by delays to their Clogau gold project.

Alba Minerals shares were down 5% in low-volume choppy trade at the time of writing on Friday – and were trading near the lowest levels since 2020. Shares had been trading between being 4% higher and 5% lower for most of Friday’s session.

Alba Mineral Resources shares have sunk circa 70% over the past 5 years.

George Frangeskides, Executive Chairman of Alba Mineral Resources, said he had purchased £15,000 worth of shares during the period and now has a total of 48 million shares worth around £48,000 at current prices.

The Chairman hopes to purchase more shares to demonstrate his “steadfast belief” in the company. His holding represents 0.68% of Alba.

Discussing the ongoing delays at their key Welsh project, Frangeskides said:

“Although the ongoing hiatus in the planned in-mine work activities at Clogau has been frustrating, we believe that we are finally approaching a conclusion to the current ecological permitting process and that the HRA, once concluded, can provide a framework for a more streamlined and efficient process for future permitting applications.”

Greater operating loss

Alba recorded a £1,623,000 operating loss in the year, primarily due to costs of listing GreenRoc Mining, a spinout with assets in Greenland.

Alba has two externally operated investments in GreenRoc and the Horse Hill oil project in Surrey.

GreenRoc has increased graphite resources at their Amitsoq Island Deposit threefold with an average grade of 20.41%. Amitsoq is one of just two projects globally with grades in excess of 20%.

Alba wrote down their investment in Horse Hill to £2.6 million – in line with the valuation attributed to the project by the largest shareholders.

The FTSE 100 tracked US stocks lower on Thursday as fears around higher interest rates and renewed volatility in regional US banks knocked confidence.

The FTSE 100 was down 0.76% to 7,728 at the time of writing.

Fed hikes

The Federal Reserve hiked rates 0.25% to the highest level in 16 years overnight and signalled they were not yet ready to cut rates. 

Investors keenly listening to the Fed Chair’s press conference would have been disappointed to learn rate cuts were still a way off. However, Jerome Powell did suggest the Fed was ready to pause rate hikes and wait for further data before amending rates again.

Traders reacted to comments suggesting rates will remain elevated for an extended period by dumping equities overnight. The selling spilled over into the European session this evening.

“We on the committee have a view that inflation is going to come down not so quickly,” Fed chair Powell said.

The risk is the transmission lag between higher rates and economic impact is yet to kick, which could result in a recession later this year.

Non-Farm Payrolls

Many economists are predicting a US recession later this year. While no one will truly welcome an economic downturn, a recessionary environment will help bring down inflation and bring easier monetary policy closer.

Non-farm payrolls due to be released tomorrow will provide insight into the health of the US economy.

PacWest

Regional US banks added to the cautious tone after PacWest was reported to be exploring asset sales and a possible capital raise.

The bank made an announcement after shares sank around 60% following reports the bank was seeking options.

PacWest shares were down 40% going into the US open but the heavy selling was primarily limited to US regional banks.

FTSE 100 movers

Shell was trading 1% higher after a solid Q1 2023 in which the oil giant generated $9.9bn free cash flow. The company will return $4bn to shareholders.

“Despite continuing pressure on the oil price, Shell is still throwing off vast quantities of cash. It’s renewed its efforts to return some of this to shareholders,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

Next shares increased 2% after the retailer demonstrated they were able to withstand economic pressures and maintain healthy sales levels. Sales in the most recent did fall, but less than had been expected.

Stocks trading ex-dividend including Glencore and St James’s Place were the biggest fallers down 6% and 5.5% respectively.

UK banks and miners were also suffering as concerns around interest rates hit cyclical sectors.

Two of the UK private investor favourites in the resources sector are looking to raise further funds.

Greatland Gold (LON:GGP) and Mosman Oil and Gas (LON:MSMN) are both progressing corporate plans for further listings.

Greatland Gold

Earlier this week Greatland Gold announced the appointment of Australian-based corporate lawyer Yasmin Broughton as an Independent Non-Executive Director ahead of the group’s planned listing on the ASX.

Ms Broughton has considerable experience in that market and her skills will be extremely useful as the group pursues its additional listing in Q4 this year.

The £440m capitalised Greatland group is now evaluating a corporate reorganisation, which could mean that the company will sit under a new parent that will be incorporated in Australia.

Obviously, that will need significant approvals from the group shareholders, the UK courts and then also the relevant listing authorities.

Such a move would not interfere with the company’s AIM listing, therefore protecting the mass of UK shareholders.

Greatland is a mining development and exploration company focused primarily on precious and base metals. 

Its flagship asset is the world-class Havieron gold-copper project in the Paterson Province of Western Australia, which was discovered by Greatland and is presently under development in joint venture with ASX gold major, Newcrest Mining Limited.

Newcrest Mining is currently ‘in play’ following a bid approach from global resource group Newmont Mining.

There have been suggestions that if Newmont wins control of Newcrest then Greatland might get the opportunity to buy out its JV interest in due course, for which additional investor interest would be very helpful.

Mosman Oil and Gas

Over at Mosman Oil and Gas it has today declared that it is considering floating off its Australian assets into a separate quote.

The business is an oil exploration, development, and production company with projects in the US and Australia.

Its strategic objectives remain consistent: to identify opportunities which will provide operating cash flow and have development upside, in conjunction with progressing exploration of its existing exploration permit and permit application.

The £5.3m valued company has several projects in the US, in addition to exploration projects in the Amadeus Basin in Central Australia.

Its Australian assets, being the EP 145 permit and the EP(A) 155 exploration permit application in the Amadeus Basin,

It has today issued news that it is progressing positive commercial negotiations on potential future helium production offtake arrangements in respect of EP 145, with two Chinese based companies.

Further to such development the group is now considering that that the best way forward is to pursue a separate stock market listing for the Australian assets in London.

Currently the group is lining up teams of corporate advisers to assist in that process.

Market Reaction

The shares of Greatland Gold have risen over 6% to the current 8.70p, after touching 9p on the news.

While Mosman Oil and Gas shares fell back to 0.0775p, off 7% on the news but after hitting 0.0945p at the best, with four times the daily average dealing volume being achieved by midday.

Shell has taken lower oil prices in its stride and produced a 4% increase in adjusted EBITDA in Q1 2023 when compared to Q4 2022. Shell’s adjusted earnings of $9.6bn for Q1 2023 were only marginally lower than Q4 2022 and were materially higher than Q1 2022.

Shell first saw the impact of higher oil prices due to Russia’s invasion of Ukraine in Q1 2022 and sparked surging profits throughout last year.

The upstream and integrated gas businesses saw adjusted EBITDA for Q1 2023 fall, but strength in the marketing and products segments helped support earnings. Shell’s renewables segment also gathered momentum, with adjusted EBITDA surging 69% from Q4. 

Although lower than Q4, Shell’s cash generation remained robust, with a free cash flow of $9.9bn in the quarter. The oil and gas major announced it would return $4bn to shareholders through share buybacks.

“Despite continuing pressure on the oil price, Shell is still throwing off vast quantities of cash. It’s renewed its efforts to return some of this to shareholders, but there will no doubt be fresh calls to increase contributions to the public coffers,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

“Shell’s also continuing to invest heavily, with capex expected to land between $23bn and $27bn this year. Plans are afoot to reinvigorate the Pierce field in the North Sea which is now contributing to gas supplies after years of only producing oil.”

Shell declared a dividend of 28.75 cents for the quarter – the ex-dividend date is set for 18th May.