London’s blue-chip index ended a quiet Friday session 25 points higher at 10,679, capping a week that delivered a total gain of 1.6% for the FTSE 100.
Trading was subdued for much of the session, with Wall Street closed for the Independence Day holiday reducing transatlantic flow and adding to the day’s volatility.
The main catalyst behind market sentiment this week was a weaker-than-expected US nonfarm payrolls report, which showed the American economy added just 57,000 jobs in June, roughly half the 113,000 economists had forecast.
April and May figures were also revised lower, while the unemployment rate dipped to 4.2%, reflecting a fall in labour force participation rather than genuine jobs growth.
Swissquote’s Ipek Ozkardeskaya said the data “looked soft enough to encourage the market to trim Federal Reserve rate hike expectations for this year,” with markets still pricing in one hike, at just over a 50% probability for September.
Gold responded sharply to the shifting rate expectations, rising 1.5% to $4,183.92 per ounce as the dollar weakened and US Treasury yields retreated.
Fresnillo PLC (LSE:FRES) topped the FTSE 100 risers’ list, climbing 2.6% in early trade as gold and silver prices surged on the back of the softer labour market data.
AJ Bell’s Dan Coatsworth noted that “last year’s stock market darling Fresnillo has regained its mojo and topped the FTSE 100 risers’ list after gold got back on its feet.”
Coatsworth explained that the US jobs data pointed to a softer labour market, raising hopes the Fed would not raise interest rates, which reduced the appeal of fixed income and redirected attention toward gold.
“Investors might have seen this market shift and decided it was time to add back some more gold,” he added, noting the precious metal had dipped below $4,000 earlier in the year as bond yields attracted capital away from commodities.
Close Brothers Group saw its shares jump 7% after Shore Capital analyst Gary Greenwood upgraded the specialist lender to ‘buy’ from ‘hold’, lifting his price target to 495p from 490p.
Greenwood argued that the stock had “drifted back towards 400p in recent weeks, underperforming the wider sector despite no meaningful deterioration in the underlying investment case,” with motor finance uncertainty remaining the central overhang.
Shore Capital calculated that Close Brothers retains around £374 million of core capital headroom above its minimum regulatory requirement, giving it substantial capacity to absorb any further provisions beyond its existing £320 million pot.
Greenwood said a sustainable 10% return on tangible equity would justify a valuation of around 655p, representing considerable upside from current levels around 408p.
In Asia, South Korea’s Kospi surged as much as 6% as Samsung Electronics Co Ltd (LSE:BC94) jumped close to 10% following reports that AI developer Anthropic is in talks with the company to produce a specialised AI chip.
Memory chipmaker SK Hynix gained 9%, underscoring the speed at which sentiment across the semiconductor sector can reverse following a heavy sell-off.
Tickmill Group’s Patrick Munnelly said: “The speed of today’s rebound shows investors remain eager to buy into the AI story whenever conditions improve,” adding that semiconductor stocks had become the market’s preferred vehicle for expressing views on AI spending and risk appetite.
Deutsche Bank’s Jim Reid noted the recent bout of “tech altitude sickness” appeared to be easing, with the Samsung-Anthropic reports providing a fresh catalyst for the sector across Asian markets.
China’s services PMI came in at 54.1 for June, ahead of forecasts of 53, adding further support to a positive mood across the region and pushing the Hang Seng up 1.6% on the day.