FTSE 100 close: London ends week higher after US jobs growth smashes forecasts
London’s FTSE 100 ended the week in the green after house prices fell for the sixth consecutive month in a row, but by less than many had expected.
The FTSE 100 closed up 0.6 per cent at 7,496.38 while the FTSE 250, typically more aligned with the health of the UK economy, finished up 0.79 per cent at 17,738.54.
Much anticipated US jobs growth data was announced at midday, which revealed a massive 336,000 surge in September and is likely to lead to a rise in the Federal Reserve’s interest rates.
Bond yields soared to a 16 year high and the dollar jumped in response, causing investors to fret over whether rates would remain higher for longer – but London markets held ultimately held firm.
Early morning data from Halifax’s House Price Index (HPI) showed average house prices fell by 0.4 per cent in September, as the Bank of England’s interest rate hikes continued to pile pressure on Britain’s housing market.
The average price of a home now sits at £278,601, which is around the level seen in early 2022.
Kim Kinnaird, director of Halifax Mortgages, said “activity levels continue to look subdued compared to recent years, with industry data showing lower levels of new instructions to sell homes and agreed sales.”
But it was insurers that helped prop up London’s premier blue-chip index throughout the day, continuing Thursday’s bounce back from three days in the red.
Aviva shares finished up 5.12 per cent, topping the index throughout morning and early afternoon, after fresh reports the UK’s biggest insurer may be taken over by a foreign buyer.
Russ Mould, investment director at AJ Bell asked: “Is Aviva the next FTSE 100 takeover target? The market certainly seems to think so, judging by the seven per cent share price jump on Friday.”
Chatter that foreign players Allianz, Intact Financial and Tryg are among the potential interested parties has fired up the shares, hot on the heels of a bullish broker note earlier this week.”
“What might they see in Aviva? Well, the business is forecast to have strong free cash flow and excess capital and its valuation is cheap. It has slimmed down in recent years to focus on the stronger parts of the group and there is now an opportunity to increase its position in bulk annuities which looks like a more prosperous market thanks to higher gilt yields.”
The news helped fellow providers Legal and General, Allianz and Prudential rise to the higher end of the FTSE, closing up 3.18, 1.36 and 1.45 per cent respectively.
Other risers included healthcare giant GSK, which pocketed £886m after offloading part of its stake in the healthcare arm of Haleon this morning.
Over on the FTSE 250, Metro Bank rebounded exceptionally from yesterday’s share price tumble, soaring over 17 per cent for most of the day before closing at 11.73 per cent.
Shares at the challenger crashed 20 per cent yesterday morning after reports it was raising hundreds of millions of pounds to shore up its balance sheet. That dip prompted the UK’s financial regulator to summon its bosses to meetings over its finances.
The biggest faller was JD Wetherspoons, which was down nearly 5 per cent at close, despite returning to profit for the first time since the pandemic.