London’s FTSE 100 index stayed in the green for most of Friday before dipping into the red, on the back of American tech giants reporting, and encouraging job figures.
The capital’s premier blue chip index was called to open 60 points higher at 7,682, and closed 0.09 per cent down to 7,615.54.
Meanwhile the midcap FTSE 250, which is more aligned with the UK domestic market, surged to 0.22 per cent, at 19,172.64.
They both fell from morning highs, with the FTSE 250 at one point being near 1.5 per cent up.
While US tech stocks dominated overnight news, the big news of the day was the US added 350,000 new jobs last month, almost double the expected 180,000, suggesting that the US economy was strong enough that a cut in interest rates in March from the Federal Reserve is now “off the table”.
The economy added jobs to almost every sector in January, with professional and business services gaining a notable 74,000 jobs, compared to its average monthly gains of 14,000 in 2023.
The only sector to see a decline in jobs was the mining, quarrying, and oil and gas extraction industry, which lost 5,000.
Average hourly earnings rose by 19 cents, or 0.6 per cent over the month, also exceeding expectations.
Overnight, Facebook’s parent firm Meta said it was closing in on one of its best years yet with a jump in revenue as the multinational tech giant continues its “longer-term” push into AI and virtual reality.
In a quarterly and full-year update to investors, the Facebook owner reported an overall 16 per cent jump in revenue for the year to $134.9bn, as well as announcing a dividend for the first time.
Meanwhile, Apple reported sales and profit that beat Wall Street estimates, powered by growth in its iPhone business. But China sales missed analysts’ targets.
Amazon’s shares surged following impressive earnings results. Amazon witnessed a significant after-hours increase of over seven per cent to $170.60 following its strong fourth-quarter earnings report.
Driven by innovative AI features in its cloud and ecommerce divisions, Amazon’s revenue exceeded expectations, with its cloud computing division AWS contributing a 13 per cent rise to $24.2 billion in the December quarter.
“Amazon’s high-margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest (last-mile delivery, fulfilment, Prime Now, Fresh, Prime digital content, Alexa/Echo, India, AWS, etc). Amazon Prime membership growth drives recurring revenue and positive mix shift,” noted Brian Nowak, Equity Analyst at Morgan Stanley.
In the UK, London woke up to disappointment, as January was another below-par month for retailers. A new report by the British Retail Consortium (BRC) showed footfall across the capital declined by 1.7 per cent at the start of the month. This has widened from a fall of 1.4 per cent recorded in December.
Helen Dickinson, chief executive, said: “Many consumers appear particularly bargain-focused, with the first half of the month boosted by the January sales.
“However, the latter part of January saw fewer shoppers out as stormy weather led to a bigger footfall decline in shopping centres and high streets.”
Andy Sumpter, EMEA retail consultant at Sensormatic Solutions, said: “With disruption from two named storms in January dampening footfall, retailers also faced tempestuous trading conditions caused by the ongoing cost of living spending squeeze and stubbornly sticky inflation.”
In a relatively quiet corporate morning, scandal-stricken makeup firm Revolution Beauty said it contests allegations made against it by a former shareholder Chrysalis Investments.
The biggest riser was Wizz Air after it said passenger numbers surged in January, growing 14.2 per cent from last year, as the airline’s level of pollutants grew almost twice as fast as its passengers.
Wizz Air’s share price rose by 10.28 per cent. Other risers included Aston Martin Lagonda up around four per cent, while Diageo and BT were up by around three per cent on the FTSE 100.
“The FTSE 100 made a strong start on Friday morning, lifted by positive sentiment in the US overnight as Amazon and Meta chalked up stonking gains on their latest updates,” says AJ Bell investment director Russ Mould.
“While the scorecard for the Magnificent Seven in the current earnings season to date is mixed, Amazon and Meta certainly produced stand-out quarterly updates, with Meta unveiling a maiden dividend in what felt like a significant milestone.
“It feels a healthier situation to have the markets driven by strong earnings and corporate success rather than ongoing guesswork about when central banks are going to cut rates.
“Oil prices eased amid hopes for progress on peace talks between Hamas and Israel, with the main fly in the ointment for markets being the troubles being experienced by Japanese banking outfit Aozora Bank which is being hit by bad property loans in the US.
“Banking crises, even if they only affect one institution, often create nervousness around the risks of contagion.”
In other corporate news, UK oil supermajor BP has appointed Kate Thomson as chief financial officer, who becomes the first woman to hold the position at the firm.
Thomson will earn an annual salary of £800,000 plus bonus eligibility and a cash allowance in lieu of pension equal to 20 per cent of the base salary.
