London stocks rally after U.S. payrolls
London’s FTSE 100 climbed to its highest level in more than two months on Thursday, supported by a broad rally across sectors after softer-than-expected U.S. employment data eased concerns about further Federal Reserve rate hikes.
The blue-chip FTSE 100 rose 1.7% to close at 10,652.9 points, marking its strongest finish since late April.
The midcap FTSE 250 also advanced, gaining 0.4% and reaching a two-week high.
Healthcare leads the advance
Healthcare stocks were among the strongest performers in London.
The healthcare sub-index gained 4.4%, helped by a sharp rise in AstraZeneca shares.
AstraZeneca climbed 4.9% after reaching a deal worth up to $1.77 billion with China’s CSPC Pharmaceutical Group to develop treatments for kidney-related illnesses.
Consumer and defence shares gain
Consumer-focused names also supported the market’s advance.
Tesco, Coca-Cola HBC and J Sainsbury rose between 2% and 3.7%.
Defence stocks also moved higher, with BAE Systems, Rolls-Royce, QinetiQ Group, Babcock and Chemring gaining between 1% and 7.1%.
U.S. jobs report cools rate concerns
The market mood improved after U.S. job growth slowed more than expected in June.
Payroll gains for the previous two months were also revised lower, strengthening the view that the labour market is cooling.
Following the report, bets on at least one Federal Reserve rate hike this year fell to 76%, according to LSEG data, down from around 84% before the release.
Gold miners benefit from weaker dollar
Precious metal miners advanced 3.3% as gold prices rallied more than 2% against a weaker dollar.
The move in bullion added another source of support for London-listed mining shares during the session.
Geopolitics remains in focus
On the geopolitical front, Iran and the United States concluded a round of indirect talks without signs of progress toward lasting peace.
In the United Kingdom, business confidence fell to its lowest level since 2022, according to a survey of accountants, as the Iran war weighed on sentiment.
Currys falls on chip shortage warning
Among individual UK stocks, Currys dropped 1.4% after warning that a global memory chip shortage could push up prices for smartphones, laptops and other electronics later this year.
The warning added pressure to the electricals retailer at a time when investors are closely watching the impact of semiconductor supply constraints on consumer technology prices.
Capricorn surges on Genel deal
Capricorn Energy jumped 19.8% after Kurdistan-focused oil and gas producer Genel Energy agreed to acquire the company in a $360 million all-cash transaction.
Genel Energy shares also gained ground, rising 7% after the deal was announced.
