FTSE heads higher despite wild miss in US jobs report

·2-min read
SUIXI, CHINA - AUGUST 13 2021: A woman works in a factory of aluminium products in Suixi county in central China's Anhui province Friday, Aug. 13, 2021. (Photo credit should read Feature China/Barcroft Media via Getty Images)
Aluminium prices were at a decade-high on Monday. Photo: Feature China/Barcroft Media via Getty

European markets closed in the green on Monday morning in London despite the shock of poor US jobs numbers released on Friday. 

The FTSE 100 (^FTSE) was up 0.7% by the close in London. Meanwhile the DAX (^GDAXI) headed 1% higher in Germany and France's CAC (^FCHI) also rose 0.8%. 

September's jobs report showed fewer US jobs — 235,000 compared with an expected 750,000 — were created, and there was an uptick in wages. The unemployment rate declined to 5.2%.

This has quietened the chatter about potential tapering from the Federal Reserve as conditions still look challenging going into autumn with the Delta variant of COVID-19 weighing on sentiment. 

It is a public holiday in the US today so stock market reactions Stateside will wait until tomorrow. 

Notable updates for the week ahead come from Dunelm (DNLM.L), Ted Baker (TED.L) and Morrisons (MRW.L). 

Elsewhere, aluminium prices (ALI=F) headed to a decade high, before retreating again, as the army seized control in a coup in Guinea and output cuts persisted in China. Guinea is the world’s largest exporter of aluminium raw material. 

Read more: UK e-commerce companies swoop on Amazon marketplace brands

Overnight in Asia, stocks moved higher despite the miss in the US. Hong Kong’s Hang Seng (^HSI) was up 0.9% by the end of the session while the SSE Composite (000001.SS) rose 1.1%. 

Japan’s Nikkei (^N225) also headed 1.8% higher off the back of the news that Japan's prime minister Yoshihide Suga will leave office. 

The TOPIX index headed to a 30-year high, with markets assuming that the shift in leadership increases the probability of further fiscal stimulus measures, said analysts at UBS.

"We continue to position for further upside in Japanese equities, which we rate as most preferred within our global portfolios," said Mark Haefele, chief investment officer at UBS Global Wealth Management. 

"We recently revised up our fiscal year 2021 and 2022 corporate earnings growth forecasts for Japan to 42% and 8%, respectively. 

"Japan’s equity market has a cyclical bias, making it well-placed to benefit from a global growth pickup, and its valuations look undemanding against those of developed market peers.”

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