London markets jump higher on back of US rate cut speculation

The London markets surged higher on news of softening US-Mexico trade tensions and speculation of a rates cut in the US.

The FTSE 100 closed higher, up 72.09 points at 7,331.94 at the end of trading on Friday.

Fiona Cincotta, senior market analyst at City Index, said: “European markets were already on a front foot owing to optimism that progress was being made in the trade and immigration talks between US and Mexico.

“The weaker than forecast NFP (non-farm payrolls) figures added to speculation that the Federal Reserve will cut rates giving equities a further injection of life.”

David Madden, market analyst at CMC Markets UK, added that “traders have pounced” on the message that the US central bank is open to the possibility of loosening monetary policy.

The FTSE was joined on the ascendancy by the other major European markets, which were also buoyed to their highest levels since mid-to-late May.

The German Dax rose by 0.77% and the French CAC jumped by 1.62%.

In the US, the Dow Jones was pushed higher despite weaker than expected jobs growth and weakness in the dollar.

Sterling bounced on the back of the slump in the US dollar, while it was also buoyed by the Halifax house price index which showed prices were up 0.5% in May, exceeding the 0.2% decline predicted by economists.

The pound was up 0.54% to 1.275 versus the US dollar and decreased 0.07% to 1.130 versus the euro.

In stocks, scandal-hit mining giant Ferrexpo saw its shares jump despite bosses saying they are no closer to uncovering any wrongdoing at the firm over payments to a Ukrainian charity.

The iron-ore miner, which held its annual general meeting on Friday, said it has also appointed a new chairman of its audit committee and its independent review committee.

Shares in Ferrexpo closed trading up 9.5p at 248.3p.

Shares in FTSE 250 hotel firm Millennium & Copthorne soared by 175p to 675p on Friday afternoon after it announced it had agreed a deal to be acquired by its majority owner Singapore-based City Developments Limited (CDL).

The maker of Irn Bru saw shares lift slightly after it announced its entrance into the alcohol-free spirits market for the first time.

AG Barr spent £1 million buying a 20% minority stake in STRYYK, which makes alcohol-free rum, vodka and gin, and will also be the exclusive UK distributor for the brand’s parent company.

Shares in the drinks business rose by 9p to 969p.

Warhammer maker Games Workshop shares jumped after the retailer announced it has paid more than £5 million in bonuses to staff.

Shares in the company closed up 226p at 4,672p.

The price of oil jumped after Opec and other oil producers indicated their preference at extending production cuts.

The price of a barrel of Brent crude oil rose by 1.2% to 63 US dollars.

The biggest risers on the FTSE 100 were Smurfit Kappa Group, up 86p at 2,280p, British American Tobacco, up 98.5p at 3,014p, Tui, up 24.2p at 743.2p, and Intercontinental Hotels Group, up 161p at 5,215p.

The biggest fallers on the FTSE 100 were Marks and Spencer, down 3p at 220.5p, Next, down 60p at 5,716p, IAG, down 3.5p at 466.8p, and Flutter Entertainment, down 32p at 5,860p.

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