FTSE 100 hits all-time high; energy stocks jump

Feb 3 (Reuters) – Britain’s internationally focused FTSE 100 briefly hit record high levels on Friday, boosted by gains in energy stocks as well as strength in the dollar after data showed stronger-than-expected U.S. job additions.

The commodity-heavy FTSE 100 (.FTSE) closed 1.0% higher at 7901.80 points, after touching an all-time level of 7,906.58 at 1545 GMT.

U.S. job growth accelerated sharply in January while the unemployment rate declined to a more than 53-1/2-year low, pointing to a persistently tight labour market and signs of economic resilience.

“Sentiment is pretty positive today because it’s looking like the U.S. might be able to avoid a hard landing, and the soft landing narrative is coming to the fore,” said Giles Coghlan, chief market analyst at HYCM.

Strong gains in the U.S. dollar after the jobs data also boosted the export-heavy FTSE 100.

“Most of them (investors) read strengths within the U.S. economy as another reason for the U.S. Federal Reserve to raise interest rates. But it doesn’t seem to be front of mind right now,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

“It is because the expectation is that inflation has peaked and is coming down from those ultra high levels.”

The commodity-heavy index also derived a boost from energy stocks (.FTNMX601010), up 2.6% with Shell (SHEL.L) jumping 3.3% a day after it delivered a record $40 billion profit in 2022.

The domestically focused FTSE 250 index (.FTMC), however, slipped 0.1% as the pound declined.

Still, both the UK equity indexes logged weekly gains after dovish comments from the Federal Reserve and the Bank of England this week raised hopes that the central banks could pause interest rate hikes soon.

Bank of England Chief Economist Huw Pill said it was important not to raise borrowing costs too high, a day after BoE hiked interest rates to 4% and forecast a shallow recession.

Discount retailer B&M (BMEB.L) gained 3.4% and Marks & Spencer (MKS.L) rose 1.2% after Deutsche Bank upgraded their stocks to “buy” from “hold”, saying the outlook for retailers is getting less “chilly”.

Nanoco Group (NANON.L) slumped 26.6% after the nanotechnology company provided a half-year trading update and said it had agreed to a $150 million litigation settlement with Samsung Electronics (005930.KS).

Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Subhranshu Sahu, Shinjini Ganguli and Mark Heinrich

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