Miners, weaker pound drive FTSE 100 to 0.9% weekly gain

Gains for mining shares on Friday helped push up the broader U.K. equity market, while a weaker pound following the release of the U.S. monthly jobs report provided a boost the export-dependent FTSE 100.

Air carriers International Consolidated Airlines Group SA and EasyJet PLC gained following business updates, but shares of banking heavyweight HSBC PLC declined.

How markets are moving

The U.K.s FTSE 100 index
UKX, +0.86%
jumped 0.9% to close at 7,567.14, also ending 0.9% higher for the week. That means the London benchmark now has risen for six weeks straight, something it hadnt achieved since January.

The pound
GBPUSD, -0.2210%
traded at $1.3530 after hitting an intraday low of $1.3487 in the wake of U.S. jobs data. Sterling bought $1.3573 late Thursday in New York, and is down roughly 1.8% this week against the greenback. That continues a recent slide driven by disappointing British economic data and a strengthening dollar.

Check out: Whats happening to Londons cranes? Brexit bites into U.K. construction industry

Whats driving the market

Blue-chips extended gains in afternoon trade, getting a lift as the pound continued to struggled. Sterling fell to its lowest versus the dollar since Jan. 11, FactSet data showed, as the dollar strengthened on back of U.S. jobs figures for April. The jobs report overall suggested the Federal Reserve should remain on track to deliver two, if not three, additional interest-rate increases this year. Pound weakness helps the FTSE 100 index, as many of its components draw revenue in foreign currencies.

U.S. wage growth was flat, with the 12-month increase in pay steady at 2.6%. But the worlds economy generated a solid 164,000 jobs, with the shortfall in expectations cushioned by upward revisions for March. The unemployment rate slipped to a 17-year low of 3.9%.

Read: U.S. adds 164,000 new jobs in April

Stocks in the U.K. and Europe
SXXP, +0.63%
advanced ahead of the jobs report, as investors appeared to latch onto upbeat comments about trade talks between the U.S. and China. U.S. Treasury Secretary Steven Mnuchin early Friday said the talks were going well, according to media reports.

A Chinese government statement released Friday afternoon described the talks as frank, efficient and constructive. Still, significant disagreements over certain issues remained, according to the statement. Worries about heightened trade tensions between the worlds two largest economies have rattled financial markets throughout this year.

The U.S. delegation presented Chinese officials with a lengthy list of demands aimed at reducing the trade imbalance between the worlds two biggest economies, The Wall Street Journal reported.

Also injecting some cheer Friday was Caixin data, which showed Chinas services sector grew at a faster pace in April.

Mining stocks, which can be sensitive to developments in China, were higher Friday. China is a big buyer of industrial and precious metals. The basic materials group has a nearly 9% weighting on the FTSE 100, and miners have a roughly 88% weighting in that sector, according to FactSet data.

Stocks in focus

Among miners, BHP Billiton PLC
BLT, +2.79%
BHP, +1.45%
rose 2.8%, Fresnillo PLC
FRES, +0.96%
picked up 1% and Antofagasta PLC
ANTO, +1.26%
added on 1.3%.

Pearson PLC
PSON, +7.66%
rallied 7.7%, topping the FTSE 100, after the educational materials publisher confirmed its 2018 earnings guidance and posted a 3% increase in underlying revenue in North America, the companys largest market.

IAG shares
IAG, +5.84%
ICAGY, +4.89%
climbed 5.8%. The parent company of British Airways and Vueling said its first-quarter adjusted operating profit rose by 75%.

HSBC Holdings PLC
HSBA, -0.96%
HSBC, -1.99%
lost 1% after the Asia-focused lender posted a rise in operating costs in the first quarter. HSBC said it plans to buy back another $2 billion in shares. UBS analysts said they expected $4 billion in buybacks this year.

EZJ, +1.74%
shares ended up 1.7%. The budget airline said its load factor, or the percentage of a plane filled with passengers, rose to 93.4% in April, from 92.9% the previous year.

Among so-called dollar earners, consumer products maker Reckitt Benckiser Group PLC
RB., +3.00%
climbed 3% and luxury goods maker Burberry Group PLC
BRBY, +2.26%
BURBY, +2.01%
moved up 2.3%.

What strategists are saying

This was not a bad [U.S. jobs] report, but it wasnt an exciting report either; it was just slightly off what the market was expecting. The bottom line is that it is not going to alter the Feds intentions for hiking across the rest of the year, with the next rate rise expected in June, said Fiona Cincotta, senior market analyst at City Index, in a note.

Despite the odds of a more aggressive Fed easing investors were still jumping into the dollar on Friday afternoon, pushing the greenback to a fresh four-month high, she added. Sterling has dived almost 900 points in just three weeks as central bank policy diverges. Pound traders will now look to the Bank of England (meeting) next week for further clues, said Cincotta.

Related Topics United Kingdom London Stock Exchange London Markets Bank of England Europe European Markets

Quote References UKX +64.45 +0.86% GBPUSD -0.0030 -0.2210% SXXP +2.41 +0.63% BLT +43.40 +2.79% BHP +0.69 +1.45% FRES +12.50 +0.96% ANTO +12.40 +1.26% PSON +63.60 +7.66% IAG +37.40 +5.84% ICAGY +0.86 +4.89% HSBA -6.90 -0.96% HSBC -0.99 -1.99% EZJ +28.00 +1.74% RB. +167.00 +3.00% BRBY +41.50 +2.26% BURBY +0.51 +2.01% Show all references
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Carla Moz茅e is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee.

Carla Mozee

Carla Moz茅e is a reporter for MarketWatch, based in London. Follow her on Twitter @MWMozee.

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FTSE 100 Index GBP FTSE Indices: UKX 7,567.14 +64.45 (+0.86%)

Volume 0
Open 7,503
High 7,570
Low 7,503
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Div Yield 0
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