London’s blue-chip index gave back early gains on Friday, finishing the session broadly flat as investors locked in profits following the previous day’s strong advance.
The FTSE 100 slipped around 26 points to 10,627 after an initial morning surge faded, with Wall Street closed for the Independence Day holiday reducing market liquidity and adding to the subdued tone.
The catalyst for the week’s positive momentum was a weaker-than-expected US jobs report, which trimmed expectations for aggressive Federal Reserve rate hikes going forward.
The US economy added just 57,000 nonfarm jobs in June, roughly half the 113,000 economists had forecast, while April and May figures were also revised lower.
Swissquote’s Ipek Ozkardeskaya said the data “looked soft enough to encourage the market to trim Federal Reserve rate hike expectations for this year,” with markets still pricing in one hike, and just over a 50% chance of it arriving as early as September.
Gold benefited directly from the shifting rate outlook, rising 1.5% to $4,183.92 per ounce as the dollar weakened and US Treasury yields fell on the softer labour market data.
Fresnillo PLC (LSE:FRES) topped the FTSE 100 risers list, climbing 2.6% in early trade as both gold and silver prices surged, with silver jumping 2.4% to $62.47 per ounce.
AJ Bell’s Dan Coatsworth noted that “last year’s stock market darling Fresnillo has regained its mojo and topped the FTSE 100 risers’ list after gold got back on its feet.”
Coatsworth added: “Investors might have seen this market shift and decided it was time to add back some more gold,” pointing out that the precious metal had recently dipped below $4,000 as bonds and equities attracted capital away from it.
On the downside, Intercontinental Hotels Group PLC (LSE:IHG) was the biggest drag on the FTSE 100, falling 1.8%, while Tesco PLC (LSE:TSCO) shed 1.6% and Entain PLC (LSE:ENT) dropped 1.5%.
Across Asia, South Korea’s Kospi surged nearly 6%, driven by a close to 10% jump in Samsung Electronics Co Ltd (LSE:BC94) after reports that AI start-up Anthropic is in talks with the company to produce a specialised AI chip.
Memory chipmaker SK Hynix also gained 9%, underscoring how rapidly investor sentiment can swing across the semiconductor sector on AI-related headlines.
Tickmill Group’s Patrick Munnelly said: “The speed of today’s rebound shows investors remain eager to buy into the AI story whenever conditions improve,” warning that volatility is likely to remain elevated as the market reacts to every new development.
Deutsche Bank’s Jim Reid noted that a recent bout of “tech altitude sickness” appears to be easing, with the Samsung-Anthropic reports providing a fresh catalyst for the sector broadly.
Hong Kong’s Hang Seng climbed 1.6%, extending its weekly gain to around 4%, while China’s services PMI came in at 54.1 for June, ahead of forecasts of 53, adding to the positive regional mood.
Back in the US, the Dow Jones added 1% to finish at a fresh record high ahead of the long weekend, while the Nasdaq fell 0.8% as a semiconductor selloff weighed on technology stocks, and the S&P 500 slipped 0.1%.
