FTSE 100 reaches two-month high as US job confidence trumps UK recession fears

London’s FTSE 100 jumped to a two-month high on Monday as a strong US jobs report and Chinese trading figures got the week off to a positive start for traders.

The US added 528,000 jobs in July, more than double the expected number and prompted gains in the financial markets despite caution following the Bank of England’s bumper interest rate hike last week and warnings of an impending recession.

The FTSE 100 briefly reached 7,500 and ended the day up 42.43 points, or 0.57%, at 7,482.37.

Chris Beauchamp, chief market analyst at online trading platform IG, said: “Everyone continues to look for the beginning of the next leg lower, but it stubbornly refuses to begin.

“Friday’s jobs report seemed to provide the spark, but the new week has begun with gains as investors continue to take the positive view.

“In a potentially worrying development, meme stocks are once again surging, a sure-fire sign that risk appetite is just getting a little bit frothy. But for now there seems little point in fighting this move.”

The UK blue-chip index had a particularly strong performance with Hargreaves Lansdown coming out on top after Barclays and Deutsche Banks raised price targets.

Elsewhere in Europe, the German DAX also had a positive session, wiping out its Friday losses and jumping 0.84% by the time markets closed.

Meanwhile the French Cac 40 lifted by 0.8% at close.

On Wall Street, the US markets opened modestly higher amid several high-profile deals including Pfizer buying Global Blood Therapeutics for 5.4 billion dollars (£4.5 billion). The S&P 500 was up 0.35% and the Dow Jones lifted 0.41% by the time European markets closed.

The pound was down 0.03% against the euro at 1.185 and up 0.31% against the dollar at 1.2 at the close.

In company news, Next is in talks to take a £15 million stake in struggling fashion brand Joules.

Joules has issued a series of profit warnings this year, leaving its shares dropping by nearly 90% since the start of the year.

Shares in Joules finished the day 11p higher at 44p as a result.

Shares at The Works slumped after bosses slashed its profit outlook for the year as they pointed to low consumer confidence and rising inflation impacting sales.

The hobby retailer said the forthcoming Christmas shopping season, which is its most important trading period, could be dampened by changing consumer behaviour.

Shares in The Works closed 12.46p lower at 34.04.

While shares in recruitment company Page Group slid after it reported a positive half-year performance, but warned of slower hiring as inflation increases globally.

The company posted a 9.2% rise in its gross profit for the first half of the year. Shares closed 31.2p lower at 420.4p.

The biggest risers on the FTSE 100 were Hargreaves Lansdown, up 65.6p at 951.4p, Endeavour Mining, up 69p at 1,757p, Rolls-Royce, up 3.24p at 86.24p, DS Smith, up 9.9p at 291.2p, and Abrdn, up 5.55p at 172.7p.

The biggest fallers on the index were RS Group, down 25p at 1,039p, AstraZeneca, down 152p at 10,714p, Avast, down 7.2p at 681p, Centrica, down 0.8p at 83p, and Pearson, down 6.4p at 880p.