Traders buoyed by US jobs data despite fears of interest rate rises

A tug of war ensued between buyers and sellers on Monday as traders were unable to decide how to react to strong jobs data from the US on Friday.

Buyers appeared keen on the idea that a higher-than-expected jump in jobs Stateside was a sign that the world’s biggest economy is recovering faster than hoped.

But sellers were concerned that it could prompt the US Federal Reserve to raise interest rates even higher to combat inflation.

The FTSE 100 got caught up in the excitement, dipping in early trading, before climbing strongly, then easing off as markets closed.

It closed the day up 57.07 points, or 0.76%, at 7573.47.

Chris Beauchamp, chief market analyst at online trading platform IG, said: “After an indecisive morning that appeared to be swinging the bears’ way, markets have perked up as the afternoon has gone on.

“But both short-term traders and longer-term investors remain nervy, unsure as to which view will prevail – either this market will take the hint from Friday’s headline payrolls report and go with the view that fresh economic growth will help to keep stocks attractive, or the prospect of rate hikes and a withdrawal of stimulus, along with still-strong inflation, will hurt growth and put more pressure on equities.”

The French Cac closed up 0.83% and the German Dax closed up 0.71%.

The pound remained flat against the dollar at 1.343 and dipped 0.1% against the euro at 1.44.

In company news, it was another typically quiet Monday, with few companies reporting.

Pets at Home had the biggest news of the day, unveiling its new chief executive to replace Peter Pritchard, who is retiring after 11 years with the retailer.

He will be replaced with Lyssa McGowan, who has spent the previous 11 years at Sky UK, most recently as chief consumer officer. Shares closed up 0.4p at 408p.

Another boardroom change saw housebuilder Taylor Wimpey unveil Jennie Daly as its new chief executive.

The current group operations director replaces Peter Redfern, who quit after 15 years following pressure from shareholders over the company’s direction. Shares closed up 0.75p at 150.1p.

Flutter enjoyed a strong boost to its share price, closing up 4%, or 425p at 11,005p, following reports over the weekend that the Paddy Power owner was eyeing up a bid for the National Lottery licence.

Rival Entain, which owns Ladbrokes and Coral, also had news of its own that is snapped up Avid Gaming for 300 million Canadian dollars (£175 million).

Shareholders reacted positively, with shares closing up 33p at 1,605.5p.

Wizz Air saw one of its shareholders pile out of the airline over concerns about alleged human and labour rights abuses.

AkademikerPension, a Danish pension fund, said it would sell all of its £2.5 million of shares in the Hungarian airline, listing a series of anti-union behaviour.

Remaining shareholders seems unperturbed, with shares closing up 77p at 4,206p.

The biggest risers on the FTSE 100 were Flutter Entertainment, up 425p to 11,005p, IAG, up 6.02p to 161.1p, Melrose Industries, up 4.65p to 152.8p, Rio Tinto, up 149p to 5,516p, and Standard Chartered, up 13.4p to 336.6p.

The biggest fallers on the FTSE 100 were Evraz, down 33p to 455p, United Utilities, down 50p to 1,197p, B&M, down 13p to 542.2p, Spirax-Sarco, down 290p to 12,755p, and Sainsbury’s, down 6p to 281.8p.