Investment market update
UK stocks are expected to open mixed this morning, ahead of the release of a key jobs report in the US that could provide clues on the Federal Reserve’s monetary policy outlook.
Asian stocks were in mixed territory overnight, after Japanese shares declined as the strengthening yen pressured major exporters.
US stocks rose for a second day amid a rally in raw-material and industrial shares, as dollar weakness boosted commodity prices and optimism for profits at multinational companies. Among the S&P 500’s 10 main industries, raw-material and industrial companies increased at least 1.7%, while financial shares added 0.9% as banks gained.
UK stocks rose sharply on Thursday, with mining stocks leading the rally. By the close, the benchmark FTSE 100 index was up by 1.06% at 5,898.76. Anglo American was the biggest riser on the FTSE 100, gaining nearly 20%, while BHP Billiton added 10.8%. Royal Dutch Shell was up 6.7%, despite announcing its steepest fall in annual profits for 13 years and confirming 10,000 job cuts.
Bank of England Deputy Governor Ben Broadbent said there are some signs that low inflation is having an impact on wage growth and that policy makers are in no hurry to increase interest rates. Speaking on BBC Radio on Friday, Broadbent said there is “no urgency” to raise the benchmark rate from a record-low 0.5%, where it’s been for almost seven years.
The dollar is headed for its worst week since 2009 as traders boosted bets the Federal Reserve will keep interest rates on hold this year. Demand for government debt sent Japan’s 10-year bond yields to a record low.
House price growth in the UK increased to 9.7% in the year to January, up from 9.5% a month earlier, according to the Halifax. Britain’s largest mortgage lender said the last time that figure was greater was in July 2014, when prices were rising by more than 10%. Prices increased by 1.7% between December and January. The Halifax said that the average cost of a house or flat in the UK had now risen to £212,430.