London close: FTSE 100 notches up new record high

(Sharecast News) - London's top-flight index carved out a new all-time high after it was reported that the US labor market created far more jobs at the start of 2023 than anyone had dared imagine. Indeed, at least one top-ranked economist in the City conceded he "struggled" to reconcile the data with multiple other recently released survey findings.

In any case, the FTSE 100 was up by 1.04% at 7,901.80, as cable slipped by 1.24% to 1.2074 in response to the latest data published in the US.

According to the US Department of Labor, non-farm payrolls surged by 517,000 in January, which was far above the 175,000 increase anticipated on Wall Street.

"This report points toward a rebound in Q1 2023 consumption and domestic demand and labor market resilience that reaffirms the need for further monetary policy restraint," said Mickey Levy at Berenberg Capital Markets.

"While unquestionably strong, we caution that employment is a coincident economic indicator. The economy is expected to soften in response to Fed rate increases, but the critical question is, by how much?"

On home shores, a survey out earlier showed that the service sector continued to struggle last month as weaker demand pushed output to a two-year low.

The latest S&P Global/CIPS UK services PMI business activity index came in at 48.7 for January, down from December's 49.9.

It is the fourth consecutive month the index has remained below the neutral 50.0 threshold. A reading below suggests contraction, while one above indicates growth.

It was, however, also ahead of both consensus and the first estimate, for 48.0, and optimism for the coming year rose as cost pressures eased.

On the corporate front, BT Group was in focus after Ofcom said it was minded to back the company's planned Openreach wholesale prices, arguing they were not anti-competitive.

The telecoms group informed the regulator in December of its proposed pricing for full-fibre services, known as the Equinox 2 offer. BT wants broadband providers to move from slower copper connections to ultrafast end-to-end fibre, and is offering discounts to encourage the switch.

Ofcom said that having reviewed the proposed offering, including taking into account the interests of customers as well as the impact on competitors and retail broadband providers, its provisional view was that it would not stop Openreach introducing Equinox 2.

Elsewhere, Shell was still a high riser, a day after posting record annual profits.

Retail stocks were on the move after Deutsche Bank put out a note on the sector. B&M European Value Retail was the standout gainer on the FTSE 100 throughout most of the session after DB upgraded the shares to 'buy' from 'hold'. Marks & Spencer rose on the back of the same upgrade.

On the downside, however, B&Q owner Kingfisher fell after after Deutsche cut its rating to 'hold' from 'buy'. It also applied the same rating downgrade to Pets at Home, Wickes and Asos.

DB noted that the European general retail sector ended 2022 on a "surprisingly good" note. "Whilst 2023 is unlikely to be a great year for consumers, the outlook is getting noticeably less chilly in our view," it said.

Also in broker note action, Direct Line was cut to 'underweight' at Barclays, while IWG was downgraded to 'equalweight'.

Standard Chartered was upgraded to 'buy' at Investec, while Provident Financial was cut to 'hold' at Peel Hunt.

Market Movers

FTSE 100 (UKX) 7,901.80 1.04% FTSE 250 (MCX) 20,593.46 -0.10% techMARK (TASX) 4,547.48 0.42%

FTSE 100 - Risers

Haleon (HLN) 329.50p 3.47% B&M European Value Retail S.A. (DI) (BME) 493.50p 3.44% Smith & Nephew (SN.) 1,188.00p 3.35% Shell (SHEL) 2,414.00p 3.27% Reckitt Benckiser Group (RKT) 5,806.00p 3.20% JD Sports Fashion (JD.) 186.65p 2.84% Compass Group (CPG) 1,926.00p 2.15% Airtel Africa (AAF) 113.40p 1.98% BAE Systems (BA.) 845.20p 1.83% London Stock Exchange Group (LSEG) 7,644.00p 1.78%

FTSE 100 - Fallers

Vodafone Group (VOD) 91.14p -3.90% SEGRO (SGRO) 885.00p -3.83% Centrica (CNA) 95.26p -2.97% Persimmon (PSN) 1,487.50p -2.84% Barratt Developments (BDEV) 472.70p -2.35% Taylor Wimpey (TW.) 124.10p -1.90% Berkeley Group Holdings (The) (BKG) 4,363.00p -1.78% Unite Group (UTG) 1,036.00p -1.61% Kingfisher (KGF) 286.80p -1.61% NATWEST GROUP (NWG) 306.20p -1.19%

FTSE 250 - Risers

Darktrace (DARK) 243.10p 6.02% IP Group (IPO) 66.75p 4.46% NCC Group (NCC) 183.60p 4.20% Virgin Money UK (VMUK) 194.55p 3.54% Bank of Georgia Group (BGEO) 2,750.00p 3.00% TBC Bank Group (TBCG) 2,485.00p 2.90% Hill and Smith (HILS) 1,358.00p 2.84% Tullow Oil (TLW) 35.58p 2.60% Diploma (DPLM) 2,970.00p 2.34% Ferrexpo (FXPO) 160.20p 2.17%

FTSE 250 - Fallers

Urban Logistics Reit (SHED) 146.50p -4.56% Drax Group (DRX) 629.50p -4.40% Centamin (DI) (CEY) 104.45p -4.09% Baltic Classifieds Group (BCG) 144.60p -3.60% Tritax Big Box Reit (BBOX) 162.40p -3.51% Crest Nicholson Holdings (CRST) 241.40p -3.44% CLS Holdings (CLI) 158.40p -3.30% Tritax Eurobox (GBP) (EBOX) 69.10p -3.22% Hochschild Mining (HOC) 65.05p -3.13% Quilter (QLT) 98.78p -3.11%