It can be assumed that the US investors are now focused on the earnings reports. However, the global investors also cheered up after they took the hints that the Federal Reserve would be increasing the interest rates patiently and not in a haste as done earlier. In 2018, the US central raised the rates four times. The dovish comments from the US Federal Reserve were needed as the fears of the economic downturn have been increasing. The investors also need to focus on the scenario about the trade talks between the US and China as the settlement of the war might further boost the sentiments of the market players as well as might support the broader markets.
On 30th January 2019, the US Federal Reserve kept the base rate unchanged which made market participants across the globe a bit relaxed, and this helped in developing momentum that also found support from another positive news coming from the United States. On February 01, 2019, US reported healthy US job growth which is making market participants cheer up again. The employers added around 304000 positions (in terms of new jobs) in January. On the other hand, global bank, Goldman Sachs on Friday announced that it is withholding bonus worth approximately $7 million for former CEO Lloyd Blankfein unless Goldman Sach’s involvement into 1MDB scandal gets resolved.
Coming back to the European market, the broader index of the London Stock Exchange FTSE 100 closed the session at 7020.22, up 51.37 (0.74%) from its previous close. European equities benchmark STOXX closed Friday’s session at 359.71, up marginally.
On February 01, 2019, manufacturing index IHS Markit PMI for the UK fell to 52.8 in January from 54.2 in December, the lowest growth in the last three months and below the consensus estimate of 53.5. IHS market stated that there could be a risk of recession in the manufacturing sector.
Given the Brexit related uncertainty, around one-third of British companies could be compelled to shift their operations to another country in European bloc because of the UK's divorce from EU, as per few recent survey reports. On the other hand, there are few companies that are strategizing in a different direction altogether. For example, Glencore (GLEN.L), a global trader is about to close a deal worth $500 million with Brazil’s Companhia Siderugica Nacional (CSN) for delivery of iron ore for five years.
In the currency market, the GBP/USD currency pair was trading at 1.3091, and pound surged slightly against USD, and EUR/GBP pair was trading at 0.8752, down marginally.
International oil benchmarks Brent and WTI crude oil were trading at $62.84/barrel and $55.34/barrel respectively at the time of writing, and both were trading at higher from their previous close price. Later, both the benchmarks touched marginally lower.
On February 01, 2019, LSE stocks like Melrose Industries Plc (MRO.L), Coca Cola HBC AG (CCH.L) and CRH Plc (CRH.L) were among the top performers on the broader index FTSE 100 index and up by 3.7%, 3.01%, and 2.74%, respectively. On the other hand, stocks like Fresnillo Plc (FRES.L), GVC Holding Plc (GVC.L) and Glencore Plc (GLEN.L) were among the laggards on the FTSE 100 index and down by 3.4%, 1.12%, and 1.05%, respectively.
On sector specific, almost every sector on the broader index, FTSE 100 closed in green, and the only laggard that ended the session in red was Telecommunication services. Among the gainers, Basic Material, Industrials, and Consumer non-cyclicals were the top performers.