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European stocks markets end mixed as pound rises

Stocks. A noticeably quiet Whitehall during the evening rush hour on March 12, 2020 in London, England. The FTSE 100 Index fell 5054 per cent when trading opened in London this morning. It is at the lowest since 2012 and is, in part, a response to Donald Trump's ban on people traveling to the United States from the European Union which he announced overnight. (Photo by Dan Kitwood/Getty Images)
European stock markets were mixed on Thursday amid a string of trading updates and a UK jobs report. Photo: Dan Kitwood/Getty Images

European stock markets were mixed on Thursday amid a string of trading updates and a UK jobs report.

In London, the FTSE 100 (^FTSE) was 0.1% higher at the end of the day after a rollercoaster session, marginally adding to its two-year high on the day before despite a stronger pound. The CAC (^FCHI) tumbled 0.7% in Paris and the Frankfurt DAX (^GDAXI) was flat.

It came as the pound climbed to its highest level against the dollar (GBPUSD=X) in two and a half months, amid dollar weakness and the possibility that Boris Johnson will step down as prime minister.

It gained as much as 0.3% on Thursday to reach $1.3747, its highest since last October. Against the euro (GBPEUR=X), sterling was trading flat on the day.

The currency move comes as traders are weighing up potential resignation from the PM over attendance at a party at Downing Street during the coronavirus national lockdown.

He is facing calls to step down among his opponents and within his own Conservative party for breaking government rules to curb the spread of COVID-19.

Victoria Scholar, head of investment at Interactive Investor, said: “The FTSE 100 is still managing to hold above critical support at 7,500 after closing at the highest level since January 2020 while the pound is extending recent gains, closing in on key resistance at $1.38."

The pound has been climbing over the past week. Chart: Yahoo Finance
The pound has been climbing over the past week. Chart: Yahoo Finance

“A slew of trading statements from Tesco (TSCO.L), M&S (MKS.L), Persimmon (PSN.L) and ASOS (ASC.L) are spurring UK price action on Thursday while attention soon shifts to US earnings season which kicks off with the banks tomorrow.”

It came as UK recruitment activity continued to rise sharply in December, according to the latest jobs survey from KPMG and the Recruitment and Employment Confederation (REC).

Permanent staff appointments and temp billings continued to rise during the period, while vacancy growth softened slightly again, easing to an eight-month low.

However, competition for scarce workers pushed up rates of starting pay for both permanent and temporary staff again, with the respective rates of inflation among the quickest on record.

Read more: UK recruiters see slower jobs growth as Omicron virus hits

Across the pond, the S&P 500 (^GSPC) was trading flat% and the tech-heavy Nasdaq (^IXIC) fell 0.4% amid a small sell-off in the sector. The Dow Jones (^DJI) edged 0.6% higher at the time of the European close.

It came as average long-term US mortgage rates jump to their highest level since March 2020, as lenders anticipate faster than expected tightening of monetary policy to combat US inflation.

Separately on Thursday the number of Americans filing new claims for unemployment benefit rose last week to the highest level since mid-November.

According to the latest figures from the US labour department there were 230,000 new initial claims for jobless support in the week to 8 January, an increase of 23,000 from the previous week, on a seasonally adjusted basis.

Economists surveyed by FactSet were expecting claims to clock in at 205,000.

Without seasonal adjustments, the actual number of initial claims rose by 103,693 to 419,446.

On Wednesday US inflation hit 7%, its highest level since 1982, and the seventh consecutive month in which it topped 5%.

Watch: What is inflation and why is it important?

Price increases in housing and used cars and trucks were the largest contributors to the inflation rate, with 0.4% and 3.5% increases in price compared with November, respectively.

Asian markets were mixed on Thursday as traders fought to maintain the previous day's upward momentum.

In Japan, the Nikkei (^N225) fell 1% as a stronger yen weighed on exporters, while the Hang Seng (^HSI) rose 0.1% and the Shanghai Composite (000001.SS) dipped 1.2%.

Stocks in Sydney, Taipei and Manila also rose, while Singapore and Wellington ended flat.

Watch: What are SPACs?