FTSE 100 index hits three-year highs as mining, energy stocks rise

FTSE 100 Index: Britain's FTSE 100 index hit a more than three-year high on Friday, boosted by miners and energy stocks, while slower-than-expected U.S. jobs growth fuelled hopes that the world's largest economy may be less aggressive in raising interest rates.

The export-oriented FTSE 100 (.FTSE) closed up 0.9%, while the domestically focused FTSE 250 (.FTMC) ended 0.2% higher by 1645 GMT.

Precious (.FTNMX551030) and base metal miners (.FTNMX551020) and energy firms (.FTNMX601010) rose between 1.5% and 3.4%, tracking upbeat copper, gold and crude prices.

Meanwhile global markets were firmer after wage inflation showed signs of cooling in the world's largest economy, raising hopes that the Federal Reserve would not keep rates higher, thereby avoiding a deep recession. Data released early on Friday showed the U.S. economy added jobs at a solid clip in December.

"The resilience of the numbers helps to reinforce optimism that the U.S. economy will avoid a hard landing type of recession over the next few months. This is being reflected in the performance of the FTSE 100 which is once again performing well," said Michael Hewson, chief market analyst at CMC Markets.

Rising interest rates globally weighed on risk sentiment last year as investors worried about a consequent recession. However the FTSE 100 outperformed major global peers, helped by gains in commodity-linked stocks.

Back home construction activity fell last month at its sharpest rate since May 2020, a survey showed, as new orders dried up in the face of rising interest rates and broader cost pressures.

Also data from mortgage lender Halifax showed British house prices slid again in December, but the construction sector (.FTNMX501010) was up on broader market sentiment.

Among stocks, Clarkson (CKN.L) jumped 5.1% after the shipping company said it expects 2022 profits to be ahead of market expectations.

Oil heavyweight Shell Plc (SHEL.L) rose 1.7% after it said earnings from its liquefied natural gas trading operations are likely to have been significantly higher in the fourth quarter of last year.