Britain's FTSE hits one-week high as US jobs report calms nerves

MILAN/LONDON (Reuters) - UK shares ended Friday at a one-week high, joining in a broader equity rally following supportive U.S. jobs data which calmed investor nerves over tighter monetary policy.

FILE PHOTO - Traders look at financial information on computer screens on the IG Index trading floor in London, Britain February 6, 2018. REUTERS/Simon Dawson

The country's blue chip FTSE .FTSE benchmark index ended the session 0.3 percent higher at 7,224.51 points, while mid-caps gained 0.6 percent as investors digested a number of earnings updates.

U.S. job growth recorded its biggest increase in more than 1-1/2 years in February, but a slowdown in wage gains pointed to only a gradual increase in inflation this year, which dampened the possibility of the Federal Reserve increasing rates faster.

“Overall the February jobs report is the best of both worlds - strong job growth without accelerating wage inflation. It’s not too hot, not too cold, a Goldilocks report,” Alec Young, managing director of global markets research at FTSE Russell, said.

While higher interest rates are a positive for banks, they can make equities as an asset class broadly less attractive as bond yields rise.

Other supportive developments included U.S. President Donald Trump’s comments on possible exemptions from import tariffs on steel and aluminium, and that he was prepared to meet North Korea’s Kim Jong Un.

Among individual movers, the biggest FTSE gainer was NMC Health NMC.L, which briefly touched a record high following a well-received trading update.

The UAE healthcare provider reported a 38.2 percent rise in annual net profit on Wednesday and said acquisitions this year could top the $641 million it spent in 2017.

On the midcap index, Renewi RWI.L fell 4.3 percent after the waste-to-product company said it would take an impairment charge following the review of contracts in its UK municipal division.

Inmarsat ISA.L dropped 6.7 percent after a quarterly update which was in line with expectations. Morgan Stanley analysts said comments around its government business were cautious, indicating that consensus expectations for 2019 revenue growth of 5 percent were too high.

GVC Holdings GVC.L rose 5 percent after the online gambling firm saw full-year net gaming revenue rise 17 percent in 2017, helped by gains from the businesses it bought three years ago. GVC is set to take over Britain's largest bookmaker Ladbrokes Coral LCL.L.

Reporting by Danilo Masoni and Kit Rees; Editing by Keith Weir