LONDON (SHARECAST) - - US data spreads some cheer
techMARK 2,161.02 +0.47%
FTSE 100 5,871.02 +0.74%
FTSE 250 12,061.35 +0.89%
- Mining stocks gain though Anglo bucks the trend
- Tesco continues to fall after interim results
The FTSE 100 index finished the day with decent gains on Friday as some better-than-expected employment figures from the US lifted sentiment late on.
“A firmer but fairly lacklustre morning in Europe was given fresh impetus this afternoon after the US September employment report, saw the unemployment rate slide under eight per cent for the first time since Obama became President,” said market analyst Michael Hewson from CMC Markets.
US non-farm payrolls increased by 114,000 in September, ahead of the previous gain of 96,000 and the 111,000 rise expected by analysts. The unemployment dropped to 7.8% from 8.1% due to a rise of 873,000 in the number of employed.
Analyst Michael Gapen from Barclays Research said that the better-than-expected report is unlikely to alter the Federal Reserve’s plans for more quantitative easing (QE): “We think the unemployment rate would need to decline further from here in the October and November reports before the Fed would think about not fully converting its Treasury purchases under Operation Twist to open-ended purchases,” he said.
According to German paper Handelsblatt, the International Monetary Fund (IMF) will reduce its global gross domestic product (GPD) growth forecast to 3.3% this year, down from the prior 3.4% estimate. In 2013, growth will accelerate to 3.6%, though still below the prior expectation of a 3.9% rise.
Meanwhile, Greek Prime Minister Antonis Samaras has signalled that his country could not survive beyond November if it isn’t granted the next tranche of bailout aid.
Spanish Minister of Economy Luis de Guindos has insisted that his country doesn’t need to be bailed out at all as he defended Spain’s progress on deficit reduction.
FTSE 100: Risk appetite benefits the miners
Mining stocks were among the highest risers after the US employment report from the States improved the demand outlook for commodities. ENRC, Kazakhmys, Evraz and Vedanta were the top three performers by the close. Vedanta was making gains even though its confirmed this afternoon that the mining ban in Goa was still ongoing.
In contrast, Anglo American sank into the red this afternoon after its 80%-owned platinum operation, Amplats, was forced to sack around 12,000 striking employees from its Rustenberg project in South Africa. Amplats has lost platinum production of 39,000 ounces since the industrial action began three weeks ago, which will result in around 700m South African rand (nearly £50m) of lost revenue.
Luxury brand Burberry rose after Morgan Stanley upgraded the stock to 'overweight' this morning. Engineering group IMI was a high riser after Morgan Stanley and JPMorgan Cazenove both reiterated their 'overweight' ratings on the shares.
Oilfield services firm Wood Group was in demand after saying that it is still confident in hitting full-year profit targets, with conditions in energy markets remaining favourable. "We anticipate strong operating cash flow in the second half, and our strong balance sheet provides a robust platform for growth," the group's interim management statement said.
Technology firm Smiths Group was higher after saying that it will launch a $400m bond offering, saying that the funds will be used for general corporate funding purposes and to repay certain existing debt.
Supermarket group Tesco continued to fall, extending losses after its profits disappointed the markets on Wednesday. Shares are now down over 5% on the week. Both Seymour Pierce and Espirito Santo reduced their target prices for the stock this morning.
FTSE 250: KCOM drops 6.6% after downbeat trading update
Broadband and communications provider KCOM has fallen following a downbeat trading statement prior to its interims. It announced that it is trading “in line with expectations”, but orders in its enterprise division have been below expectations.
Hunting was on the rise after Deutsche Bank initiated its coverage with a ‘buy’ rating, while Man Group was on the up following a ‘buy’ reiteration from Singer Capital Markets.
Utilities services provider Telecom Plus also gained after dangling the prospect of a sharply increased interim dividend in front of shareholders' eyes after a first-half surge in profits. With the group's business proving to be less seasonal these days the group is moving towards a more even split between its interim and final dividend payments each year.
FTSE 100 - Risers
Eurasian Natural Resources Corp. (ENRC) 333.30p +5.91%
Kazakhmys (KAZ) 738.00p +4.46%
Evraz (EVR) 254.10p +3.67%
Rexam (REX) 456.50p +3.63%
Vedanta Resources (VED) 1,101.00p +3.38%
CRH (CRH) 1,210.00p +2.98%
Weir Group (WEIR) 1,852.00p +2.89%
Burberry Group (BRBY) 1,028.00p +2.80%
Wood Group (John) (WG.) 833.50p +2.77%
Hargreaves Lansdown (HL.) 666.00p +2.54%
FTSE 100 - Fallers
Old Mutual (OML) 172.40p -2.65%
BAE Systems (BA.) 328.10p -1.59%
Johnson Matthey (JMAT) 2,339.00p -1.27%
BG Group (BG.) 1,300.50p -1.10%
United Utilities Group (UU.) 728.50p -1.02%
Tesco (TSCO) 315.35p -0.88%
Morrison (Wm) Supermarkets (MRW) 278.20p -0.78%
Next (NXT) 3,564.00p -0.78%
Wolseley (WOS) 2,702.00p -0.77%
Smith & Nephew (SN.) 680.00p -0.73%
FTSE 250 - Risers
Homeserve (HSV) 229.40p +6.45%
Bumi (BUMI) 170.80p +6.09%
Perform Group (PER) 428.60p +5.85%
IP Group (IPO) 124.80p +5.32%
Man Group (EMG) 90.00p +5.26%
Essar Energy (ESSR) 124.00p +5.08%
Ferrexpo (FXPO) 207.10p +4.54%
Ocado Group (OCDO) 68.70p +4.49%
JD Sports Fashion (JD.) 760.00p +4.32%
Talvivaara Mining Company (TALV) 160.80p +4.15%
FTSE 250 - Fallers
KCOM Group (KCOM) 78.75p -6.64%
Atkins (WS) (ATK) 695.00p -4.66%
FirstGroup (FGP) 196.10p -2.24%
Investec (INVP) 383.70p -1.31%
Rank Group (RNK) 149.50p -1.25%
New World Resources A Shares (NWR) 272.60p -1.23%
Pace (PIC) 169.70p -1.22%
Telecity Group (TCY) 939.00p -1.16%
Berendsen (BRSN) 571.00p -1.04%
BTG (BTG) 369.20p -0.99%