Thursday's rally turns to Friday's fall
Following the previous session's celebration of the G20 outcome, markets felt the pressure today, although London's leading indices still closed up on the week
The FTSE’s blue-chip index may have undergone a sharp readjustment following the announcement of a new record-high unemployment rate in the US and with profit takers moving in, but it still managed to end the week up 3.5%.
The FTSE 100 index closed down 95.3 points or 2.3% at 4,029.7—sticking above the all-important 4,000 mark, while the FTSE 250 index, which is often seen as a more accurate representation of the British economy, added 1.6% or 110.1 points to settle at 6,926.2.
Over in the US, Wall Street was struggling to find its direction at the time of the UK close, with the Dow Jones Industrial Average in the red, but the NASDAQ Composite and the S&P 500 index both managing marginal gains.
The main weight on US trading was the country’s jobs data, which revealed the rate of unemployment rose to a new record high in March—to 8.5% from 8.1% in the previous month as another 663,000 workers lost their jobs last month. This is now the highest US unemployment rate in over 25 years.
Looking to individual equity movements, commodity plays were under pressure Friday, having enjoyed a bumper session the previous day, as concerns over demand came to the fore once again. Sliding oil and precious metals prices dragged oil & gas producers BP, Royal Dutch Shell and BG Group down between 2% and 4%, while mining groups Randgold Resources, Eurasian Natural Resources and Xstrata each lost between 5% and 6%.
On the flipside, banks remained in demand, with Royal Bank of Scotland leading the risers, up 8.5% at 30.6p, following its AGM earlier today, at which the part-nationalised bank unveiled cost-cutting measures and said it aimed to return to paying dividends as soon as is feasible.
Lloyds Banking Group also added 3.5% to 79.2p, while Barclays ticked up 1.2% to 170.4p. HSBC bucked the trend, however, dropping 5.3% to 434.5p as it closed its rights issue. The issue is believed to have captured a 90% take-up rate, but the remaining 10% is likely to be placed on the market this coming Monday, investors suspected.
Insurers also traded mixed, with Aviva gaining 4.6% to 251.5p while Friends Provident slipped 3.1% to 72.2p. Similarly, stocks normally considered for their defensive qualities closed on both sides of breakeven, with food retailers Tesco and Morrison down 4.6% to 332.6p and 4.7% to 259.25p, respectively, while utility providers Pennon and Severn Trent added a respective 2.2% to 412.75p and 1.3% to a neat 1,000p.
Finally, Thomas Cook Group jumped 8.4% to close at 265.75p, thanks to a Citigroup upgrade of the European travel and leisure sectors to Overweight. British Airways took on 6.0% to 165.1p despite reporting weak passenger figures and lowing revenue guidance.
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