Late uptick drags FTSE 100 into positive territory
The FTSE 100 fought back on Friday and managed to drag itself back into positive territory for the week despite the initial weak September start
The FTSE 100 index closed 55.0 points higher, a rise of 1.2% to 4,851.7, while the FTSE 250 index added 141.1 points or 1.6% to settle at 8,745.9.
The US economy lost 216,000 jobs in the month of August, a smaller number than the revised 276,000 in July and also smaller than the market had been expecting. Also encouraging was the hourly earnings figure, which increased 0.3% to while the average working week remained at just over 33 hours. Headline unemployment, however, hit a 26-year-high, coming in at a higher-than-forecast 9.7% compared to the previous month’s 9.4%.
Shocking though this figure is, the significant drop in job cuts last month was hailed as a clear sign that the US labour market is finally showing signs of improvement and as such morning gains on the UK and European stock markets were sustained in afternoon deals, enabling the FTSE 100 index to remain just north of breakeven for the week as a whole. Meanwhile, the FTSE 250 index’s cumulative gain over the past five days amounted to 0.8% by close of play Friday.
Miners and financials were largely responsible for these increases, with blue metal extractors Lonmin, Eurasian Natural Resources, Kazakhmys and Fresnillo featuring on the FTSE 100 leaderboard, rising 3.1%-9.4% each.
Miners weren’t the only commodity plays in demand: oil & gas producers shrugged off marginally weaker fuel prices to help push the UK benchmark index higher. Tullow Oil, Cairn Energy and BG Group climbed up between 0.6% and 2.9%. Index heavyweight Royal Dutch Shell failed to join in the energy sector rally, however. The Anglo-Dutch firm slipped 0.7% lower in UK deals after ratings agency Standard & Poor’s cut its long-term rating on the group to AA from AA+ late Thursday.
Energy stocks aside, insurers Legal & General, Aviva and Prudential added 4.2%, 4.0% and 3.9%, respectively, as investors’ risk appetite returned, and it was a similar story for the UK banks: HSBC, Lloyds Banking Group, Royal Bank of Scotland, Standard Chartered and Barclays all climbed up to 2.2% higher.
Of the mere 12 FTSE 100 members that fell into the red on Friday, most were defensive plays, including pharma giant AstraZeneca, food and household products manufacturer Unilever and tobacco firm Imperial—each lost between 0.4% and 0.6%. Supermarkets group Wm Morrison was also out of favour, down 0.7%, following analyst-fuelled gains earlier in the week.
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