A disappointing US jobs report and comments from Vladimir Putin sparked a choppy end to trade on Friday, resulting in meagre gains on the FTSE 100 as risk appetite was scaled back before the weekend.
The FTSE 100 ended the day up just 14.89 points at 6,547.33, a rise of 0.23%. Still, this was the highest close for London's benchmark index since August 14th.
After a subdued start, markets rallied strongly after a worse-than-expected gain in American jobs, given increased hopes that the Federal Reserve will delay a potential tapering of monetary stimulus until later this year. Just 169,000 non-farm payrolls were added in August, less than estimates, while figures for July were revised lower. Yet the unemployment rate unexpectedly fell from 7.4% to 7.3% in August, the lowest since December 2008.
"Our best guess is that the cumulative evidence of improvement over the past year will convince a majority of officials that the tapering should begin at the next FOMC meeting in another couple of weeks' time, but we're not going to pretend this is a certainty," said Chief US Economist Paul Ashworth from Capital Economics.
Following a brief stint in positive territory, stocks sank sharply into the red after Putin said Russia would "assist" Syria if the US attacked, escalating tensions between President Barack Obama and his Russian counterpart as they meet along with other world leaders at the G20 Summit in St Petersburg.
Obama is currently trying to rally for support for the military intervention in Syria following the alleged use of chemical weapons by Bashar Al-Assad's regime. US Congress is reportedly due to vote on whether or not to attack next week.
"Before the G20 summit, President Obama had just the one country to deal with, but Vladimir Putin has now snookered him by giving his support for the Assad government should a military invasion occur," said Market Analyst David Madden from IG.
"The US is keen to bring stability to the region, but now Washington will have to smooth things over with Moscow before stepping foot on Syrian soil, and this adds even more uncertainty to the situation," he said.
FTSE 100: Tullow jumps after Norway discovery
Tullow Oil rose strongly after revealing that the Wisting Central exploration well has made the first-ever oil discovery in the 20%-owned Hoop-Maud Basin in the Barents Sea offshore Norway. The oil and gas explorer said the well, which was drilled to a total depth of 905m and a water depth of 373m, had discovered 50m to 60m of net light oil pay in good quality relatively shallow middle to lower Jurassic reservoir rocks.
Shares in Chile-based copper miner Antofagasta were making gains after analysts at Canaccord Genuity raised their outlook for free cash flow and highlighted the prospect of a special dividend in the next few years.
Airline group easyJet was continuing to recover after heavy falls on Wednesday following a profit warning from sector peer Ryanair. Improved traffic statistics for FTSE 100-listed easyJet yesterday helped the share price to rebound.
Accountancy software group Sage was a heavy faller today after Morgan Stanley downgraded its rating on the stock to 'underweight'.
Engineering and project management company AMEC declined despite scoring a contract with TAQA for work on the Tern oil production platform in the North Sea.
FTSE 100 - Risers
Tullow Oil (TLW) 1,070.00p +3.58%
Meggitt (MGGT) 545.00p +2.25%
Antofagasta (ANTO) 899.00p +2.04%
Burberry Group (BRBY) 1,600.00p +1.91%
Aberdeen Asset Management (ADN) 370.60p +1.56%
easyJet (EZJ) 1,255.00p +1.54%
SABMiller (SAB) 3,103.00p +1.39%
Sainsbury (J) (SBRY) 393.50p +1.31%
G4S (GFS) 257.70p +1.30%
Imperial Tobacco Group (IMT) 2,261.00p +1.21%
FTSE 100 - Fallers
Sage Group (SGE) 345.80p -1.79%
Fresnillo (FRES) 1,264.00p -1.33%
Randgold Resources Ltd. (RRS) 4,989.00p -1.31%
AstraZeneca (AZN) 3,117.50p -0.83%
Aviva (AV.) 391.00p -0.79%
Legal & General Group (LGEN) 190.70p -0.73%
Standard Life (SL.) 338.00p -0.68%
Eurasian Natural Resources Corp. (ENRC) 226.10p -0.66%
Amec (AMEC) 1,050.00p -0.66%
Petrofac Ltd. (PFC) 1,416.00p -0.63%
FTSE 250 - Risers
Thomas Cook Group (TCG) 147.40p +6.27%
Imagination Technologies Group (IMG) 293.50p +5.08%
Homeserve (HSV) 258.90p +4.48%
ITE Group (ITE) 297.40p +4.31%
Berendsen (BRSN) 933.50p +4.01%
Brown (N.) Group (BWNG) 570.00p +3.54%
Ferrexpo (FXPO) 177.00p +3.27%
Petra Diamonds Ltd.(DI) (PDL) 127.30p +3.08%
Perform Group (PER) 505.00p +3.04%
Polymetal International (POLY) 769.00p +3.01%
FTSE 250 - Fallers
International Public Partnerships Ltd. (INPP) 124.50p -3.19%
Computacenter (CCC) 523.50p -2.70%
NMC Health (NMC) 314.90p -2.51%
Supergroup (SGP) 1,197.00p -2.44%
John Laing Infrastructure Fund Ltd (JLIF) 113.00p -2.42%
3i Infrastructure (3IN) 131.80p -2.30%
BTG (BTG) 376.80p -2.08%
Bovis Homes Group (BVS) 755.00p -1.95%
National Express Group (NEX) 268.40p -1.94%
Centamin (DI) (CEY) 46.10p -1.91%