- Mixed US employment data
- Barclays: Fed could refrain from tapering in March
- Persimmon and LSE shares
- NIESR: MPC will not raise rates until quarter two of 2015
techMARK 2,790.30 +0.40%
FTSE 100 6,571.68 +0.20%
FTSE 250 15,865.12 +0.48%
The FTSE 100 managed to end the day in the blue as investors chose to interpret the latest US employment report in the most favourable light possible, although some economists referred to the possibility that the Fed might yet refrain from tapering at their March meeting.
US non-farm payrolls expanded by 113,000 in January coming in moderately below the 180,000 forecast by economists, after a very weak reading of just 75,000 in the month before. That led to an initial slide in stocks.
However, the unemployment rate 'ticked' lower, to hit 6.6%, as the labour force participation rate unexpectedly rose - which was welcome news for many observers.
By the end of trading the FTSE 100 had risen just 0.2% to 6,572, to stand 13 points above where it started the day.
Fed might yet refrain from tapering in March
In the opinion of Barclays Research the US non farm payrolls report continued to indicate that moderate job growth remained "in place", which would keep the unemployment rate heading lower and the Fed on track for further 'tapering' at each of its meetings until September.
Nevertheless, they also indicated that "[the mixed data] does increase the likelihood that [the Fed] will refrain from tapering in March, and we will look closely at the February employment report for further signs that labor market improvement is slowing."
Acting as a backdrop, perhaps, Ralph Atkins wrote in Friday´s Financial Times on how market strategists seemed at a bit of a loss to explain the reasons for the recent losses in financial markets. Had the turmoil in emerging markets acted as a 'trigger' or had the recent spate of weak US data cast doubt on the strenth of the recovery? So even professional market watchers were at a bit of a loss in the current context.
As if the above were not enough, for others it was China and its shadow banking system which markets were now watching most, Atkins added.
Lastly, in a new research report issued late in the afternoon the NIESR stuck to its forecasts that the MPC would wait until the second quarter of 2015 before raising its main interest rate.
Tate & Lyle jumps after upgrade, Shire falls
Sugar and sweeteners firm Tate & Lyle was among the best performers throughout a large part of the day after JPMorgan Cazenove lifted its rating on the stock from 'underweight' to 'overweight'. The bank said that group earnings have been held back recently by investment in the speciality food ingredients division "but we believe this is now bearing fruit".
Housebuilder Persimmon was the top riser of the FTSE 100 a day after a report from Halifax, yesterday, showed house prices rose by more than expected in January. On Friday the stock managed to break above its most recent highs.
Shares of the London Stock Exchange Group continued to power ahead after announcing China-based firm GF Financial Markets (UK) Ltd has joined its equity and derivatives markets.
Heading the other way was Shire after saying it will no longer pursue the development of Vyvanse as a treatment for major depressive disorder as a clinical trial of the drug failed to meet objectives.
Oil and gas producers Tullow, BP Shell were trading lower as crude prices declined. Tullow was a heavy faller as recent bid speculation - which pushed the stock up sharply earlier in the week - began to fade. The decline in natural gas futures, as a result of forecasts for warmer temperatures Stateside, weighed on BG Group´s battered share price.