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UK markets finish week with strong gains after US non-farm payrolls beat expectations

3rd Sep 2010, 6:44 pm
UK markets finish week with strong gains after US non-farm payrolls beat expectations

The FTSE 100, the index of the largest 100 companies listed on the London Stock Exchange by market capitalization, surged 1.3% after today’s US non-farm payrolls data beat expectations, showing a decline of only 54,000, while the unemployment rate rose to 9.6%.


The rally was broad based, with temporary power provider Aggreko (LON:AGK) leading the blue chips with a 6% gain. Banking group Barclays (LON:BARC) and copper miner Kazakhmys (LON:KAZ) advanced 4%. Defence and aerospace systems manufacturer BAE Systems (LON:BA), chipmaker ARM Holdings (LON:ARM) and software developer Autonomy Corp (LON:AU) tacked on just over 3%.


Oil and gas producer Tullow Oil (LON:TLW) was the heaviest faller in the index, and was the only stock to lose more than 1% on the day.


Commodities


Oil prices recovered in European trading after investors cheered today’s better than expected non-farm payrolls update. Data from the Labor Department revealed that payrolls decreased by 54,000, while the unemployment rate expectedly rose to 9.6%. Analysts expected to see a loss of more than 100,000 jobs.


In other news, Hurricane Earl was reported to have weakened, easing concerns that it could disrupt refineries and resulting decline in driving would lead to lower gasoline demand.


October Brent Crude rose to US$77.19/barrel, while US light, sweet crude for October delivery reached US$75/barrel.


Supermajors BP (LON:BP, NYSE:BP) and Shell (LON:RDSB, NYSE:RDSB) climbed 1.1% and 1.6%. BG Group (LON:BG) also added 1.1%.


Gold dipped below US$1,240/oz late in the day after the non-farm payrolls update came in better than expected, Silver declined to US$19.54/oz, while platinum rose to US$1,553/oz.


Most major mining stocks were on the rise today despite the pull back in precious metal prices. Platinum producer Lonmin (LON:LMI) and silver miner Fresnillo (LON:FRES) advanced 2.3%.

African Barrick Gold (LON:ABG) posted a small gain, but gold miner Randgold Resources (LON:RRS) went against the tide, sliding 1%. Specialty chemicals firm Johnson Matthey (LON:JMAT) added 1.45%.


Base metals climb to lift miners


Copper and nickel rose to US$3.50/lb and US$9.95/lb, while zinc climbed to US$0.975/lb.


Base metals focused mining companies were in demand today. Kazakhmys (LON:KAZ) and Xstrata (LON:XTA) were in the lead with gains of 4% and 3% respectively. Anglo American (LON:AAL), BHP Billiton (LON:BLT) and Rio Tinto (LON:RIO) climbed 2.5%.


The only London listed pure iron ore producer Ferrexpo (LON:FXPO) outperformed the sector, surging 5.2%.

Banks, insurance, private equity


Barclays (LON:BARC) led the banks with a 4% advance. Standard Chartered (LON:STAN) climbed 2.5%. HSBC (LON:HSBA), Lloyds (LON:LLOY) and Royal Bank of Scotland (LON:RBS) added 1.3%.


Old Mutual (LON:OML) emerged as the top performer among the insurers with a 3% gain. RSA Insurance Group (LON:RSA) added 1.5%, while Prudential (LON:PRU) and Standard Life (LON:SL) moved up 1%. 


Private equity group 3i (LON:III) climbed 1.25%.

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