FTSE turns after disappointing US jobs figures

Job creation reached just a third of what had been expected in the US last month.

The US economy added fewer jobs than expected last month (David Davies/PA) (PA Wire)

Underwhelming jobs figures from the US cut the spring from the step of London’s traders on Friday.

The FTSE 100 had been riding on a small, but stable, 0.2% high earlier in the day, but it went off a cliff shortly after the Bureau of Labour Statistics released its non-farm payroll data.

The monthly report showed that there were 235,000 jobs added in August, down from 1.1 million in July and well below the 733,000 that economists had expected.

The news pushed the FTSE down heavily on Friday. It ended 25.55 lower at 7,138.35, a drop of 0.4%.

The disappointment over the jobs number has weighed on stock markets in the afternoon session, with European markets sliding back, having spent most of the day in positive territory

CMC Markets analyst Michael Hewson

“The disappointment over the jobs number has weighed on stock markets in the afternoon session, with European markets sliding back, having spent most of the day in positive territory,” said CMC Markets analyst Michael Hewson.

“The initial impulse was for stocks to push higher, however a turnaround in yields appears to have reversed this, after another big jump in the wages data which jumped sharply to 4.3% from 4.1%.

“While this rise needs to be treated with some scepticism given that a decline in hospitality jobs may well have pushed this number higher, it nonetheless speaks to a great deal of uncertainty about the health of the US labour market.”

The FTSE 100, and its smaller sister the FTSE 250 were dragged down by their travel stocks.

In the larger index British Airways owner IAG Holiday Inn owner IHG and airplane engine maker Rolls-Royce were all among the worst performers.

In the FTSE 250 National Express, cruise operator Carnival and holiday firm Tui all fell heavily.

When markets closed in Europe New York’s Dow index was 0.2% in the red while the S&P was trading 0.1% down.

The Dax in Germany closed down 0.4%, while Paris’s Cac 40 index lost 1.1%.

London-listed Berkeley Group said on Friday that it is on track to meet this year’s profit guidance, which will see it equalling or outperforming last year’s £518 million pre-tax profit.

But shares closed down 0.3%.

Sanne’s shares dipped by 2.2% after potential bidder Cinven pulled out of the battle with Apex Group to buy the UK asset manager.

The biggest risers on the FTSE 100 were Fresnillo, up 29.2p to 862.4p, Melrose Industries, up 4.26p to 188.5p, Flutter Entertainment, up 300p to 14580p, Reckitt, up 99p to 5,689p, and Polymetal, up 25p to 1,459p.

The biggest fallers on the FTSE 100 were Ocado, down 85p to 2,005p, United Utilities, down 4.04p to 155.8p, Rolls-Royce, down 2.54p to 111.7p, Bunzl, down 58p to 2,594p, and Intercontinental Hotels Group, down 89p to 4,589p.