(Alliance News) - Stocks in London ended higher on Friday despite disappointing US nonfarm payrolls figures, which prompted fears of an economic slowdown, as US President Donald Trump stepped up his attacks on the Federal Reserve.
The FTSE 100 index closed up 11.17 points, or 0.2% at 7,282.34, ending the week up 1.0%.
The FTSE 250 ended up 55.96 points, or 0.3% at 19,705.52, ending the week up 1.6% and the AIM All-Share closed up 1.74 points, or 0.2% at 881.99, ending the week up 1.2%.
The Cboe UK 100 ended up 0.2% at 12,341.97, the Cboe UK 250 closed up 0.3% at 17,562.96, and the Cboe Small Companies ended up 0.1% at 10,845.25.
"European equity markets are higher on the day, but they gave up some of their gains on the back of the mixed US jobs report. Even though it was largely positive, the mood was deflated, but stocks are still higher on the week," said CMC Markets analyst David Madden.
Stocks in New York were slightly higher at the London equities close after US employment data showed job growth slowing in August.
The DJIA was up 0.2%, the S&P 500 index up 0.1% and the Nasdaq Composite flat.
Data from the Labor Department showed the US economy added 130,000 new positions in August, comfortably missing the consensus estimate supplied by FXStreet of 158,000.
"Market reaction to the print was relatively muted, largely because not a lot has changed overall with regards expectations for the [Federal Reserve] - today's numbers fit into the current market narrative. The softer payrolls number was offset by stronger wage growth that indicates inflationary pressures may start to creep up on the Fed. This is perhaps the largest area for concern for equity markets within this report, albeit still nothing to induce panic," said Markets.com analyst Neil Wilson.
In addition, the jobless rate held steady at 3.7% for the third month in a row and wages rose, according to Labor Department estimates.
In the wake of the disappointing numbers, US President Donald Trump renewed his attacks on the US Federal Reserve, which he blames for failing to stimulate the economy fast enough.
The US futures market strongly expect the Federal Reserve to cut interest rates later this month. Fed Chair Jerome Powell is set to appear later on Friday at a public event in Switzerland.
Nancy Curtin, chief investment officer at Close Brothers Asset Management, said: "The Fed has made it clear that they are keen to sustain the expansion; hence any further weakness in economic activity or decline in long rates could provide a clear signal for further easing. The economic mood continues to worry investors with the threat that the global manufacturing slowdown spreads to the service economy, the yield curve inversion, and ongoing trade tensions setting an ominous tone.
"Any fall-back in nonfarm payroll growth will also further infuriate the White House, with Trump determined to avoid a re-election campaign mid-recession. The fundamentals of the US economy remain robust on the consumer side, but Powell will likely respond to any threat to the expansion from these more global influences."
In Paris the CAC 40 ended up 0.2%, while the DAX 30 in Frankfurt ended up 0.5%.
On the London Stock Exchange, Berkeley Group ended among the blue chip risers, up 2.8% after the luxury housebuilder said market conditions in London and the south east of England were consistent with its June update and prices were stable.
Berkeley did not provide specific short-term targets but said it plans to generate a GBP3.3 billion pretax profit for the six years to April 2025, with profit in any single year being between GBP500 million and GBP700 million, subject to "the timing of delivery". Berkeley expects its net cash at its half-year mark on October 31 will be similar to where it was at the end of April, when it stood at GBP975 million.
The housebuilder also said its forward sales position is still more than GBP1.8 billion.
At the other end of the large cap index, United Utilities ended the worst performer, down 2.9% after RBC Capital downgraded the water company to Sector Perform from Outperform deeming the company a "relative loser" to its listed peers.
"Utilities stocks were out of fashion on Friday as negative broker comment cast a shadow over the sector. Both United Utilities and Centrica suffered from broker downgrades and sector peer SSE fell in sympathy," said AJ Bell.
Fellow utilities Centrica and Severn Trent both closed down 1.8% and SSE closed down 1.6%.
In the FTSE 250, G4S closed up 6.5% after New York-listed Brink's Co has approached the outsourcer about acquiring its Cash Solutions arm, Sky News reported on Friday.
At the other end of the midcaps, SIG closed down 6.0% after the building products supplier reported a sharp drop in first half profit and said there has been a marked deterioration in construction activity in the UK.
The pound was quoted at USD1.2312 at the London equities close, marginally lower than USD1.2323 at the close Thursday.
On the political front, the UK House of Lords on Friday gave final approval to a law aimed at preventing a no-deal Brexit, in a major defeat for Prime Minister Boris Johnson's government.
The law, which would require Johnson to seek a three-month delay to Brexit if he does not manage to strike a deal with the EU by October 19, will now go for formal approval by Queen Elizabeth II.
The move comes as Johnson's demand for a general election on his own terms became increasingly far-fetched when opposition leaders agreed to not vote with the PM during his fresh bid.
Labour leader Jeremy Corbyn spoke with the leaders of the main opposition parties on Friday to discuss their resistance to holding a vote before the prospect of a no-deal Brexit on October 31 is eliminated.
Labour, the Liberal Democrats, the SNP and Plaid Cymru are all understood to be planning on voting against or abstaining from the Fixed-Term Parliament Act when it returns to the Commons on Monday.
"Johnson's attempt on Wednesday night to hold an election on October 15 was rejected by Parliament and his second go on Monday will fail too. Indeed, on Friday the opposition parties announced they want Parliament to be sitting on October 19 as that is when the new law will require the PM to ask the EU to delay Brexit. That suggests they won't agree to an election until after October 19. And as there must be at least 25 working days between an election being announced and it taking place, an election after 31st October now seems most likely," Capital Economics said.
"But the chances of a no deal at some point, either on October 31 or January 31, are still quite high. As it stands at the moment, the Tories are currently well ahead in the polls. So if Johnson won an election either before or after October 31, a no deal Brexit would be more likely than a deal," Capital Economics added.
The euro stood at USD1.1040 at the European equities close, flat against USD1.1046 late Thursday.
The economy expanded by 0.2% in both the euro area and the EU28 during the second quarter of 2019. The reading was in line with the consensus estimate provided by FXStreet. In the first quarter of 2019, the eurozone economy had grown by 0.4%, while the wider EU28 economy expanded by 0.5%.
"The eurozone economy is slowing down and with Brexit and the trade war tensions weighing on confidence, a further deceleration looks likely. If a hard Brexit were to materialise and Europe was targeted in the evolving trade war, it would be hard to avoid a technical recession," analysts at ING said.
Brent oil was quoted at USD60.24 a barrel at the London equities close, down from USD62.02 at the close Thursday.
"Oil is in the red as the market gave back some of the yesterday's gains. The feelgood factor in relation to US-China trade talks, and the Energy Information Administration report which showed a larger-than-expected draw in US inventories has faded," Madden said.
Gold was quoted at USD1,519.10 an ounce at the London equities close, marginally higher than USD1,515.10 late Thursday.
The economic events calendar on Monday has Germany trade data at 0700 BST and UK industrial and manufacturing production figures at 0930 BST.
The UK corporate calendar on Monday has a trading statement from Primark clothing chain owner Associated British Foods, annual results from life science research tools firm Abcam and interim results from LED lighting products maker Luceco.
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