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LONDON (Alliance News) - Gold miners ended amongst the worst performing stocks in London Friday, after a better-than-expected US jobs report sent the dollar soaring and the gold price lower.
London's equity indices got a short-lived boost from the US jobless data, but the FTSE 100 quickly pared those gains and ended slightly lower.
The FTSE 100 closed down 0.2% at 6,853.44, ending down 1.5% for the week as a whole. The FTSE 250 finished flat at 16,685.63, while the AIM All-Share ended up 0.4% at 700.50.
When the London equity markets closed, US stock indices were still slightly higher with the DJIA up 0.2%, and the S&P 500 and Nasdaq Composite both up 0.4%, boosted by a Labor Department report that showed stronger-than-expected job growth in January.
The report said non-farm payroll employment rose by 257,000 jobs in January compared with economists' forecasts for an increase of about 230,000 jobs. Revised data also showed that employment in November and December jumped by 423,000 jobs and 329,000 jobs, respectively, reflecting a net upward revision of 147,000 jobs.
However, the Labor Department also said the unemployment rate edged up to 5.7% in January from a six-year low of 5.6% in December, reflecting a substantial increase in the size of the labor force, which surged up by 1.05 million. The rate had been expected to remain unchanged.
The dollar strengthened to USD1.5257 against the pound in the wake of the data, off a 5-week low of USD1.5351. It also rose against the euro, and was trading at USD1.1342 when the London equity markets closed.
The dollar's rise weighed on the gold price, which fell to its lowest level in three weeks at USD1,228.17 an ounce.
That hit the London-listed gold miners and Randgold Resources and Fresnillo, ending down 4.3% and 4.1%, respectively, were the worst performers in the FTSE 100. In the FTSE 250, Lonmin and Acacia Mining ended down 7.2% and 5.0%, respectively.
Poundland was the best-performing stock in the FTSE 250, closing up 15.4%, after snapping up rival 99p Stores for GBP47.5 million in cash and GBP7.5 million in shares. The deal includes 99p Stores' network of 251 stores, which trade as 99p Stores and Family Bargains, along with its warehouse and distribution centre. Over time, 99p Stores will be converted to Poundland shops.
The move will help Poundland's expansion in the South of England, although the company will have to persuade the UK's competition regulator of the merits of a deal that will bring together two of the biggest players in the discounted general merchandise space. Poundland, after initial talks with the Competition and Markets Authority, conceded it may have to offer concessions to get the deal passed owing to the size of the two companies.
Tate & Lyle was the worst-performing stock in the mid-cap index, closing down 14%, after the sugar company said it expects its full year profit to fall below its guidance on the back of continuing problems in its bulk ingredients business, and said it will take action to try and improve its operation and supply chain following prolonged issues.
In the FTSE 100, outsourcing company Capita ended amongst the best performers, up 1.3%, after it was approved to join the lead provider framework for NHS England's support services commissioning. NHS England anticipates it will have to procure some GBP3 billion to GBP5 billion in support services through the framework, according to Capita.
GlaxoSmithKline ended up 1.1% after the pharmaceutical giant said it has received positive results from a phase III study investigating the combination of cancer treatments dabrafenib and trametinib. Glaxo said the overall survival rates from the combination of the drugs showed a statistically significant fall in the risk of death from combining the pair in comparison to dabrafenib monotherapy in patients with BRAF V600E/K mutation-positive metastatic melanoma, or skin cancer that spreads to other parts of the body.
Separateley Glaxo said it has made a submission to the European Medicines Agency seeking an additional indication for eltrombopag to cover the treatment of pediatric patients with blood clotting disorder chronic immune thrombocytopenic purpura who have had an insufficient response to corticosteroids or immunoglobulins.
Europe's main stock indices ended lower, with the CAC 40 in Paris ending down 0.3% and the DAX 30 in Frankfurt down 0.5%.
German industrial production grew at a slower-than-expected rate in December. A report released by the Statistisches Bundesamt Deutschland said production grew month-on-month by 0.1%, the same as the revised figure for November. The sector was expected to show growth of 0.4%.
In the economic calendar Monday, German trade balance for December is at 0700 GMT, and US Labor market conditions index for January is at 1500 GMT.
In the corporate calendar Monday, Randgold Resources will report its full year results, while Acal will release an interim management statement.
By Daniel Ruiz; danielruiz@alliancenews.com
Copyright 2015 Alliance News Limited. All Rights Reserved.
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