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(Alliance News) - London stocks ended the week on a subdued note as traders took in the keenly-awaited US jobs report on Friday, digesting a higher-than-forecast nonfarm payrolls figure but an unexpectedly worse jobless rate reading.
"It's important not to put too much weight on a single employment report and we are still sceptical that this marks the start of a sustained upturn in the pace of recovery," commented Andrew Hunter, senior US economist at Capital Economics.
The FTSE 100 closed down 1.89 points at 7,123.27 on Friday, meaning the large-cap index lost 0.2% over the course of the week. The FTSE 100 hit a high of 7,162.16 in the morning but gave back gains as Friday's session progressed, slipping into the red in the afternoon.
However, the mid-cap FTSE 250 ended up 124.45 points, or 0.6%, at 22,746.99, and rising 0.4% since the start of the week.
The AIM All-Share closed up 6.22 points, or 0.5%, at 1,265.93 on Friday, and ended up 1.3% for the week.
The Cboe UK 100 ended down 0.1% at 708.53, the Cboe UK 250 closed up 0.6% at 20452.51, and the Cboe Small Companies ended up 0.5% at 15486.24.
In European equities on Friday, the CAC 40 in Paris ended flat, while the DAX 30 in Frankfurt ended rose 0.3%.
"Stock markets have tempered some of their initial post-NFP excitement," said Chris Beauchamp, chief market analyst at IG.
While June's nonfarm payrolls figure topped expectations, the unemployment rate unexpectedly nudged up.
The US economy added 850,000 jobs in June, up sharply from 583,000 additions in May. The figure beat the consensus estimate, cited by FXStreet, of 700,000. The Labor Department said notable job gains in June occurred in leisure and hospitality, public and private education, professional and business services, retail trade, and other services.
However, unemployment rate was 5.9% in June, edging up from 5.8% in May. The latest reading missed the market forecast of 5.7%.
Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to USD30.40 in June, following an average increase of 13 cents in May.
He noted: "Today's NFP number is certainly moving in the right direction, gaining by yet another solid amount, but with earnings still only rising by a small amount and the headline unemployment rate actually ticking up there was no rush away from stocks."
There were modest gains in New York, with the Dow Jones rising 0.1%, the S&P 500 index up 0.3%, and the Nasdaq Composite up 0.3%.
The dollar was trading mixed in the jobs report's wake, off its morning highs.
The pound was quoted at USD1.3791 at the London equities close Friday, compared to USD1.3775 at the close on Thursday. The euro stood at USD1.1845 at the European equities close, against USD1.1851 at the same time on Thursday.
Against the yen, the dollar was trading at JPY111.31 compared to JPY111.59 late Thursday.
CMC Markets's Michael Hewson commented: "This is a goldilocks [US jobs report]...and means the Fed are set to remain on autopilot until Q4 whatever inflation does."
Banks ended as the worst blue-chip performers in London, on the prospect of looser monetary policy for longer. Standard Chartered closed down 2.4%, NatWest fell 2.2% and Barclays fell 1.7%. Lloyds also slipped 1.7% and HSBC ended down 1.6%.
Finishing at the top of the FTSE 100 was Informa, rising 3.2% after an upgrade to Buy from Hold at Berenberg.
In the FTSE 250, AO World was extending losses, closing down 6.6% after a 4.0% fall on Thursday in the wake of its full-year results.
The online electrical retailer saw pretax profit shoot up to GBP20.2 million in the financial year that ended March 31 from only GBP600,000 the previous year, on revenue of GBP1.66 billion, up 62% from GBP1.02 billion.
Broker Shore Capital on Thursday commented: "Investors might be concerned about the company's international strategy (five new countries over the next few years) considering the retrenchment that the underperformance in the Netherlands caused."
Another stock extending Thursday's poor performance was Micro Focus International, falling 5.4% on Friday after a 15% slump. The software and information technology firm on Thursday saw its pretax loss narrow to USD280.0 million, from USD1.04 billion the year prior, though first half revenue dropped 4.6% to USD1.43 billion from USD1.49 billion.
Elsewhere in London, Team17 shares rose 4.1% after agreeing to buy kids app-maker StoryToys, for an initial USD26.5 million in cash, via the acquisition of its parent-company TouchPress.
The Wakefield, England-based video game developer and publisher said it will pay up to a further USD22.5 million in cash based on targets to be delivered by StoryToys within three years of the purchase. The acquisition will be funded from Team17's existing cash resources, it said.
In commodities, Brent oil was quoted at USD75.97 a barrel at the London equities close Friday from USD75.52 late Thursday.
The members of the OPEC+ alliance of oil producing countries reconvened on Friday a day after failing to reach agreement on production quotas from August onwards.
Thursday was a busy day of video-conferencing for the alliance's ministers, starting with a meeting between the 13 members of OPEC proper led by Saudi Arabia, followed by a technical meeting and full discussion between the 23 members of OPEC+. The wider grouping includes Russia, the world's second-largest oil producer.
The hitch in Thursday's discussions came "due to the UAE raising a last minute objection to the Russian-Saudi Arabia deal reached earlier in the day", according to analysts from Deutsche Bank.
Gold was quoted at USD1,783.83 an ounce at the London equities close Friday, up against USD1,769.16 at the close on Thursday as the US dollar eased off intraday highs in the wake of the nonfarms report.
The economic calendar on Monday has services PMI from Ireland, Japan, China, Germany, the eurozone and the UK at 0101 BST, 0130 BST, 0245 BST, 0855 BST, 0900 BST and 0930 BST respectively. Outside this is eurozone investor confidence at 0930 BST.
Markets in the US will be shut on Monday for Independence Day, reopening on Tuesday.
The UK corporate calendar has full-year results from music intellectual property rights investor Hipgnosis Songs Fund and IT service management company Panoply Holdings on Monday, with filtration and environmental technology firm Porvair releasing half-year results.
By Lucy Heming; lucyheming@alliancenews.com
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