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(Alliance News) - Stocks in London ended mixed on Friday, with the FTSE 100 supported by oil majors, as investors digested a disappointing US jobs report.
The US Bureau of Labor Statistics said total nonfarm payroll employment rose by 194,000 in September, less than half the 500,000 new jobs expected by consensus cited by FXStreet. It also marked a slowdown from August's upwardly-revised reading of 366,000, initially reported as 235,000.
Fewer jobs were gained than expected but the unemployment rate dropped by more than analysts predicted. Hiring was especially weak in food and drinking establishments, while government jobs declined during the month.
This is the second month in a row that nonfarm payrolls have undershot consensus, creating uncertainty ahead of next month's Federal Reserve meeting, at which economists were expecting the US central bank to begin scaling back its massive monetary stimulus programme.
IG Group's Chris Beauchamp said: "Some of the rampant bullishness of earlier in the week has been checked after yet another stumble for US job creation in today's non-farm payrolls. Once more the big number has come in well below forecasts, proving that attempting to predict the flight path of an economy recovering from a pandemic is quite the tricky thing.
"Unfortunately for markets, a miss like today's was the outcome least desired, since the Fed is on course to taper anyway, and it doesn't look like today's figure comes anywhere close to the kind of scary figure that might provoke Powell into swerving course at the last minute. Which means we have further evidence of a slowing recovery and the scaling back of asset purchases to cope with. Overall however, given the above, markets seem to have taken it reasonably well, holding their ground and avoiding a major drop so far this afternoon."
Stocks in New York were mostly higher at the London equities close. The DJIA was up 0.2%, the S&P 500 index up 0.1% but the Nasdaq Composite was down 0.1%.
The FTSE 100 index closed up 17.51 points, or 0.2%, at 7,095.55 on Friday - registering a slight rise of 0.1% for the week overall.
The FTSE 250 ended down 23.05 points, or 0.1%, at 22,536.17 and has tumbled 2.1% over the week-to-date.
The AIM All-Share closed up 3.05 points, or 0.3%, at 1,212.67, and has fallen 2.5% since the start of the week.
The Cboe UK 100 ended up 0.2% at 705.40, the Cboe UK 250 closed flat at 20,375.40, and the Cboe Small Companies ended up 1.1% at 15,524.70.
In Paris the CAC 40 stock index ended down 0.6%, while the DAX 40 in Frankfurt ended down 0.3%.
"The FTSE 100 is outperforming the major indices in the eurozone thanks to its relatively large exposure to oil and gas stocks, such as BP and Royal Dutch Shell. Oil's powerful run this week gave a helping hand to the energy sector, and in turn the major British index," said Equiti Capital analyst David Madden.
In the FTSE 100, oil majors ended as the best performers tracking spot oil prices higher. BP closed up 2.5%, while Royal Dutch Shell 'A' and 'B' closed up 2.2% and 2.1% respectively.
Brent oil was quoted at USD83.15 a barrel at the equities close, up sharply from USD81.76 at close Thursday. The North Sea benchmark hit an intraday high of USD83.43 in early trade - its highest level in three years.
Oil prices rallied after the US Department of Energy on Thursday said the agency had no plans to tap the Strategic Petroleum Reserves.
British Airways parent International Consolidated Airlines ended up 1.6% following a further relaxation of UK travel rules. A total of 47 countries including South Africa, Mexico and Thailand will be removed from England's red list on Monday, UK Transport Secretary Grant Shapps announced on Thursday.
Travellers arriving from those destinations will no longer need to spend 11 nights in a quarantine hotel at a cost of GBP2,285 for solo travellers. Just seven countries will remain on the red list following the changes - Colombia, Dominican Republic, Ecuador, Haiti, Panama, Peru and Venezuela.
The countries removed from the red list primarily are long-haul destinations. Shares in budget operators easyJet and Ryanair ended down 0.4% and up 0.1%, respectively. Jet engine maker Rolls-Royce gained 1.8%.
Conversely, Royal Mail closed down 0.8%. The postal operator said its General Logistics Systems arm has agreed to buy Canadian logistics company Mid-Nite Sun Transportation for GBP210.5 million.
Mid-Nite operates as Rosenau Transport, with a "strong presence" in western Canada. It generated revenue of CAD175.0 million - around GBP102.5 million - and earnings before interest, tax, depreciation and amortisation of CAD41.6 million in the 12 months to August 31.
GLS is Royal Mail's parcels unit in Europe and North America. It entered the Canadian market in 2018 with the acquisition of Dicom, and now GLS Canada operates a network of 2 hubs and 27 depots, with around 1,400 employees.
In the FTSE 250, Unite Group ended the worst performer, down 4.5%, after the student accommodation firm warned that full-year earnings per share will be at the lower end of guidance due to a reduction in occupancy and rental income.
Weir Group lost 3.1% after the engineer, late Thursday, said it fell victim to an attempted cyber attack which led to significant temporary disruption and will have a detrimental effect on earnings.
The pound was quoted at USD1.3645 at the London equities close, up from USD1.3625 at the close Thursday.
The euro stood at USD1.1578 at the European equities close, higher against USD1.1566 late Thursday. Against the yen, the dollar was trading at JPY112.03, up from JPY111.45 late Thursday.
Gold was trading at USD1,759.55 an ounce at the London equities close, little changed against USD1,759.45 late Thursday.
A light economic events calendar on Monday has Italy industrial production at 0900 BST.
The UK corporate calendar on Monday has a trading statement from XP Power.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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