MARKET COMMENT: London Edges Up Ahead Of Easter Break, US Jobs Data

LONDON (Alliance News) - London equity markets closed higher Thursday ahead of the long Easter weekend, trading in a tight range for most of the session before moving higher after US stock indices rose at the open on Wall Street.

The FTSE 100 closed up 0.4% at 6,833.46, the FTSE 250 ended up 0.9% at 17,268.83, while the AIM All-Share closed flat at 715.25.

European stocks ended mixed, with the CAC 40 in Paris closing up 0.1% and the DAX 30 in Frankfurt down 0.4%. When the European markets closed, the DJIA was up 0.3%, the S&P 500 was up 0.4% and the Nasdaq Composite up 0.2%.

US stock indices were supported by positive economic data, including a report from the Labor Department showing that initial jobless claims unexpectedly fell to a two-month low in the week ended March 28. The report said initial jobless claims dropped to 268,000, a decrease of 20,000 from the previous week's revised level of 288,000. The drop surprised economists, who had expected jobless claims to edge up to 285,000 from the 282,000 originally reported for the previous week. With the unexpected decrease, jobless claims fell to their lowest level since hitting 267,000 in the week ended January 24.

Meanwhile, the Commerce Department released a report showing that the US trade deficit narrowed by much more than anticipated in the month of February. The report said the trade deficit narrowed to USD35.4 billion in February from a revised USD42.7 billion in January. Economists had expected the deficit to narrow slightly to USD41.5 billion.

In London, UK stock indices overcame commodity price weakness which hit resources stocks. Iron ore prices fell below USD50 a tonne overnight for the first time in a decade.

Miners BHP Billiton, down 2.6%, Anglo American, down 1.9%, Antofagasta, down 2.1%, and Glencore, down 1.2% were amongst the worst performers in the FTSE 100. In the FTSE 250, Vedanta Resources, down 2.5%, and Evraz, down 3.1% were two of the biggest decliners. The FTSE 350 Industrial Metals sector index was the worst-performing sector index, down 3.1%, followed by the mining sector index, down 1.4%.

Oil prices also remained volatile amid the continuing talks about a nuclear deal with Iran. Iran and the West failed to reach an agreement by Tuesday's deadline, but both sides continue to negotiate. This suggests that Tehran is serious about working out a deal that might lift sanctions on Iranian oil, adding more oil into an already oversupplied global market.

At the close of London equity markets, Brent oil was trading at USD54.71 a barrel and West Texas Intermediate was at USD48.91 a barrel.

Marks and Spencer Group ended as the second-best performer in the FTSE 100, up 4.4%. The retailer reported UK sales growth that beat analysts' expectations, driven by strong online growth and the first rise in general merchandise sales for three years, although its international sales fell due to the crisis in Russia and Ukraine and issues in its Turkish franchise business.

BTG, up 4.8%, was amongst the best performers in the FTSE 250. The healthcare company said it expects its revenue in the financial year that ended on Tuesday to be above the guidance range it had previously provided, and revenue to grow strongly in the year that has just begun.

It said it now expects revenue for the year to March 31 to be above the previous guidance it gave of GBP345 million to GBP360 million, including revenue from the PneumRx acquisition that was completed in early January. It then expects revenue to grow strongly in the current financial year to between GBP410 million and GBP440 million on a constant currency basis.

Booker Group was another strong performer, up 4.6%. The food wholesaler said Chairman Richard Rose is to step down from his role, as its sales ticked higher in both the fourth quarter and the whole of its last financial year. It said its total group sales, including the Makro business, increased 1% in the 12 weeks to March 27, the company's fiscal fourth quarter. Booker said group tobacco sales rose 1.2% and non-tobacco sales were up 0.9%.

Arcontech Group was the one of the best-performing stocks in the AIM All-Share index, closing up 55%, after the market data software systems company said it has signed a contract for its Excelerator product. The company said the deal will cover a minimum of 200 licences for the Microsoft Excel-based add-in product.

In the economic calendar, markets will be keeping a close eye on Friday's US nonfarm payroll, unemployment and wage data at 1330 BST. Bank of England Governor Mark Carney will be speaking on Monday at 0945 BST. On Tuesday, there are Markit Services and Composite Purchasing Managers' Index readings from Germany at 0830 BST, France at 0850 BST, and the eurozone at 0900 BST. UK Markit services PMI is at 0930 BST.

The only scheduled corporate release on Tuesday is a trading statement from Flybe Group.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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