British blue-chips bounce on strong US jobs growth
AFTER a turbulent few days, the Footsie managed to avoid a fiveday losing streak and end the week on a positive note.
Stock markets across the world have been rattled by US-China trade tensions and the prospect of another Trumpian trade war with the EU following a dispute between Washington and Airbus.
Grim data indicating the UK and Germany – Europe’s biggest economy – could be on the brink of a recession have not helped either.
But traders breathed a sigh of relief yesterday after data showed the US enjoyed a moderate increase in jobs growth last month and speculation that Boris Johnson could seek a extension from Brussels if a Brexit deal isn’t agreed by October 19.
The US unemployment rate, meanwhile, fell to a 50-year low of 3.5pc last month, easing fears over the economy.
Not even news that Hong Kong’s economy is also heading for recession after months of pro-democracy protests, and warnings that the 25pc US tariffs on European food products could threaten jobs, could dampen the Friday feeling.
The FTSE 100 closed 1.1pc higher, up 77.74 points, at 7155.38 last night, while the FTSE 250 inched up 0.7pc, or 132.21 points, to 19480.37.
It was a dour start to the final quarter of the year though, with the Footsie down 3.4pc so far this month and 3.6pc lower for the week as a whole. Marks & Spencer shed 3.9pc, or 7.05p, to 171.85p after a stinging downgrade from ‘hold’ to ‘reduce’ and a lower price target, from 239p to 150p, from HSBC analysts.
Brokers blasted its clothing range, saying it is struggling to establish a ‘contemporary and wearable fashion’ offer, and said the weaknesses in the clothing and home range are chipping away at progress in its food division. They downgraded profit forecasts as a result.
In contrast, Exane BNP Paribas brokers only had good things to say about sportswear group JD Sports (up 2.7pc, or 19.8p, to 754.2p), giving it an ‘outperform’ rating and saying it is the only Footsie-listed retailer, aside from Ocado (up 2.8pc, or 35.5p, to 1284.5p), with material growth prospects. Footsie-listed defence firm Meggitt was trading 1.7pc, or 10.6p, higher at 621.4p after it signed a £39m deal to supply equipment to the US Army. Zoetic International surged 9.5pc, or 0.35p, at 4.03p, after it reported revenues of £1.2m in the six months to September 30, up from £520,000 a year ago, as the company continued its transition from an oil and gas company (it was formerly called Highlands Natural Resources) to a seller of cannabidiol, or CBD, products.
It is generating sales on both sides of the Atlantic and 67 stores in the US are stocking its products. Pharmacy chain Georgia Healthcare rose 2.7pc, or 5.5p, to 207.5p, after inking a deal to bring cosmetics chain The Body shops to the high streets of the Eurasian state. It has signed a 10-year franchising deal that will see it open three shops and concessions in 50 of its pharmacies.
AIM-listed Angling Direct was unmoved by the appointment of Andy Torrance, previously operations chief at retailer Holland & Barrett and Dunelm, to the company’s board as a non-executive director.
The Norfolk-based firm, which has become a retail investor favourite, has 30 stores and boasts that it sells 21,500 different fishing tackle-related products. Shares closed flat at 58.5p. Elsewhere on the junior market,
Duke Royalty rose 1.3pc, or 0.6p, to 47.6p, after it raised £16m from institutional investors and announced it is looking to raise a further £20m – which it hopes will include a lot of retail shareholders.