Bumper US jobs figures push FTSE to 3-month high

UNBELIEVABLE job figures from the US on Friday afternoon, showing 2.5 million positions were added last month, helped the FTSE 100 hit a threemonth high.

Investors soaked up the confidence boost, sending the leading index up 142.86 points, or 2.25% to 6,484.30. The boost was also felt on the currency markets with the pound rising 0.92% against the dollar to 1.271 and against the euro it was up 1.19% at 1.124 euros. US job losses of 8 million were predicted by economists, but unemployment fell from 14.7% to 13.3%, although annual earnings fell 8%, compared with 6.7% in April.

David Madden, financial analyst at CMC Markets UK, explained: “The slide in the jobless rate adds weight to the view the US labour market is turning around. The fall in the earnings figure could suggest that previously furloughed staff are now going back to work, as lower income jobs such as retail assistants are included in the report. The upward move in stocks is fuelled by hopes that economic activity will rise as lockdown restrictions continue to be loosened.”

In Europe, the French Cac 40 was up 3.65% the German Dax 30 was up 3.39%. Connor Campbell, market analyst at SpreadEx added: “It is far too early to tell if this kind of jobs-rebound can be sustained over the coming months, or whether it is a onetime bounce. However, for the already optimistic markets, this was exactly what they were looking for.”

In company news, British Airways owner, IAG, said it was looking at suing the Government over its plans for a two-week quarantine in the UK. The decision comes less than 24 hours after the flag-carrying airline was confirmed as taking a £300 million loan from the Bank of England. But shareholders were happy to follow the rest of the market, with shares closing up 39.3p at 327.5p.

Housebuilder Taylor Wimpey said orders have strengthened in recent weeks after restarting construction work on the majority of its sites in England and Wales. The company said it has also seen a “very high level of demand” for appointments after reopening the majority of its show homes and sale centres in England. Shares closed up 2.65p at 161.4p. Bar chain Revolution announced it would launch a £15 million fundraiser from shareholders as it works towards reopening its sites in August. The firm said the move will cut further into its debts and help it to emerge from the pandemic in “a position of strength” after shutting all 74 of its bars. Shareholders took flight, sending shares down 5.5p to 29p each.

The pain was also felt by shareholders in office-space business Workspace, with shares closing down 19.5p at 770p. Bosses said they expect the market to remain subdued after workers were told to stay at home in the face of coronavirus. It also reported a 47% profit slump for the year to March 31.

The biggest risers on the FTSE 100 were Carnival up 237p at 1,431.5p; Melrose up 19.55p at 148.95p; IAG up 39.3p at 327.5p; Intermediate Capital up 137p at 1,418p and Rolls Royce up 31.9p at 355.9p.

The biggest fallers were Polymetal down 82p at 1,415p; Fresnillo down 39.4p at 717.4p; National Grid down 25.2p at 918.6p; Auto Trader down 15p at 551p and Pennon down 30p at 1,104p.