US job fears and oil prices drag FTSE down

Disappointing jobs data from across the Atlantic sent London shares into freefall today.

The FTSE 100 Index ended the day 75.5 points lower at 4337.9 as dismay at the figures from New York and record oil prices dragged most stocks into the red.

Banking stocks had brought some support earlier in the session amid speculation of a bid for Barclays from US financial giant Citigroup, but these gains were eroded as the day went on.

Lower-than-expected jobs figures from the US left the Dow Jones Industrial Average 80 points lower by the end of trading in London and this had a knock-on effect on shares at home.

Analysts said fears of an interest rate hike in the United States left little hope of a change in the mood next week.

After climbing as much as 10% earlier on, shares in Barclays closed nearly 4% higher after rumours gripped the London market that a bid may be on the cards. Shares advanced 18.75p to 500p and were at the top of the Footsie risers list for most of the day.

Barclays was followed by Lloyds TSB, which added 3.75p to 420.75p, and Alliance & Leicester, up 4p to 861p.

Strong half-year results from Bradford & Bingley, which posted a 5% rise in half-year profits to £140 million, lifted the group 2.25p to 271.5p.

But most other stocks failed to make it into positive territory, with British Airways once again one of the biggest casualties of the oil price hike as shares slipped 13.75p to 213p.

There was also an 8p fall to 224.25p for industrial giant ICI and Rolls-Royce weakened 8.75p to 236.25p.

Media stocks were also among the heaviest losers, with Reuters second in the Footsie fallers, down 18.5p to 297p, and ITV off 4.5p to 96.75p.

Outside the top flight, online travel group lastminute continued to set new lows for the year as investors sold up after yesterday’s third quarter figures raised concern about growth prospects. The stock fell 8.5p to 98.5p.

Shares in medical products group Osmetech dipped 0.07p to 4.05p after it announced a 10-year deal that will see its blood analysers used on animals for the first time.

And airline easyJet retreated 5p to 137p after saying its average fare had fallen 7% on a year earlier amid continued tough competition in the low-cost sector.

Britain’s largest provider of funeral services Dignity had better luck, advancing 1% after overcoming a fall in the UK death rate to post better-than-expected maiden half year results. Shares rose 3.5p to 278.5p.

Meanwhile, bakery group Greggs cheered 68p to 3450p after saying a drive to modernise its brand had helped it serve up record half year profits.

The biggest Footsie risers today were Barclays up 18.75p to 500p, Smith & Nephew ahead 9p to 490p, Enterprise Inns up 6.5p to 541.5p and Lloyds TSB ahead 3.75p to 420.75p.

The heaviest fallers were British Airways down 13.75p to 213p, Reuters off 18.5p to 297p, ITV down 4.5p to 96.75p and InterContinental Hotels off 25.5p to 564p.