Markets jump on back of US jobs announcement

The FTSE 100 Index leapt ahead today after US employers shed fewer jobs than feared in August.

The closely watched US non-farm payrolls were expected to show more than 100,000 jobs lost over the month, but the figure was far lower than expected at 54,000.

The better news on the world’s biggest economy helped the Footsie push 1.5% higher or 76.8 points to 5447.9. The benchmark index is on course for its sixth winning session in a row with gains of almost 7% in the process.

The figures overshadowed disappointing news on the UK economy earlier after a slowdown in growth among UK services firms and a sudden slump in construction orders. Wall Street’s Dow Jones Industrial Average was up more than 1% in early trading.

In London the only major blue-chip to offer any news was oil giant BP, which said the costs of the Gulf of Mexico oil spill had risen to £5.2 billion so far. Shares rose 7.75p to 400.3p.

IT firm Autonomy and power supplies company Aggreko – which have both been linked with vague takeover talk – were among the leading risers, advancing 57p to 1773p and 82p to 1518p respectively.

Home Retail Group, the Argos and Homebase owner in line for demotion from the FTSE 100 next week, was among the fallers as the company slid 0.2p to 221.6p.

In the FTSE 250, troubled social housing firm Connaught was off 2p to 16.9p or 12% as worries over a potential debt-for-equity swap continued to hit the stock. Connaught – whose shares have been devastated by a succession of profit warnings - is set to be relegated to the ranks of the small-caps next week.

The firm was followed lower in the second tier by oil explorer Soco International, which slid 37.6p to 439p or 8% after drilling disappointment in the Congo.

Spread betting firm IG Group was also on the back foot after brokers at UBS cut their rating to neutral, shifting shares down 16.5p to 506.5p or 2%.

But Currys and PC World owner DSG International ticked 1p ahead to 26.3p as Numis analysts raised full year profit forecasts following yesterday’s trading update, which showed a 6% rise in UK like-for-like sales.

Back in the top flight, supermarket Morrisons was down 0.2p to 290.8p after reports that the group is set to signal a move into online groceries in next week’s results. Rivals Sainsbury’s and Tesco were off 1.4p to 368.9p and 2.3p ahead at 414.4p respectively.