World markets see positive upturn
World markets saw a turnaround in fortunes today after better-than-expected jobs data from the United States calmed nerves about the global economy.
Wall Street’s Dow Jones Industrial Average surged 1% after the US Labor department said the economy added more than 200,000 jobs in April for the third straight month, the biggest hiring spree in five years.
The FTSE 100 Index jumped 56.8 points by the close to 5976.8 after volatile commodity prices saw the market spend much of the session in the red.
The better-than-expected jobs data will offer some respite for investors after an unexpected jump in unemployment claims in the US, reported yesterday, triggered a plunge in oil and metal prices.
Elsewhere, a surprise fall in German factory orders and signs China and India’s economic growth engine was losing steam also troubled commodity traders.
The slide moderated today as Brent crude oil, which fell nearly 10% yesterday, settled at 113 US dollars a barrel, while gold and silver prices recovered losses.
The improved sentiment saw a bounceback for heavily weighted mining stocks with Anglo-American adding 111p at 3056p, Vedanta Resources advancing 70p to 2194p and Xstrata up 32p to 1442p.
Banking stocks were on the front foot after Royal Bank of Scotland’s first quarter results showed signs of progress.
While losses of £116m (€132m) were steeper than last year, chief executive Stephen Hester assured investors RBS was on the road to recovery as its shares lifted nearly 6% or 2.3p to 42.7p, placing it on top of the leaders’ board.
This helped the banking sector regain some of yesterday’s losses after Lloyds Banking Group slumped to a first quarter loss after putting £3.2bn (€3.6bn) aside to cover payment protection insurance compensation.
Lloyds was up 0.6p to 54p, while HSBC cheered 5.5p to 651.7p and Barclays added 1.3p to 277.6p.
International Airlines Group also impressed after the merged British Airways and Iberia company posted a sharp fall in first quarter losses. Analysts said the results were better-than-expected, despite a surge in fuel prices, and led to a 3% rise in the company’s share price, up 8.1p to 254.1p.
FTSE 250-listed airline easyJet, which will present half-year figures next week, benefited as its shares jumped 12.2p to 355.1p, or 4%.
Car insurer Admiral was another leading blue-chip riser after it said sales leapt 56% to £539 million during a “great” first quarter.
It is on track to at least meet City profits expectations as the firm behind Diamond and elephant.co.uk said the number of vehicles it insured in the UK increased 33% to 2.9 million.
Shares in Cardiff-based Admiral rose 2% – or 35p to 1697p.
The biggest FTSE 100 risers were Royal Bank of Scotland up 2.3p at 42.7p, Arm Holdings ahead 28p at 595p, ITV up 3.5p at 75.6p and Anglo American ahead 111p at 3056p.
The biggest fallers were Man Group down 5.8p at 247.4p, Scottish & Southern Energy off 23p at 1307p, Inmarsat down 10p at 593p and Amec off 19p at 1163p.
