Better-than-expected US jobs figures boost markets

A better-than-expected US employment report distracted traders from eurozone woes and boosted markets on both side of the Atlantic.

Wall Street’s Dow Jones Industrial Average was more than 1% higher after payroll firm ADP said companies added 110,000 new staff in October, ahead of City expectations of 100,000.

In London, the FTSE 100 Index was ahead 28 points at 5451.1 after spending much of the session in the red amid fears the eurozone rescue scheme could be jeopardised.

World markets yesterday suffered heavy losses after Greek Prime Minister George Papandreou announced shock plans to hold a referendum on a much-heralded eurozone rescue plan.

Analysts warned concerns over the eurozone were likely to continue weighing on the markets as Mr Papandreou prepared to hold emergency talks with French President Nicolas Sarkozy and German Chancellor Angela Merkel over his controversial move.

Elsewhere in the US, MasterCard saw its shares jump 9% after a 38% rise in quarterly earnings, beating analyst expectations.

The UK’s economic prospects also received a boost when the closely watched Markit/CIPS purchasing managers’ index revealed the construction sector surged to a five-month high in October.

The banking sector bounced back from yesterday’s heavy losses with Barclays ahead 3.2p at 180p and Royal Bank of Scotland up 0.5p at 22.8p.

However, taxpayer-backed Lloyds Banking Group sank to the bottom of London’s leading shares index after its chief executive shocked markets by announcing a temporary leave of absence due to illness.

Antonio Horta-Osorio, who is understood to be suffering from fatigue due to overwork, is expected to return before the end of the year. Lloyds shares were 7% or 2.3p lower at 28.3p.

Elsewhere, high street giant Next rose to near the top of the FTSE 100 after it said full-year profits would hit expectations.

Next’s shares were nearly 6% or 144p higher at 2701p after the retailer, which has 520 stores, said a strong online performance boosted overall sales by 3.3% in the three months to October.

A 6.7% decline in like-for-like sales through its stores was more than offset by a 16.9% rise in its Next Directory internet and telephone sales. The company said profits are forecast to be between £550m and £585m, compared with £551m last year.

Meanwhile, Cambridge-based chipmaker ARM Holdings climbed near the top of the risers’ board after computer hardware firm Hewlett-Packard said it would use the company’s designs in its servers. Shares were up 11p at 583p.