FTSE 100 breaks out of a losing streak on hopes of strong American jobs data
BRITAIN’S top shares snapped out of a three-session losing streak yesterday as hopes of strong jobs data from the US spurred sentiment, sending investors bargain hunting in commodity-linked stocks and banks.
The FTSE 100 ended up 59.86 points, or 1.2 per cent, at 5,211.18, closing at a two-week high but falling back from an intra-day high of 5,262.50.
US President Barack Obama said on Wednesday he believed that the May employment report, due on Friday, would show strong growth in US payrolls.
Weekly US jobs data out yesterday appeared to back up Obama’s upbeat comment.
The number of US workers filing new claims for jobless benefits fell last week, while private employers added jobs in May, further evidence the labour market was improving.
However, a slowdown in new orders received by US factories from March’s surprisingly robust gain convinced investors to lock in some early profits.
“It’s a very volatile situation we are in at the moment and when you have a market which is not unfairly valued and selling off, it tends to attract investors back in,” Peter Dixon, economist at Commerzbank said.
The upbeat sentiment drew punters in off the sidelines, attracting them to stocks which have been hit over the past few days.
Energy stocks were top performers. BP rose 0.5 per cent but fell away from session highs as the oil major’s Gulf of Mexico oil disaster weighed on the stock’s sentiment.
Crude added 0.7 per cent, while BG Group and Royal Dutch Shell gained 1.6 and 1.5 per cent respectively. Oil services firm Petrofac was the top riser, up 5.2 per cent.