FTSE 100: London markets pare losses and US stocks surge after jobless figures

London’s FTSE indexes pared losses on Thursday while US stocks surged after stronger than expected jobs figures as a volatile week for markets continued.

The blue-chip FTSE 100 ended 0.27 per cent lower at 8,144.97 having been as much as 1.2 per cent lower earlier in the day.

The mid-cap FTSE 250, which is more closely aligned with the health of the UK economy, ended 0.33 per cent lower to 20,508.58, but it was trading 1.5 per cent lower earlier in the day.

The boost came after US jobless claims came in slightly below expectations. Weekly jobless claims fell to 233,000, down from 250,000 last week and slightly below the 240,000 expected by economists.

Ian Shepherdson, chair and chief economist at Pantheon Macroeconomics said the figures were “more consistent with a mild slowdown than a brewing recession for now,”

“It’s only one datapoint, though this afternoon’s US jobless claims figures appear to have steadied some market nerves,” Michael Brown, senior research strategist at Pepperstone said.

Following the data, US markets rose strongly at the open. The S&P 500 gained 1.8 per cent shortly after the open while the tech-heavy Nasdaq climbed 2.2 per cent.

Thursday’s market moves continue a yo-yo spell for global equities. Monday saw UK, European, and Asian stocks tank over worries that the US could be headed for a recession following much weaker-than-expected job figures at the end of last week.

While markets have since simmered down, fears of a downturn in the world’s largest economy have continued to weigh on investor sentiment, contributing to a volatile week.

“A choppy week of trading continues in markets,” Daniela Sabin Hathorn, senior market analyst at Capital.com.

“Tuesday and Wednesday saw attempted rebounds across global stock markets but the lack of momentum suggests that traders aren’t ready to become buyers again just yet,” Hathorn said.

Having opened higher yesterday, the S&P 500 and the Nasdaq both lost momentum yesterday while Japanese equities failed to build on their gains. The Nikkei fell 0.74 per cent and the Topix 1.11 per cent overnight.

JP Morgan has raised the likelihood of a recession this year to 35 per cent from 25 per cent, with 45 per cent odds that it will come by the second half of next year.

The bank further warned on Thursday that around a quarter of the global carry trades, that partly caused the recent market mayhem, have not unwound.

Lloyd’s of London insurer Beazley was the FTSE 100’s biggest gainer this morning, up 12 per cent after it revealed that profit more than doubled to a new record in the first half of 2024 and improved its outlook for a key measure of profitability for the full year.

It was followed by Ladbrokes owner Entain, which rose seven per cent after reporting a narrower loss for the first half of 2024 and upgrading its guidance for growth in online net gaming revenue and group earnings before tax (EBITDA).