London ends lower as all eyes turn to payroll data in the US
THE FTSE 100 closed lower yesterday, weighed down by energy stocks, though with a rally from miners limited losses ahead of today’s key US non-farm payroll figures. The index closed the session down 20.80 points, or 0.4 percent, at 4,796.75, having traded lower on the first two days of September.
But the recent powerful rally, which saw the large-cap index rise 6.5 per cent in August, and 39 per cent since a six-year trough in March, may not have run out of steam.
“Mining stocks are up on the leaderboard and that would indicate that there is still plenty of appetite out there to get into risky stocks, so you can’t quite say yet that the bull run’s over,” said Angus Campbell, head of sales at Capital Spreads.
Investors were looking to Friday’s latest US non-farm payroll figures for a sense of direction.
“People are waiting for something to show that there is an opportunity here to buy, or whether this is a signal to get out, and take the money and run for the time being,” he said.
Energy stocks proved the biggest drag on the FTSE 100, and were under pressure as crude steadied around the $68 level. Royal Dutch Shell, BP and BG Group dropped 0.9 to 1.2 per cent.
Investors also shunned stocks perceived as safe havens, with GlaxoSmithKline down 2.2 per cent and British American Tobacco 2.1 per cent weaker.
Mining stocks led the gainers, proving an anchor for the FTSE 100 as metals prices rose.
Gold miner Randgold Resources was the stand out gainer, up 9 per cent as precious metal prices gained amid caution ahead of the US jobs report.
Fresnillo, Lonmin, Xstrata and Vedanta Resources added 3.9 to 8.6 per cent.
Life insurers were in favour, rebounding after falls the previous session, with Prudential, Old Mutual and Standard Life putting on 0.4 to 1.9 per cent.
Banks also recovered after weakness on Wednesday. Royal Bank of Scotland, HSBC and Lloyds Banking Group rose between 0.3 to 3.2 per cent.
In economics news, activity in the services sector grew at its fastest pace in nearly two years in August with the services PMI rising to 54.1, above the 53.9 forecast.
The European Central Bank kept interest rates unchanged at a record low of 1.0 per cent, and said now was not the time to withdraw state support as economies emerge slowly from recession.