FTSE dips after US jobs growth surges

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The FTSE 100 saw modest gains turn into a loss in today’s session after better-than-expected jobs numbers from the US added to concerns the Federal Reserve may curb quantitative easing later this year.

Friday’s ended with the FTSE down 0.72 per cent to hit 6,375.52, with Glencore Xstrata, Antofagasta, Fresnillo, Randgold Resources and Vedanta Resources being the biggest fallers of the day. The index is still up 2.58 per cent over the course of the week.

The index was trading slightly ahead in the opening half of the day and jumped after the official figures showed the US employers created 195,000 jobs in June, exceeding the 165,000 expected by economists, but investors then began to take profit.

BlackRock global chief investment strategist, Russ Koesterich says: “While not a ‘blow-out’ number, this was a very solid report which is likely to confirm investor expectations that the Fed will begin tapering this fall.”

In Europe, stockmarkets also fell on the news with the Euro Stoxx 50 losing 1.75 per cent to close at 2,600.14. The German Dax shed 2.36 per cent while the French Cac 40 dropped 1.46 per cent.

Across the pond, however, the Dow Jones, S&P 500 and Nasdaq were all showing gains as the FTSE 100 closed as investors contemplated a better outlook for the US economy.

JP Morgan Asset Management chief global market strategist David Kelly says: “For the equity market, this should translate into moderate earnings growth supporting higher stock prices.”