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FTSE bounces on US jobs data, Greece bailout cash

Britain’s FTSE 100 makes gains on the back of stronger US jobs data and after the EU approves a key bailout payment to Greece.

FTSE bounces on US jobs data, Greece bailout cash

Britain’s FTSE staged a slight bounce on Thursday, snapping a three-day losing streak, on the back of better-than-expected US jobs data and after EU officials approved a key bailout payment to Greece.

The UK index of blue-chip shares edged up 0.25%, or 14 points, to 5,544 – up from a day low of 5,491 – and the All Share index improved 0.41%, or 12 points, to 2,882. See the FTSE’s performance and the index’s top winners and losers.

‘Reassuring’ jobs figures

Official data showed earlier that initial claims for US unemployment benefits dropped from an upwardly revised 368,000 to 367,000 last week, the lowest level in a month. The average forecast in a Reuters poll called for an increase to 369,000.

Michael Gapen, economist at Barclays, branded the data ‘reassuring’. He added: ‘The fact that initial claims held their decline last week is supportive of the idea that the recent softness in initial claims has reversed.’

Wall Street welcomed the data, as investors shrugged off weak US trade figures. The Dow Jones Industrial Average added 0.43% to 12,891 and the Standard & Poor's 500 index hardened 0.21% to 1,358; but the Nasdaq Composite index was 0.01% lower at 2,933.

Spanish bank bailout

Meanwhile, the eurozone’s bailout fund agreed a payment of €5.2 billion (£4.17 billion) to Greece. The move ended uncertainty as to whether the fund would keep Greece afloat in the wake of the country’s general election, in which anti-bailout parties made substantial gains.

Greece’s stock market rebounded 4.2% to 641, as the yield, or implied interest rate, on benchmark Greek 10-year government bonds retreated 91 basis points to 24.07%. The government bond yields of other eurozone nations around which market fears have swirled of late – including France, Spain and Italy – also pulled back.

And other stock markets on the continent advanced, led by financial stocks: Germany’s DAX index rose 0.66% to 6,518, France's CAC 40 index climbed 0.37% to 3,130, and the FTSEurofirst 300 index of top European shares gained 0.44% to 1,019.

The gains also came after Spain took a 45% stake in Bankia, its third-largest bank by assets, amid mounting fears over the financial health of the country’s banking system.

Sterling gains

Financials were also among the top gainers on the FTSE 100: Lloyds (LLOY.L) took on 1.3p to 31.2p and Old Mutual (OML.L) gained 6p to 150p.

But Polymetal (POLYP.L) was the biggest riser, adding 49p to 817p, following strong earnings from the Russian miner. 

Elsewhere, sterling strengthened 0.19% versus the dollar to $1.616 and gilt yields rose after the Bank of England held off from announcing another round of monetary stimulus to prop up Britain’s faltering economy.

4 comments so far. Why not have your say?

joe stalin

May 10, 2012 at 17:41

US hedge funds are in charge they will keep shaking the tree for as long as instituions keep sitting on the sidelines. there is as little fundemental reason for the recovery as there was for the sell-off. Nothing has changed and nothing will short term. Look at company fundementals and go for yield. top up every time the boys thrash the market

report this

Mr Tom

May 10, 2012 at 18:37

Wow, a bounce of just over 13 points, all is saved................ Not!

Bargain hunters are scratching around, this is inevitably and Europe will implode to a two speed economy.

report this


May 10, 2012 at 22:45

Patience, boys, patience, there will be a convoy of opportunities coming the line, like London buses of old!

report this

Cape Town

May 11, 2012 at 06:38

so we are risk-on or risk-off today?

report this

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