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FTSE rallies as US job gains lift recession fears

A surge in new US job numbers buoys hopes for the world's largest economy and boosts UK stock market.

 
FTSE rallies as US job gains lift recession fears

(Update) News of a surge in US job creation last month gave the UK stockmarket a boost at the end of a busy week.

The FTSE 100 extended gains to close 68 points or 1.1% higher today at 6,199 after US non-farm payrolls data showed 242,000 jobs were added last month. This was ahead of economists’ forecasts of 190,000.

On Wall Street the S&P 500 advanced 0.5% to 2,003 as investors welcomed the fact that US unemployment had held steady at an eight year low of 4.9%.

In further good news payrolls for December and January were revised upwards by 30,000. However, there were signs of weakness in the figures with average earnings dropping slightly in February. 

Nevertheless, the figures add to optimism that the world’s largest economy may be regaining momentum after the Federal Reserve’s raised interest rates for the first time in nine years in December. It could follow up with a second hike this month but economists think June is more likely as the central bank seeks to normalise monetary policy after the long years after the 2008 financial crisis.

In London mining shares consolidated their hold on the leader board with Glencore up nearly 12% to 160p followed by Anglo American, BHP Billiton and Antofagasta on gains of between 7% and 11%.

Schroders (SDR) was the biggest FTSE 100 faller, down 4% to £26.24 as investors expressed their displeasure at the fund manager’s decision to move its former chief executive Michael Dobson into the role of chairman in breach of good corporate practice.

Chesnara crumbles after FCA review

12.39: Chesnara (CSN) is getting hit for six by investors following yesterday’s update on the City watchdog’s review of how legacy life insurance policyholders are treated.

Shares in the company, which specialises in running old books of life insurance business, tumbled 8% to 290p today following a 5% fall yesterday.

The company owns Countrywide, one of six companies referred to the Financial Conduct Authority’s enforcement division over concerns that they may not have been sufficiently transparent about the charges policyholders pay.

In a statement yesterday the company said it would co-operate with the FCA’s investigation, adding: ‘We also note that no conclusion has yet been reached as to whether there have been any breaches of regulatory requirements.’

The uncertainty hasn’t helped the shares, which are down over 13% since the start of the year, cutting the company’s market value to £400 million.

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